Lead Opinion
Section 106 of the Copyright Act grants “the owner of copyright under this title” certain “exclusive rights,” including the right “to distribute copies ... of the copyrighted work to the public by sale or other transfer of ownership.” 17 U. S. C. § 106(3). These rights are qualified, however, by the application of various limitations set forth in the next several sections of the Act, §§ 107 through 122. Those sections, typically
Section 109(a) sets forth the “first sale” doctrine as follows:
“Notwithstanding the provisions of section 106(3) [the section that grants the owner exclusive distribution rights], theowner of a particular copy or phonorecord 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 or phonorec-ord.” (Emphasis added.)
Thus, even though § 106(3) forbids distribution of a copy of, say, the copyrighted novel Herzog without the copyright owner’s permission, § 109(a) adds that, once a copy of Herzog has been lawfully sold (or its ownership otherwise lawfully transferred), the buyer of that copy and subsequent owners are free to dispose of it as they wish. In copyright jargon, the “first sale” has “exhausted” the copyright owner’s § 106(3) exclusive distribution right.
What, however, if the copy of Herzog was printed abroad and then initially sold with the copyright owner’s permission? Does the “first sale” doctrine still apply? Is the buyer, like the buyer of a domestically manufactured copy, free to bring the copy into the United States and dispose of it as he or she wishes?
To put the matter technically, an “importation” provision, § 602(a)(1), says that
“[importation into the United States, without the authority of the owner of copyright under this title, of copies ... of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies . . . under section 106 . . . 17 U. S. C. § 602(a)(1) (2006 ed., Supp. V) (emphasis added).
Thus § 602(a)(1) makes clear that importing a copy without permission violates the owner’s exclusive distribution right. But in doing so, § 602(a)(1) refers explicitly to the §106(3) exclusive distribution right. As we have just said, § 106 is by its terms “[sjubject to” the various doctrines and principles contained in §§ 107 through 122, including § 109(a)’s “first sale” limitation. Do those same modifications apply—in particular, does the “first sale” modification apply—when considering whether § 602(a)(1) prohibits importing a copy?
In Quality King Distributors, Inc. v. Danza Research Int’l, Inc.,
But Quality King considered an instance in which the copy, though purchased abroad, was initially manufactured in the United States (and then sent abroad and sold). This case is like Quality King but for one important fact. The copies at issue here were manufactured abroad. That fact is important because § 109(a) says that the “first sale” doctrine applies to “a particular copy or phonorecord lawfully made under this title.” And we must decide here whether the five words, “lawfully made under this title,” make a critical legal difference.
Putting section numbers to the side, we ask whether the “first sale” doctrine applies to protect a buyer or other lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad. Can that buyer bring that copy into the United States (and sell it or give it away) without obtaining permission to do so from the copyright owner? Can, for example, someone who purchases, say, at a used bookstore, a book printed abroad subsequently resell it without the copyright owner’s permission?
In our view, the answers to these questions are, yes. We hold that the “first
I
A
Respondent, John Wiley & Sons, Inc., publishes academic textbooks. Wiley obtains from its authors various foreign and domestic copyright assignments, licenses, and permissions—to the point that we can, for present purposes, refer to Wiley as the relevant American copyright owner. See
For example, a copy of Wiley’s American edition says: “Copyright © 2008 John Wiley & Sons, Inc. All rights reserved. . . . Printed in the United States of America.” J. Walker, Fundamentals of Physics, p. vi (8th ed. 2008). A copy of Wiley Asia’s Asian edition of that book says:
“Copyright © 2008 John Wiley & Sons (Asia) Pte Ltd[.] All rights reserved. This book is authorized for sale in Europe, Asia, Africa, and the Middle East only and may be not exported [sic] out of these territories. Exportation from or importation of this book to another region without the Publisher’s authorization is illegal and is a violation of the Publisher’s rights. The Publisher may take legal action to enforce its rights. . . . Printed in Asia.” J. Walker, Fundamentals of Physics, p. vi (8th ed. 2008 Wiley Int’l Student ed.).
Both the foreign and the American copies say:
“No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means . . . except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act.” Compare, e.g., ibid. (Int’l ed.) with Walker, supra, at vi (American ed.).
The upshot is that there are two essentially equivalent versions of a Wiley textbook,
Petitioner, Supap Kirtsaeng, a citizen of Thailand, moved to the United States in 1997 to study mathematics at Cornell University. Ibid. He paid for his education with the help of a Thai Government scholarship which required him to teach in Thailand for 10 years on his return. Brief for Petitioner 7. Kirtsaeng successfully completed his undergraduate courses at Cornell, successfully completed a Ph. D. program in mathematics at the University of Southern California, and then, as promised, returned to Thailand to teach. Ibid. While he was studying in the United States, Kirtsaeng asked his friends and family in Thailand to buy copies of foreign edition English-language textbooks at Thai bookshops, where they sold at low prices, and mail them to him in the United States. Id., at 7-8. Kirtsaeng would then sell them, reimburse his family and friends, and keep the profit. App. to Pet. for Cert. 48a-49a.
