Document: 523 U.S. 135118 S.Ct. 1125140 L.Ed.2d 254 QUALITY KING DISTRIBUTORS, INC., Petitioner,v.L'ANZA RESEARCH INTERNATIONAL, INC. No. 96-1470. Supreme Court of the United States Argued Dec. 8, 1997. Decided March 9, 1998 Syllabus * Respondent L'anza, a California manufacturer, sells its hair care products in this country exclusively to distributors who have agreed resell within limited geographic areas and only authorized retailers. L'anza promotes domestic sales with extensive advertising special retailer training. In foreign markets, however, it does not engage comparable or promotion; prices are substantially lower than prices. It appears that after L'anza's Kingdom distributor arranged for sale several tons products, affixed copyrighted labels, Malta, sold goods petitioner, which imported them back into without permission then resold at discounted unauthorized filed suit, alleging petitioner's actions violated exclusive rights under Copyright Act 1976(Act), 17 U.S.C. §§106, 501, 602, reproduce distribute material States. The District rejected "first sale'' defense §109(a) entered summary judgment L'anza. Concluding §602(a), gives copyright owners right prohibit importation copies, would be "meaningless'' if provided defense, Ninth Circuit affirmed. Held: first doctrine endorsed is applicable copies. Pp. ____-____. (a) Bobbs-Merrill Co. v. Straus, 210 339, 349-350, 28 722, 725-26, 52 L.Ed. 1086, held "vend'' statute force applied work. Congress subsequently codified Bobbs-Merrill's Act. Section 106(3) holder "to copies . by other transfer ownership,'' but provides: "Notwithstanding [§]106(3), owner particular copy lawfully made title, entitled, authority owner, sell otherwise dispose possession .'' Although prevents from treating resales as an infringement distribute, claims properly construed, prohibits reselling American vendors unable buy distributors. (b) statutory language clearly demonstrates granted §602(a) subject §109(a). Significantly, categorically materials, provides that, three exceptions, such " [i]mportation [§]106 '' 106 turn expressly states all therein granted-including distribution subsection (3)-are §§107 through 120. One those limitations §109(a), permits [n]otwithstanding provisions [§]106(3).'' After item "lawfully title,'' any subsequent purchaser, whether reseller, obviously "owner'' item. Read literally, unambiguously "is sell'' Moreover, since merely "under [§]106,'' encompass lawful owners, §602(a)'s literal text simply inapplicable both decide import here. (c) rejects argument particularly superfluous doctrine. short answer adequately explain why words [§]106'' appear §602(a). there flaws reasoning because §602(b) already "piratical'' must cover nonpiratical ("lawfully made'') owner. First, even piratical least provide private remedy against importer, whereas §602(b)'s enforcement vested Customs Service. Second, §109(a)'s protection available copy, action non-owner bailee. Third, applies category neither nor title'': made'' another country's law. (d) Also §501(a) defines "infringer'' one "who violates , imports violation [§]602,'' latter type distinct former, thus This argument's outweighed considerations, including fact prohibited thereby identifying §602 violations species §106 violations. More important [§§]107 120.'' If functioned independently, none sections limit coverage. (e) finds unpersuasive Solicitor General's "importation'' describes act protected authorization of'' copy. An ordinary interpretation includes ship person country. important, cramped reading odds necessarily broad reach. whole point once places stream commerce selling it, he has exhausted his control distribution. There no reason assume intended doctrine's scope. (f) wisdom protecting validly their works, Executive Branch recently five international trade agreements apparently do just irrelevant proper P. ____. 98 F. 3d 1109, reversed. STEVENS, J., delivered opinion unanimous Court. GINSBURG, concurring opinion. Allen R. Snyder, Washington, DC, petitioner. Raymond H. Goettsch, Long Beach, CA, respondent. Lawrence G. Wallace, amicus curiae leave Justice STEVENS 1 §106(3), That limited, 602(a) question presented case also narrowly, 2 Respondent, Research International, Inc. (L'anza), corporation engaged business manufacturing shampoos, conditioners, products. labels States, retailers barber shops, beauty salons, professional colleges. found "public generally unwilling pay price charged high quality when they along less expensive carried supermarkets drug stores.'' App. 54 (declaration Robert Hall). various magazines sale, providing training 3 markets. 35% 40% 1992 1993, shipments Malta;1 each shipment contained affixed.2 record establish initial purchaser was title passed were carrier arrived destination, undisputed manufactured purchaser. 