Written By: Laura Fishwick
Edited By: Lauren Henry
The exclusive right to distribute copies is among the bundle of rights that Congress has bestowed onto owners of United States copyrights.[i] Copies of copyrighted works may include books, DVDs, CDs, and copyrighted labels and logos for other consumer products from shampoo to fashion items. The right to distribute copies is limited by the first sale doctrine,[ii] as codified in Title 17 by the Copyright Act of 1976 (“Act”), which entitles the owner of a copy “lawfully made under [Title 17]” to sell or otherwise dispose of the copy without the authorization of the copyright owner.[iii] The first sale doctrine balances the interests of copyright holders in obtaining fair returns on their products with the interests of consumers in accessing goods at low cost and in reselling goods in the marketplace. Concerning rights holders’ importation rights for their copies, § 602(a) of the Act provides that a copyright owner’s exclusive right to distribute copies under § 106(3) is infringed when someone acquires a copy outside of the United States and imports the copy into the United States without the copyright owner’s authority.[iv]
More than a decade ago in Quality King Distributors v. L’anza Research International, the Supreme Court addressed the circumstances in which the first sale doctrine limits copyright owners’ exclusive rights to import copies under § 602(a).[v] In Quality King, the plaintiff manufactured high-end hair care products in the United States and price-discriminated between United States and foreign consumers — selling them for a high price in the United States but discounting them for foreign retailers. Id. at 139. The plaintiff then sued a foreign retailer farther down the resale chain that had purchased the products abroad and resold them in the U.S., claiming a violation of its right to distribute copies under § 602(a). Id. at 138-39. The Court unanimously found that because § 602(a) expressly applies to “infringement of the exclusive right to distribute copies … under section 106,” and section 106 subjects these exclusive rights to “sections 107 through 122,” the importation rights given by § 602(a) are subject to the first sale doctrine in § 109(a). See id. at 143-46. Since Quality King, the general applicability of the first sale doctrine to the § 602(a) bar on importing copies has not been challenged.
Quality King left unresolved the question of whether the first sale doctrine would provide a defense to infringement by importation of copies manufactured abroad, because Quality King only involved products that were manufactured in the U.S. See id. at 154 (Ginsburg, J., concurring). Answering this question will depend on how the first sale doctrine’s statutory requirement that copies be “lawfully made under [Title 17]” is interpreted. See id. This comment will explore the three major circuit court decisions on this topic and suggest an alternative resolution in the aftermath of Quality King. (more…)