In 2008 Wiley brought this federal lawsuit against Kirt-saeng for copyright infringement.
The District Court held that Kirtsaeng could not assert the “first sale” defense because, in its view, that doctrine does not apply to “foreign-manufactured goods” (even if made abroad with the copyright owner’s permission). App. to Pet. for Cert. 72a. The jury then found that Kirtsaeng had willfully infringed Wiley’s American copyrights by selling and importing without authorization copies of eight of Wiley’s copyrighted titles. And it assessed statutory damages of $600,000 ($75,000 per work).
On appeal, a split panel of the Second Circuit agreed with the District Court. Id., at 222. It pointed out that § 109(a)’s “first sale” doctrine applies only to “the owner of a particular copy ... lawfully made under this title” Id., at 218-219, and n. 27 (emphasis added). And, in the majority’s view, this language means that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad. Id., at 221. A dissenting judge thought that the words “lawfully made under this title” do not refer “to a place of manufacture” but rather “focu[s] on whether a particular copy was manufactured lawfully under” America’s copyright statute, and that “the lawfulness of the manufacture of a particular copy should be judged by U. S. copyright law.” Id., at 226 (opinion of Murtha, J.).
We granted Kirtsaeng’s petition for certiorari to consider this question in light of different views among the Circuits. Compare id., at 221 (case below) (“first sale” doctrine does not apply to copies manufactured outside the United States), with Omega S. A. v. Costco Wholesale Corp.,
I I
We must decide whether the words lawfully made under this title” restrict the scope of § 109(a)’s “first sale” doctrine geographically. The Second Circuit, the Ninth Circuit, Wiley, and the Solicitor General (as amicus) all read those words as imposing a form of geographical limitation. The Second Circuit held that they limit the “first sale” doctrine to particular copies “made in territories in which the Copyright Act is law,” which (the Circuit says) are copies “manufactured domestically,” not “outside of the United States.”
Under any of these geographical interpretations, § 109(a)’s “first sale” doctrine would not apply to the Wiley Asia books at issue here. And, despite an American copyright owner’s permission to make copies abroad, one who buys a copy of any such book or other copyrighted work—whether at a retail store, over the Internet, or at a library sale—could not resell (or otherwise dispose of) that particular copy without further permission.
Kirtsaeng, however, reads the words “lawfully made under this title” as imposing a wow-geographical limitation. He says that they mean made “in accordance with” or “in compliance with” the Copyright Act. Brief for Petitioner 26. In that case, § 109(a)’s “first sale” doctrine would apply to copyrighted works as long as their manufacture met the requirements of American copyright law. In particular, the doctrine would apply where, as here, copies are manufactured abroad with the permission of the copyright owner. See § 106 (referring to the owner’s right to authorize).
In our view, § 109(a)’s language, its context, and the common-law history of the “first sale” doctrine, taken together, favor a ?wm-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities. See Part II-D, infra. We consequently conclude that Kirtsaeng’s nongeographical reading is the better reading of the Act.
A
The language of § 109(a) read literally favors Kirtsaeng’s nongeographical interpretation, namely, that “lawfully made under this title” means made “in accordance with” or “in compliance with” the Copyright Act. The language of § 109(a) says nothing about geography. The word “under” can mean “[i]n accordance with.” 18 Oxford English Dictionary 950 (2d ed. 1989). See also Black’s Law Dictionary 1525 (6th ed. 1990) (“according to”). And a nongeographical interpretation provides each word of the five-word phrase with a distinct purpose. The first two words of the phrase, “lawfully made,” suggest an effort to distinguish those copies that were made lawfully from those that were not, and the last three words, “under this title,” set forth the standard of “lawful[ness].” Thus, the nongeographical reading is simple, it promotes a traditional copyright objective (combating piracy), and it makes word-by-word linguistic sense.
The geographical interpretation, however, bristles with linguistic difficulties. It
To read the clause geographically, Wiley, like the Second Circuit and the Solicitor General, must first emphasize the word “under.” Indeed, Wiley reads “under this title” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Brief for Respondent 15. Wiley must then take a second step, arguing that the Act “is applicable” only in the United States. Ibid. And the Solicitor General must do the same. See Brief for United States 6 (“A copy is ‘lawfully made under this title’ if Title 17 governs the copy’s creation and the copy is made in compliance with Title 17’s requirements”). See also post, at 562 (Ginsburg, J., dissenting) (“under” describes something “governed or regulated by another”).