4 way had purchased Quality King Distributors, (petitioner). some uncertainty about identity actual purpose our decision we petitioner bought Malta distributor, them, chain 5 determining source sales, brought suit defendants.3 complaint alleged bearing "exclusive 501 602 States.'' 32. based on recognized §109 favor Based largely conclusion kind, Appeals F.3d 1114 (C.A.9 1996). Because created conflict Third Circuit, see Sebastian Int'l, Consumer Contacts (PTY) Ltd., 847 F.2d 1093 (1988), petition certiorari. 520 ----, 117 2406, 138 173 (1997). II 6 unusual claim anyone labels. Instead, primarily interested integrity method marketing affixed. themselves creative component, relevant apply equally involving more familiar materials sound recordings books. Indeed, publisher resale books infringed 1086 (1908).4 7 case, publisher, Bobbs-Merrill, inserted notice retail $1.00 constitute copyright. defendants, owned Macy's department store, disregarded consent. We "vend''5 work: 8 "What mean granting "the sole vending same'? Was create permit fasten, book upon articles mentioned statute, restriction alienation subject-matter parted acquired full dominion over given satisfactory it? denied article, restriction, it. book, copyright, may again, although could publish new edition 9 "In stipulated facts show appellant wholesale, agreement future took obligation enforce printed undertaking restrict dollar per copy.'' Id., S.Ct., 726. 10 decided work.6 holding work.7 Under 1976 Act, §106(3) ownership.''8 limitation judicial interpretation, express provision. 109(a) 11 section 106(3), phonorecord ''9 12 emphasized critical distinction between contract rights.10 relies terms contracts outlets. basic now (the title''), not, enable treat claim, contractual inadequate protect distributors, competition. To evaluate submission, must, course, consider III 13 most portion 14 "Importation phonorecords work been outside 106, actionable ''11 15 significant provision materials. 106.'' Like construed right. introductory section-including, 120.12 limitations, noted, 106(3).''13 16 106,'' States.14 Notwithstanding clarity §§106(3), 109(a), 602(a), argues supports construction "distinct standing alone,'' Brief 15. Otherwise, argues, itself exceptions15 superfluous. supported amici curiae, General contends policy considerations. these arguments separately. IV 18 advances two primary Act: (1) doctrine; (2) §501 defining refers separately §106, hand, §602. explains 106'' makes additional textual argument: word authorizing Each merits separate comment. Coverage 19 Prior enactment "piratical,'' unauthorized, copies.16 earlier prohibition retained present act.17 therefore (as curiae) unless covers non-piratical nearly always implies sale. argument. 20 did Service.18 afforded (or someone owner), bailee, licensee, consignee, whose unlawful.19 title.'' encompasses instead, law 21 produced identified deliberations led mention example comment 1961 demonstrate hypothetical one. report Congress, Register Copyrights stated, part: 22 "When arrangements same work, publishers frequently agree divide agrees certain countries. suggested ban should extended bar contravention agreement.'' Law Revision: Report Revision Law, 87th Cong., 1st Sess., 125-126 (H.R. Judiciary Comm. Print 1961). 23 Even absence market allocation between, example, British make author gave rights-enforceable Act-to edition,20 presumably title'' meaning (or, matter, copies). 24 exceptions rests assumption coverage co-extensive But is, fact, broader doctrine-e.g., country-the traveler isolated purchase bulk purposes resale. As read embodied situations, former subsume latter; retain independent meaning. 25 501's Separate References §§106 26 lend support submission. part, 27 Anyone 118 106A(a), infringer author, use "or imports,'' rather "including consistent (and set out §109(a)) view violation. Nevertheless, inference text. 29 Most directly 501.'' Unlike phrase, identifies violations, §106A, cross-referenced §501, uses starkly different language. author's §106A "independent contrast strongly right.21 30 Of greater importance "sections 107 For "fair use'' §10722 unavailable importers unlawful newspaper review quoting excerpts novel copyright.23 Given fair scholarly well periodicals, difficult believe impose absolute works containing copying 31 context seems unlikely importer defend label. construing remember principal promote progress "useful Arts,'' U.S.Const., Art. I, §8, cl. rewarding creativity, function original commercial aid. appropriate take account impact denial publications. publications, "would inhibit access ideas countervailing benefit.'' Sony Corp. America Universal City Studios, Inc., 464 417, 450-451, 104 774, 793, 78 574 (1984).24 32 Does "sell dispose'' used §109(a)? 