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13 December 2010

US Supreme Court Leaves Question of First-Sale Doctrine’s Applicability to Foreign-Manufactured Goods for Another Day

Under the Copyright Act’s first-sale doctrine, codified at 17 U.S.C. § 109(a), the owner of any particular copy “lawfully made under this title” may sell or otherwise transfer ownership of that copy without the authorization of the copyright owner. In Quality King Distributors, Inc. v. L’anza Research International, Inc., 523 U.S. 135 (1998), which involved domestically manufactured goods that were sold abroad and then imported back into the United States, the Supreme Court held that the first-sale doctrine is applicable to imported copies. In April of this year, after the Ninth Circuit limited Quality King to its facts and held that the statutory phrase “lawfully made under this title” applies only to domestically manufactured goods, the Supreme Court granted certiorari in Costco Wholesale Corp. v. Omega, S.A., No. 08-1423, to decide whether the first-sale doctrine also applies to imported goods manufactured abroad.

Today, with Justice Kagan taking no part in the case, the Ninth Circuit’s decision was affirmed by an equally divided Court. The Court’s one-sentence order has no precedential effect. Accordingly, the issue—which is important to any retailer, importer, or distributor of copyrighted goods manufactured overseas—may come before the Court yet again should an appropriate case present itself.

For more information on this legal update, please contact Richard M. Assmus at +1 312 701 8623 or Andrew Tauber at +1 202 263 3324.

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