One difficulty is that neither “under” nor any other word in the phrase means “where.” See, e. g., 18 Oxford English Dictionary, supra, at 947-952 (definition of “under”). It might mean “subject to,” see post, at 561-562, but as this Court has repeatedly acknowledged, , the word evades a uniform, consistent meaning. See Kucana v. Holder,
A far more serious difficulty arises out of the uncertainty and complexity surrounding the second step’s effort to read the necessary geographical limitation into the word “applicable” (or the equivalent). Where, precisely, is the Copyright Act “applicable”? The Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad. But that fact does not mean the Act is inapplicable to copies made abroad. As a matter of ordinary English, one can say that a statute imposing, say, a tariff upon “any rhododendron grown in Nepal” applies to all Nepalese rhododendrons. And, similarly, one can say that the American Copyright Act is applicable to all pirated copies, including those printed overseas. Indeed, the Act itself makes clear that (in the Solicitor General’s language) foreign-printed pirated copies are “subject to” the Act. § 602(a)(2) (2006 ed., Supp. V) (referring to importation of copies “the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable”); Brief for United States 5. See also post, at 561 (suggesting that “made under” may be read as “subject to”).
The appropriateness of this linguistic usage is underscored by the fact that § 104 of the Act itself says that works “subject to protection under this title” include unpublished works “without regard to the nationality or domicile of the author” and works “first published” in any one of the nearly 180 nations that have signed a copyright treaty with the United States. §§ 104(a), (b) (2006 ed.) (emphasis added); § 101 (2006 ed., Supp. V) (defining “treaty party”); U. S. Copyright Office, Circular No. 38A, International Copyright Relations of the United States (2010). Thus, ordinary English permits us to say that the Act “applies” to an Irish manuscript lying in its author’s Dublin desk drawer as well as to an original recording of a ballet performance first made in Japan and now on display in a Kyoto art gallery. Cf. 4 M. Nimmer & D. Nimmer, Copyright § 17.02, pp. 17-18, 17-19 (2012) (hereinafter Nimmer
The Ninth Circuit’s geographical interpretation produces still greater linguistic difficulty. As we said, that Circuit interprets the “first sale” doctrine to cover both (1) copies manufactured in the United States and (2) copies manufactured abroad but first sold in the United States with the American copyright owner’s permission. Denbicare U. S. A.,
We can understand why the Ninth Circuit may have thought it necessary to add the second part of its definition. As we shall later describe, see Part II-D, infra, without some such qualification a copyright holder could prevent a buyer from domestically reselling or even giving away copies of a video game made in Japan, a film made in Germany, or a dress fabric (with a design copyright) made in China, even if the copyright holder has granted permission for the foreign manufacture, importation, and an initial domestic sale of the copy. A publisher such as Wiley would be free to print its books abroad, allow their importation and sale within the United States, but prohibit students from later selling their used texts at a campus bookstore. We see no way, however, to reconcile this half-geographical/half-non-geographical interpretation with the language of the phrase, “lawfully made under this title.” As a matter of English, it would seem that those five words either do cover copies lawfully made abroad or they do not.
In sum, we believe that geographical interpretations create more linguistic problems than they resolve. And considerations of simplicity and coherence tip the purely linguistic balance in Kirtsaeng’s, nongeographical, favor.
B
Both historical and contemporary statutory context indicate that Congress, when writing the present version of § 109(a), did not have geography in mind. In respect to history, we compare § 109(a)’s present language with the language of its immediate predecessor. That predecessor said:
“[NJothing in this Act shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained.” Copyright Act of 1909, §41, B5 Stat. 1084 (emphasis added).
See also Copyright Act of 1947, §27, 61 Stat. 660. The predecessor says nothing about geography (and Wiley does not argue that it does). So we ask whether Congress, in changing its language, implicitly introduced a geographical limitation that previously was lacking. See also Part II-C, infra (discussing 1909 codification of common-law principle).
