In this case, the Supreme Court considered the ability of domestic copyright owners to prevent importation of copyrighted materials legally sold abroad, resolving a conflict between the Third and Ninth Circuits. The Court unanimously held that the first sale doctrine of § 109(a) of the Copyright Act of 1976 (Act), 17 U.S.C. § 101 et seq., applies to imported copies, reversing the Ninth Circuit decision below. More broadly, the Court affirmed the proposition that § 602(a) of the Act, which makes the unauthorized importation of copies an infringement of the copyright owner’s exclusive distribution right, remains subject to those limitations that restrict § 106(3) of the Act. This section gives the owner of a copyrighted work the exclusive right to distribute copies of that work.L’Anza Research International manufactures and sells a variety of hair care products, and owns copyrights on the product labels. Domestically, L’Anza sells exclusively to distributors who have agreed to resell the product only within specific geographic areas and to authorized retailers. Internationally, however, L’Anza does not require its distributors to abide by these limitations. After an international distributor resold L’Anza products to the petitioner, who subsequently resold them to an unauthorized domestic retailer, L’Anza brought suit, alleging that this sale violated its exclusive rights to reproduce and distribute this material in the United States under 17 U.S.C. §§ 105, 501, and 602. The District Court entered summary judgment for L’Anza, rejecting petitioner’s application of the § 109(a) "first sale" defense. The Court of Appeals for the Ninth Circuit affirmed.
A unanimous Supreme Court reversed. Speaking through Justice Stevens, the Court held that the first sale doctrine of § 109(a) does apply to imported copies. In reaching this conclusion, the Court addressed the statutory language of § 602(a), the provision relied on by respondent for the proposition that the first sale doctrine should not apply to imported copies. While § 602(a) does state that importation without the authority of the copyright owner infringes the exclusive right to distribute, the section speaks of the "exclusive right to distribute under section 106." The language of § 106 thus limits the exclusive right granted under § 602(a). According to the language of § 106, any exclusive right granted by this section is subject to §§ 107 through 120. Section 109(a), therefore, which "expressly permits the owner of a lawfully made copy to sell that copy ‘[n]otwithstanding the provisions of section 106(3),’" limits the scope of § 602(a).
Similarly, the Court rejected respondent’s additional arguments that § 602(a) and its three exceptions would be rendered superfluous if limited by the first sale doctrine, and that § 501, which defines a copyright "infringer," refers separately to violations of § 106 and § 602. The Court rejected these arguments because they failed to adequately explain the placement of the phrase "under section 106" in § 602(a). The Court also rejected the Solicitor General's textual argument that § 602(a)'s reference to "importation" describes an act left unprotected by the first sale doctrine of § 109(a).
Justice Ginsburg wrote a brief concurring opinion recognizing that the opinion of the Court does not resolve cases in which the "allegedly infringing imports were manufactured abroad."