Section 106(3) of the Copyright Act grants a copyright holder the exclusive right to distribute copies of a copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending. In addition to the general distribution right, Section 602(a) of the Copyright Act provides a copyright holder with the right to prohibit the importation into the United States of copies of a work that have been acquired outside the United States; such importation, if done without the authority of the copyright holder, is considered an infringement of the exclusive right to distribute copies of the work under § 106. However, the Copyright Act's "first-sale" doctrine, codified at § 109(a), provides a limitation to the copyright holder's distribution right: "Notwithstanding the provisions of section 106(3), the owner of a particular copy … lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy." For example, someone who purchases a new book in a bookstore (thus constituting the "first sale" of that particular copy) becomes the owner of that physical item. He or she may thereafter distribute the book (for example, give it away to a friend or sell it to a used book store) without obtaining prior consent of the book's copyright owner. Owners of copies of a copyrighted work that have been "lawfully made under" title 17 of the U.S. Code (where the Copyright Act is codified) are thus immunized from copyright infringement liability when they transfer ownership of those copies to other individuals. As the U.S. Supreme Court has previously explained, "The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution." Compelling public policy reasons support the Copyright Act's first sale doctrine. As the U.S. Supreme Court has noted, "The primary objective of copyright is not to reward the labor of authors, but 'to promote the Progress of Science and useful Arts.'" In accordance with this constitutional mandate, the Copyright Act balances the rights of copyright holders in their intellectual property with the public's interest in having robust ownership rights in the tangible material in which copyrighted works are fixed. By terminating the distribution right of copyright holders after the initial sale of a particular copy, owners of those copies benefit from having unrestrained alienability of personal property. So-called "gray-market" goods are products that have been manufactured and purchased abroad and thereafter imported into the United States (without the authorization of the intellectual property holder) for resale to U.S. customers (usually at discounted prices) . Also known as "parallel imports," gray-market goods are legitimate, genuine products possessing a brand name protected by a trademark and/or containing designs or other subject matter protected by copyright. These goods are usually manufactured abroad and then purchased and imported into the United States by third parties, "thereby bypassing the authorized U.S. distribution channels." U.S. retailers can sell gray-market products at cheaper prices compared to the higher domestic prices established by the manufacturer. The legal question that faced the U.S. Supreme Court in Costco Wholesale Corp. v. Omega S.A. was whether a manufacturer's right to prohibit unauthorized importation of copyrighted works is exhausted by the initial foreign sale of copies of copyrighted works that were made outside the United States. In 1998, the U.S. Supreme Court was confronted with a question reminiscent of that posed in Costco , although there is a factual difference between the cases. In Quality King Distributors, Inc. v. L' a nza Research International, Inc., a California company (L'anza) manufactured and sold shampoo and other hair care products; the products were manufactured in the United States, but were sold by L'anza both domestically and internationally. L'anza had copyrighted the labels that it affixed to its products. The prices that L'anza charged its domestic distributors were significantly higher than the prices charged to foreign distributors. L'anza's United Kingdom distributor had sold several tons of L'anza's products (affixed with the copyrighted labels) to a distributor in Malta; Quality King Distributors bought the products from the Malta distributor and imported the products for resale in the United States through retailers who were not within L'anza's authorized chain of distribution. L'anza sued Quality King for infringement of its distribution and importation rights under the Copyright Act. The district court rejected Quality King's defense based on the first sale doctrine; the Ninth Circuit Court of Appeals affirmed that judgment, noting that § 602's ban on importation would be "meaningless" if § 109 "were found to supersede the prohibition on importation in this case." The Supreme Court in Quality King reversed the Ninth Circuit and held that the first sale doctrine endorsed in § 109 applies to copies of copyrighted works that are imported into the United States. In reaching this conclusion, the Court first observed that the copyright holder's distribution right granted by § 106(3) is expressly limited by other provisions of the Copyright Act, including the first sale doctrine codified at § 109(a). Section 602(a) provides that unauthorized importation is an infringement of the copyright holder's exclusive right to distribution under § 106. Therefore, the Court reasoned that the rights granted by § 602 must also be limited by the first sale doctrine. According to the Court, because § 106(3) "does not encompass resales by lawful owners, the literal text of § 602(a) is simply inapplicable to both domestic and foreign owners of L'anza's products who decide to import them and resell them in the United States." The Court held that the owner of goods lawfully made under the Copyright Act "is entitled to the protection of the first sale doctrine in an action in a United States court even if the first sale occurred abroad." In a concurring opinion, Justice Ginsburg identified the issue left unresolved by the Quality King opinion: This case involves a "round trip" journey, travel of the copies in question from the United States to places abroad, then back again. I join the Court's opinion recognizing that we do not today resolve cases in which the allegedly infringing imports were manufactured abroad. In making this clarification, Justice Ginsburg cited without comment two treatises on copyright law: See W. Patry, Copyright Law and Practice 166-170 (1997 Supp.) (commenting that provisions of Title 17 do not apply extraterritorially unless expressly so stated, hence the words "lawfully made under this title" in the "first sale" provision, 17 U.S.C. § 109(a), must mean "lawfully made in the United States"); see generally P. Goldstein, Copyright § 16.0, pp. 16:1-16:2 (2d ed. 1998) ("Copyright protection is territorial. The rights granted by the United States Copyright Act extend no farther than the nation's borders."). The facts of Costco v. Omega are relatively straightforward. The Swiss corporation Omega manufactures wrist watches in Switzerland and sells them through authorized distributors and retailers around the world. Omega engraves on the underside of its watches a small logo—an original artwork that it refers to as the "Omega Globe Design," that Omega had registered as a copyrighted work with the U.S. Copyright Office. Costco obtained authentic Omega watches from the "gray market"—from third parties that had purchased the watches from authorized Omega distributors overseas. Costco then sold the watches to U.S. customers within its California warehouse stores. While Omega had authorized the initial foreign sale of its watches, it did not authorize their importation into the United States or Costco's domestic sale of the watches. Omega sued Costco for infringing its distribution and importation rights under §§ 106(3) and 602(a) of the Copyright Act; Costco defended itself by arguing that the first sale doctrine, § 109(a), precludes Omega's infringement claims. Without explanation, the U.S. District Court for the Central District of California granted summary judgment to Costco on the basis of the first sale doctrine. In September 2008, the U.S. Court of Appeals for the Ninth Circuit reversed the district court, holding that the first sale doctrine does not apply to imported goods that were manufactured and first sold abroad. The appellate court reached this determination by asserting that copies of copyrighted works made and first sold outside the United States are not considered "lawfully made" within the meaning of § 109(a); thus, these copies are not subject to the first sale doctrine, and Costco is precluded from raising such defense to Omega's infringement claims. In support of its position, Costco had argued that the Supreme Court's Quality King decision had "effectively overruled" three Ninth Circuit opinions in the 1990s that were issued before Quality King. Those earlier appellate court opinions had developed a "general rule that § 109(a) can provide a defense against §§ 106(3) and 602(a) claims only insofar as the claims involve domestically made copies of U.S.-copyrighted works." The Ninth Circuit in Costco determined, however, that Quality King did not directly overrule or otherwise invalidate this general rule that § 109(a) is limited to copies legally made in the United States. Instead, the Ninth Circuit distinguished Quality King by limiting that decision to its specific facts—that of a good made in the United States that had been sold abroad and then re-imported without the consent of the copyright holder. The appellate court explained that the basis for its "general rule" was its concern that applying § 109(a) to copies made abroad "would violate the presumption against the extraterritorial application of U.S. law."