A comparison of language indicates that it did not. The predecessor says that the “first sale” doctrine protects “the transfer of any copy the possession of which has been lawfully obtained” The present version says that “the owner of a particular copy or phonorecord lawfully made under this title is entitled to sell or otherwise dispose of the possession of that copy or
The language of the former version referred to those who are not owners of a copy, but mere possessors who “lawfully obtained” a copy. The present version covers only those who are owners of a “lawfully made” copy. Whom does the change leave out? Who might have lawfully obtained a copy of a copyrighted work but not owned that copy? One answer is owners of movie theaters, who during the 1970⅛ (and before) often leased films from movie distributors or filmmakers. See S. Donahue, American Film Distribution 134, 177 (1987) (describing producer-distributer and distributer-exhibitor agreements); Note, The Relationship Between Motion Picture Distribution and Exhibition: An Analysis of the Effects of Anti-Blind Bidding Legislation, 9 Comm/Ent. L. J. 131, 135 (1986). Because the theater owners had “lawfully obtained” their copies, the earlier version could be read as allowing them to sell that copy, i. e., it might have given them “first sale” protection. Because the theater owners were lessees, not owners, of their copies, the change in language makes clear that they (like bailees and other lessees) cannot take advantage of the “first sale” doctrine. (Those who find legislative history useful will find confirmation in, e. g., House Committee on the Judiciary, Copyright Law Revision, Supplementary Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law: 1965 Revision Bill, 89th Cong., 1st Sess., pt. 6, p. 30 (Comm. Print 1965) (hereinafter Copyright Law Revision) (“[W]here a person has rented a print of a motion , picture from the copyright owner, he would have no right to lend, rent, sell, or otherwise dispose of the print without first obtaining the copyright owner’s permission”). See also Platt & Munk Co. v. Republic Graphics, Inc.,
This objective perfectly well explains the new language of the present version, including the five words here at issue. Section 109(a) now makes clear that a lessee of a copy will not receive “first sale” protection but one who owns a copy will receive “first sale” protection, provided, of course, that the copy was “lawfully made” and not pirated. The new language also takes into account that a copy may be “lawfully made under this title” when the copy, say, of a phonorec-ord, comes into its owner’s possession through use of a compulsory license, which “this title” provides for elsewhere, namely, in § 115. Again, for those who find legislative history useful, the relevant legislative Report makes this clear. H. R. Rep. No. 94-1476, p. 79 (1976) (“For example, any resale of an illegally ‘pirated’ phonorecord would be an infringement, but the disposition of a phonorecord legally made under the compulsory licensing provisions of section 115 would not”).
Other provisions of the present statute also support a nongeographical interpretation. For one thing, the statute phases out the “manufacturing clause,” a clause that appeared in earlier statutes and had limited importation of many copies (of copyrighted works) printed outside the United States. §601, 90 Stat. 2588 (“Prior to July 1, 1982 . . . the importation into or public distribution in the United States of copies of a work consisting preponderantly of nondramatic literary material ... is prohibited unless the portions consisting of such material have been manufactured in the United States or Canada”). The phasing out of this clause sought to equalize treatment of copies manufactured in America and copies
The “equal treatment” principle, however, is difficult to square with a geographical interpretation of the “first sale” clause that would grant the holder of an American copyright (perhaps a foreign national, see supra, at 532) permanent control over the American distribution chain (sales, resales, gifts, and other distribution) in respect to copies printed abroad but not in respect to copies printed in America. And it is particularly difficult to believe that Congress would have sought this unequal treatment while saying nothing about it and while, in a related clause (the manufacturing phaseout), seeking the opposite kind of policy goal. Cf. Golan v. Holder,
Finally, we normally presume that the words “lawfully made under this title” carry the same meaning when they appear in different but related sections. Department of Revenue of Ore. v. ACF Industries, Inc.,
(1) Section 109(c) says that, despite the copyright owner’s exclusive right “to display” a copyrighted work (provided in §106(5)), the owner of a particular copy “lawfully made under this title” may publicly display it without further authorization. To interpret these words geographically would mean that one who buys a copyrighted work of art, a poster, or even a bumper sticker, in Canada, in Europe, in Asia, could not display it in America without the copyright owner’s further authorization.
(2) Section 109(e) specifically provides that the owner of a particular copy of a copyrighted video arcade game “lawfully made under this title” may “publicly perform or display that game in coin-operated equipment” without the authorization of the copyright owner. To interpret these words geographically means that an arcade owner could not (“without the authority of the copyright owner”) perform or display arcade games (whether new or used) originally made in Japan. Cf. Red Baron-Franklin Park, Inc. v. Taito Corp.,883 F. 2d 275 (CA4 1989).
(3) Section 110(1) says that a teacher, without the copyright owner’s authorization, is allowed to perform or display a copyrighted work (say, an audiovisual work) “in the course of face-to-face teaching activities”—unless the teacher knowingly used “a copy that was not lawfully made under this title.” To interpret these words geographically would mean that the teacher could not (without farther authorization) use a copy of a film during class if the copy was lawfully made in Canada, Mexico, Europe, Africa, or Asia.
(4) In its introductory sentence, §106 provides the Act’s basic exclusive rights to an “owner of a copyright under this title.” The last three words cannot support a geographic interpretation.
Wiley basically accepts the first three readings, but argues that Congress intended the restrictive consequences. And it argues that context simply requires that the words of the fourth example receive a different interpretation. Leaving the fourth example to the side, we shall explain in Part IID, infra, why we find it unlikely that Congress would have intended these and other related consequences.
A relevant canon of statutory interpretation favors a non-geographical reading. “[W]hen a statute covers an issue previously governed by the common law,” we must presume that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf,
The “first sale” doctrine is a common-law doctrine with an impeccable historic pedigree. In the early 17th century Lord Coke explained the common law’s refusal to permit restraints on the alienation of chattels. Referring to Little-ton, who wrote in the 15th century, Gray, Two Contributions to Coke Studies, 72 U. Chi. L. Rev. 1127, 1135 (2005), Lord Coke wrote:
“[If] a man be possessed of ... a horse, or of any other chattell... and give or sell his whole interest... therein upon condition that the Donee or Vendee shall not alién-tate] the same, the [condition] is voi[d], because his whole interest ... is out of him, so as he hath no possibility] of a Reverter, and it is against Trade and Traffi[e], and bargaining and contracting betwee[n] man and man: and it is within the reason of our Author that it should ouster him of all power given to him.” 1 E. Coke, Institutes of the Laws of England § 360, p. 223 (1628).