33 Whether viewed standpoint holder, advanced General25 disposal §109(a)-is unpersuasive. Strictly speaking, could, carry merchandise surrendering custody typical transaction, shipper transfers "possession, custody, products''26 person, assumes included transfer. statement entitled possession'' surely 34 statutes flexible treatment (even "distribution''), reach recognized, codification clear true involved cases applying either codifications scope.27 35 sum, persuaded arguments. V 36 parties debated length unwisdom governmental restraints what sometimes described "gray market'' practice "parallel importation.''28 K Mart Cartier, 486 281, 108 1811, 100 313 refer foreign-manufactured valid trademark consent holder. 285-286, 1814-1815. sure appropriately describe consequences manufacturer's promotional efforts abroad so low can compete market.29 do, think wise discrimination matter duty interpret 37 Equally Government countries.30 earliest 1991; ratified Senate. though course position taken litigation, shed light enacted 1976.31 38 39 ordered. 40 concurring. 41 involves "round trip'' journey, travel abroad, again. I join Court's recognizing today resolve allegedly infringing abroad. See W. Patry, Practice 166-170 (1997 Supp.) (commenting Title extraterritorially hence provision, States''); Goldstein, §16.0, pp. 16:1-16:2 (2d ed. 1998) ("Copyright territorial. extend farther nation's borders.''). syllabus constitutes part prepared Reporter Decisions convenience reader. Detroit Timber & Lumber Co., 200 321, 337, 282, 287, 50 499. 64 De Lanza). id., 70-83. defendants settled. never appeared default consistently federal courts cases. Kipling G.P. Putnam's Sons, 120 631, 634 (C.A.2 1903); Doan Book 105 772, 776 (C.A.7 1901); Harrison Maynard, Merrill 61 689, 691 1894); Snellenburg, 131 530, 532 (C.C.E.D. Pa.1904); Clemens Estes, 899, 900 (C.C.D.Mass.1885); Stowe Thomas, Cas. 201, 206-207 (C.C.E.D.Pa.1853). 1908, decided, liberty printing, reprinting, publishing, completing, copying, executing, finishing, vending'' works. 1891, §4952, Stat. 1107 (emphasis added). n. 5, supra. §41 1909, ch. 320, 1084, again §27 1947 391, 660. reads follows:FC22S" §106.Exclusive "Subject 120, authorize following: phonorecords; prepare derivative work; (3) public ownership, rental, lease, lending; (4) literary, musical, dramatic, choreographic pantomimes, motion pictures audiovisual perform publicly; (5) pictorial, graphic, sculptural individual images picture display (6) recordings, publicly means digital audio transmission.'' (1994 ed., Supp. I). 1909 Acts "nothing shall deemed forbid, prevent, obtained.'' §41, 1084; 1947, §27, noteworthy 1978 "any copy''; construction, remembered purely construction. limitation, license controlling book.'' 350, 726, (1908). remainder follows:FC22S"This to- State political subdivision State, schools, archival use; importation, distribution, respect time, arriving forming person's personal baggage; organization operated scholarly, educational, religious gain, solely purposes, library lending activity consisting systematic reproduction 108(g)(2).'' accompanying Despite contention contrary, 26-27, court occurred Such require extraterritorial application "acquired abroad'' does. 11, (1970). 602(b) where making constituted applicable, made.'' 17, quoted representative music industry expressing need stolen prints: "We've similar situation prints, sent world-legitimate prints authentic negative. These get illicit hands. They're stolen, there's relationship Now copies.'' Part 2: Discussion Comments 88th 213 1963) (statement Mr. Sargoy), 1116 A participant 1964 panel discussion expressed concern situation. 4: Further Preliminary Draft Revised 2d 119 1964) Mrs. Pilpel) ("For transferred Canadian section?''); 209 Manges) (describing "a troublesome problem confronts frequently''). strength implication diminished 1976. 106A Visual Artists Rights 1990 order moral visual artists. analogous Article 6bis Berne Convention Protection Literary Artistic Works, limited. §5.12, p. 5:225 1996) (§106A aspects guaranteed Convention, "but effectively narrow scope''). §107 §107.Limitations rights: Fair 106A, specified section, criticism, comment, news reporting, teaching (including multiple classroom use), scholarship, research, factors considered include- character use, nature nonprofit educational purposes; amount substantiality relation whole; effect potential value "The unpublished finding consideration above factors.'' narrower §107, importation. reliance §602(a)(3)'s reference §108(g)(2), supra, 120-including doctrines-do unavailing reasons. Recording Industry Association et al. 19-21. 87. See, e.g., H.R. Rep. 1476, 94th 79 (1979) ("Section restates confirms'' established prior law); S.Rep. 473, 71 (1975) (same). Compare, Gorelick Little, Case Parallel Importation, N.C.J. Int'l L. Reg. 205 (1986), Gordon, Gray Market Is Giving Hair-Product Makers Hair, N.Y. Times, July 13, 1997, 1, 28, col. 1. Presumably avoided competition charging higher prices, satisfied promotion product markets name. advises us Cambodia, Trinidad Tobago, Jamaica, Ecuador, Sri Lanka. note 1991, signed, issued adopting contrary Branch.

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