A law that permits a copyright holder to control the resale or other disposition of a chattel once sold is similarly “against Trade and Traffi[c], and bargaining and contracting.” Ibid.
With these last few words, Coke emphasizes the importance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. American law too has generally thought that competition, including freedom to resell, can work to the advantage of the consumer. See, e. g., Leegin Creative Leather Products, Inc. v. PSKS, Inc.,
The “first sale” doctrine also frees courts from the administrative burden of trying to enforce restrictions upon difficult-to-trace, readily movable goods. And it avoids the selective enforcement inherent in any such effort. Thus, it is not surprising that for at least a century the “first sale” doctrine has played an important role in American copyright law. See Bobbs-Merrill Co. v. Straus,
The common-law doctrine makes no geographical distinctions; nor can we find any in Bobbs-Merrill (where this Court first applied the “first sale” doctrine) or in § 109(a)’s predecessor provision, which Congress enacted a year later. See
The dissent argues that another principle of statutory interpretation works against our reading, and points out that elsewhere in the statute Congress used different words to express something like the nongeographical reading we adopt. Post, at 564 (quoting § 602(a)(2) (prohibiting the importation of copies “the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable” (emphasis deleted))). Hence, Congress, the dissent believes, must have meant § 109(a)’s different language to mean something different (such as the dissent’s own geographical interpretation of § 109(a)). We are not aware, however, of any canon of interpretation that forbids interpreting different words used in different parts of the same statute to mean roughly the same thing. Regardless, were there such a canon, the dissent’s interpretation of § 109(a) would also violate it. That is because Congress elsewhere in the 1976 Act included the words “manufactured in the United States or Canada,” 90 Stat. 2588, which express just about the same geographical thought that the dissent reads into § 109(a)’s very different language.
D
Associations of libraries, used-book dealers, technology companies, consumer-goods retailers, and museums point to various ways in which a geographical interpretation would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and useful Arts.” U. S. Const., Art. I, §8, cl. 8.
The American Library Association tells us that library collections contain at least 200 million books published abroad (presumably, many were first published in one of the nearly 180 copyright-treaty nations, and,enjoy American copyright protection under 17 U. S. C. § 1Ó4, see supra, at 532); that many others were first published in the United States but printed abroad because of lower costs; and that a geographical interpretation will likely require the libraries to obtain permission (or at least create significant uncertainty) before circulating or otherwise distributing these books. Brief for American Library Association et al. as Amici Curiae 4, 15-20. Cf. id., at 16-20, 28 (discussing limitations of potential defenses, including the fair use and archival exceptions, §§ 107-108). See also Library and Book Trade Almanac 511 (D. Bogart ed., 55th ed. 2010) (during 2000-2009 “a significant amount of book printing moved to foreign nations”).
How, the American Library Association asks, are the libraries -to obtain permission to distribute these millions of books? How can they find, say, the copyright owner of a foreign book, perhaps written decades ago? They may not know the copyright holder’s present address. Brief for American Library Association 15 (many books lack indication of place of manufacture; “no practical way to learn where [a] book was printed”). And, even where addresses can be found, the costs of finding them, contacting owners, and negotiating may be high indeed. Are the libraries to stop circulating or distributing or displaying the millions of books in their collections that were printed abroad?
Used-book dealers tell us that, from the time when Benjamin Franklin and Thomas
Technology companies tell us that “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers” contain copyrightable software programs or packaging. Brief for Public Knowledge et al. as Amici Curiae 10. See also Brief for Association of Service and Computer Dealers International, Inc., as Amicus Curiae 2. Many of these items are made abroad with the American copyright holder’s permission and then sold and imported (with that permission) to the United States. Brief for Retail Litigation Center, Inc., et al. as Amici Curiae 4. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and Wiley did not indicate to the contrary when asked. See Tr. of Oral Arg. 29-30. Without that permission a foreign car owner could not sell his or her used car.
Retailers tell us that over $2.3 trillion worth of foreign goods were imported in 2011. Brief for Retail Litigation Center 8. American retailers buy many of these goods after a first sale abroad. Id., at 12. And, many of these items bear, carry, or contain copyrighted “packaging, logos, labels, and product inserts and instructions for [the use of] everyday packaged goods from floor cleaners and health and beauty products to breakfast cereals.” Id., at 10-11. The retailers add that American sales of more traditional copyrighted works, “such as books, recorded music, motion pictures, and magazines,” likely amount to over $220 billion. Id., at 9. See also id., at 10 (electronic game industry is $16 billion). A geographical interpretation would subject many, if not all, of them to the disruptive impact of the threat of infringement suits. Id., at 12.
Art museum directors ask us to consider their efforts to display foreign-produced works by, say, Cy Twombly, René Magritte, Henri Matisse, Pablo Picasso, and others. See su-pra, at 532 (describing how § 104 often makes such works “subject to” American copyright protection). A geographical interpretation, they say, would require the museums to obtain permission from the copyright owners before they could display the work, see supra, at 537—even if the copyright owner has already sold or donated the work to a foreign museum. Brief for Association of Art Museum Directors et al. as Amici Curiae 10-11. What are the museums to do, they ask, if the artist retained the copyright, if the artist cannot be found, or if a group of heirs is arguing about who owns which copyright? Id., at 14.
These examples, and others previously mentioned, help explain why Lord Coke considered the “first sale” doctrine necessary
Neither Wiley nor any of its many amici deny that a geographical interpretation could bring about these “horri-bles”—at least in principle. Rather, Wiley essentially says that the list is artificially invented. Brief for Respondent 51-52. It points out that a federal court first adopted a geographical interpretation more than 30 years ago. CBS, Inc. v. Scorpio Music Distributors, Inc.,
We are less sanguine. For one thing, the law has not been settled for long in Wiley’s favor. The Second Circuit, in its decision below, is the first Court of Appeals to adopt a purely geographical interpretation. The Third Circuit has favored a nongeographical interpretation. Sebastian Int’l,
For another thing, reliance upon the “first sale” doctrine is deeply embedded in the practices of those, such as booksellers, libraries, museums, and retailers, who have long relied upon its protection. Museums, for example, are not in the habit of asking their foreign counterparts to check with the heirs of copyright owners before sending, e. g., a Picasso on tour. Brief for Association of Art Museum Directors 11-12. That inertia means a dramatic change is likely necessary before these institutions, instructed by their counsel, would begin to engage in the complex permission-verifying process that a geographical interpretation would demand. And this Court’s adoption of the geographical interpretation could provide that dramatic change. These intolerable consequences (along with the absurd result that the copyright owner can exercise downstream control even when it authorized the import or first sale) have understandably led the Ninth Circuit, the Solicitor General as amicus, and the dissent to adopt textual readings of the statute that attempt to mitigate these harms. Brief for United States 27-28; post, at 579-582. But those readings are not defensible, for they require too many unprecedented jumps over linguistic and other hurdles that in our view are insurmountable. See, e. g.,_ post, at 581 (acknowledging that its reading of § 106(3) “significantly curtails the independent effect of § 109(a)”).
Finally, the fact that harm has proved limited so far may simply reflect the reluctance of copyright holders so far to assert geographically based resale rights. They may decide differently if the law is clarified in their favor. Regardless, a copyright law that can work in practice only if unenforced is not a sound copyright law. It is a law that would create uncertainty, would bring about selective enforcement, and, if widely unenforced, would breed disrespect for copyright law itself.
Ill
Wiley and the dissent make several additional important arguments in favor of the geographical interpretation. First, they say that our Quality King decision strongly supports its geographical interpretation. In that case we asked whether the Act’s “importation provision,” now § 602(a)(1) (then § 602(a)), barred importation (without permission) of a copyrighted item (labels affixed to hair care products) where an American copyright owner authorized the first sale and export of hair care products with copyrighted labels made in the United States, and where a buyer sought to import them back into the United States without the copyright owner’s permission.
We held that the importation provision did not prohibit sending the products back into the United States (without the copyright owner’s permission). That section says:
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106.” 17 U. S. C. § 602(a)(1) (2006 ed., Supp. V) (emphasis added).
See also § 602(a) (1994 ed.).
We pointed out that this section makes importation an infringement of the “exclusive right to distribute . . . under 106.” We noted that § 109(a)’s “first sale” doctrine limits the scope of the § 106 exclusive distribution right. We took as given the fact that the products at issue had at least once been sold. And we held that consequently, importation of the copyrighted labels does not violate § 602(a)(1).
In reaching this conclusion we endorsed Bobbs-Merrill and its statement that the copyright laws were not “intended to create a right which would permit the holder of the copyright to fasten, by notice in a book ... a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it.”
We also explained why we rejected the claim that our interpretation would make § 602(a)(1) pointless. Those advancing that claim had pointed out that the 1976 Copyright Act amendments retained a prior antipiracy provision, prohibiting the importation of pirated copies. Quality King, supra, at 146. Thus, they said, § 602(a)(1) must prohibit the importation of lawfully made copies, for to allow the importation of those lawfully made copies after a first sale, as Quality King’s, holding would do, would leave § 602(a)(1) without much to prohibit. It would become superfluous, without any real work to do.
In Quality King we rejected the “superfluous” argument for similar reasons. But, when rejecting it, we said that, where an author gives exclusive American distribution rights to an American publisher and exclusive British distri-button rights to a British publisher, “presumably only those [copies] made by the publisher of the United States edition would be ‘lawfully made under this title’ within the meaning of § 109(a).”
We cannot, however, give the Quality King statement the legal weight for which Wiley argues. The language “lawfully made under this title” was not at issue in Quality King-, the point before us now was not then fully argued; we did not canvass the considerations we have here set forth; we there said nothing to suggest that the example assumes a “first sale”; and we there hedged our statement with the word “presumably. ” Most importantly, the statement is pure dictum. It is dictum contained in a rebuttal to a counterargument. And it is unnecessary dictum even in that respect. Is the Court having once written dicta calling a tomato a vegetable bound to deny that it is a fruit forever after?
To the contrary, we have written that we are not necessarily bound by dicta should more complete argument demonstrate that the dicta is not correct. Central Va. Community College v. Katz,
Second, Wiley and the dissent argue (to those who consider legislative history) that the Act’s legislative history supports their interpretation. But the historical events to which it points took place more than a decade before the enactment of the Act and, at best, are inconclusive.
During the 1960⅛, representatives of book, record, and film industries, meeting with the Register of Copyrights to discuss copyright revision, complained about the difficulty of dividing international markets. Copyright Law Revision Discussion and Comments on Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law, 88th Cong., 1st Sess., pt. 2, p. 212 (Comm. Print 1963) (English editions of “particular” books “fin[d]” their “way into this country”); id., at 213 (works “published] in a country where there is no copyright protection of any sort” are put into “the free stream of commerce” and “shipped to the United States”); ibid, (similar concern in respect to films).
The then-Register of Copyrights, Abraham Kaminstein, found these examples “very troubling].” Ibid. And the Copyright Office released a draft provision that it said “deals with the matter of the importation for distribution in the United States of foreign copies that were made under proper authority but that, if sold in the United States, would be sold in contravention of the rights of the copyright owner who holds the exclusive right to sell copies in the United States.” Id., pt. 4, at 203. That draft version, without reference to § 106, simply forbids unauthorized imports. It said:
“Importation into the United States of copies or records of a work for the purpose of distribution to the public shall, if such articles are imported without the authority of the owner of the exclusive right to distribute copies or records under this title, constitute an infringement of copyright actionable under section 35 [17 U. S. C. § 501].” Id., Preliminary Draft for Revised U. S. Copyright Law and Discussions and Comments, 88th Cong., 2d Sess., pt. 3, pp. 32-33 (Comm. Print 1964).
In discussing the draft, some of those present expressed concern about its effect on the “first sale” doctrine. For example, Irwin Karp, representing the Authors League of America asked, “If a German jobber lawfully buys copies from a German publisher, are we not running into the problem of restricting his transfer of his lawfully obtained copies?” Id., pt. 4, at 211. The Copyright Office representative replied: “This could vary from one situation to another, I guess. I should guess, for example, that if a book publisher transports [i. e., does not sell] copies to a wholesaler [i. e., a nonowner], this is not yet the kind of transaction that exhausts the right to control disposition.” Ibid, (emphasis added).
The Office later withdrew the draft, replacing it with a draft, which, by explicitly referring to § 106, was similar to the provision that became law, now § 602(a)(1). The Office noted in a report that, under the new draft, importation of a copy (without permission) “would violate the exclusive rights of the U. S. copyright owner . . . where the copyright owner had authorized the making of copies in a foreign country for distribution only in that country.” Id., pt. 6, at 150.
Still, that part of the report says nothing about the “first sale” doctrine, about § 109(a), or about the five words, “lawfully made under this title.” And neither the report nor its accompanying 1960’s draft answers the question before us here. Cf. Quality King,
But to ascertain the best reading of § 109(a), rather than dissecting the remarks of industry representatives concerning § 602 at congressional meetings held 10 years before the statute was enacted, see post, at 568-571, we would give greater weight to the congressional Report accompanying § 109(a), written a decade later when Congress passed the new law. That Report says:
“Section 109(a) restates and confirms the principle that, where the copyright owner has transferred ownership of a particular copy or phonorecord of a work, the person to whom the copy or phonorecord is transferred is entitled to dispose of it by sale, rental, or any other means. Under this principle, which has been established by the court decisions and ... the present law, the copyright owner’s exclusive right of public distribution would have no effect upon anyone who owns ‘a particular copy or phonorecord lawfully made under this title’ and who wishes to transfer it to someone else or to destroy it.
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“To come within the scope of section 109(a), a copy or phonorecord must have been ‘lawfully made under this title,’ though not necessarily with the copyright owner’s authorization. For example, any resale of an illegally ‘pirated’ phonorecord would be an infringement but the disposition of a phonorecord legally made under the compulsory licensing provisions. of section 115 would not.” H. R. Rep. No. 94-1476, at 79 (emphasis added).
Accord, S. Rep. No. 94-473, pp. 71-72 (1975).
This history reiterates the importance of the “first sale” doctrine. See, e. g., Copyright Law Revision, 1964 Revision Bill with Discussions and Comments, 89th Cong., 1st Sess., pt. 5, p. 66 (Comm. Print 1965) (“[F]ull ownership of a lawfully-made copy authorizes its owner to dispose of it freely”). It explains, as we have explained, the nongeo-graphical purposes of the words “lawfully made under this title.” Part II-B, supra. And it says nothing about geography. Nor, importantly, did §109(a)’s predecessor provision. See supra, at 534. This means that, contrary to the dissent’s suggestion, any lack of legislative history pertaining to the “first salé” doctrine only tends to bolster our position that Congress’ 1976 revision did not intend to create a drastic geographical change in its revision to that provision. See post, at 573, n. 13. We consequently believe that the legislative history, on balance, supports the nongeographi-eal interpretation.
Third, Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.
The Constitution describes the nature of American copyright law by providing Congress with the power to “secur[ej” to “[ajuthors” “for limited [tjimes” the “exclusive [rjight to their . . . [wjritings.” Art. I, §8, cl. 8. The Founders, too, discussed the need to grant an author a limited right to exclude competition. Compare Letter from Thomas Jefferson to James Madison (July 31, 1788), in 13 Papers of Thomas
To the contrary, Congress enacted a copyright law that (through the “first sale” doctrine) limits copyright holders’ ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid market divisions. Cf. Palmer v. BRG of Ga., Inc.,
Fourth, the dissent and Wiley contend that our decision launches United States copyright law into an unprecedented regime of “international exhaustion. ” Post, at 573-578; Brief for Respondent 45-46. But they point to nothing indicative of congressional intent in 1976. The dissent also claims that it is clear that the United States now opposes adopting such a regime, but the Solicitor General as amicus has taken no such position in this case. In fact, when pressed at oral argument, the Solicitor General stated that the consequences of Wiley’s reading of the statute (perpetual downstream control) were “worse” than those of Kirtsaeng’s reading (restriction of market segmentation). Tr. of Oral Arg. 51. And the dissent’s reliance on the Solicitor General’s position in Quality King is undermined by his agreement in that case with our reading of § 109(a). Brief for United States as Amicus Curiae in Quality King, O. T. 1996, No. 1470, p. 30 (“When . . . Congress wishes to make the location of manufacture relevant to Copyright Act protection, it does so expressly”); ibid, (calling it “distinctly unlikely” that Congress would have provided an incentive for overseas manufacturing).
Moreover, the exhaustion regime the dissent apparently favors would provide that “the sale in one country of a good” does not “exhaus[t] the intellectual property owner’s right to control the distribution of that good elsewhere.” Post, at 574. But our holding in Quality King that § 109(a) is a defense in U. S. courts even when “the first sale occurred abroad,”
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For these reasons we conclude that the considerations supporting Kirtsaeng’s nongeographical interpretation of the words “lawfully made under this title” are the more persuasive. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Concurrence Opinion
I concur fully in the Court’s opinion. Neither the text nor the history of 17 U. S. C. § 109(a) supports removing first-sale protection from every copy of a protected work manufactured abroad. See ante, at 530-538, 548-551. I recognize, however, that the combination of today’s decision and Quality King Distributors, Inc. v. L’anza Research Int’l, Inc.,
As the Court explains, the first-sale doctrine has played an integral part in American copyright law for over a century. See ante, at 538-540; Bobbs-Merrill Co. v. Straus,
That said, John Wiley is right that the Court’s decision, when combined with Quality King, substantially narrows § 602(a)(1)’s ban on unauthorized importation. Quality King held that the importation ban does not reach any copies receiving first-sale protection under § 109(a). See
But if Congress views the shrinking of § 602(a)(1) as a problem, it should recognize Quality King—not our decision today—as the culprit. Here, after all, we merely construe § 109(a); Quality King is the decision holding that § 109(a) limits § 602(a)(1). Had we come out the opposite way in that case, § 602(a)(1) would allow a copyright owner to restrict the importation of copies irrespective of the first-sale doctrine.
At bottom, John Wiley (together with the dissent) asks us to misconstrue § 109(a) in order to restore § 602(a)(1) to its purportedly rightful function of enabling copyright holders to segment international markets. I think John Wiley may have a point about what § 602(a)(1) was designed to do; that gives me pause about Quality King’s holding that the first-sale doctrine limits the importation ban’s scope. But the Court today correctly declines the invitation to save § 602(a)(1) from Quality King by destroying the first-sale protection that § 109(a) gives to every owner of a copy manufactured abroad. That would swap one (possible) mistake for a much worse one, and make our reading of the statute only less reflective of congressional intent. If Congress thinks copyright owners need greater power to restrict importation and thus divide markets, a ready solution is at hand—not the one John Wiley offers in this case, but the one the Court rejected in Quality King.
Notes
Although Quality King concluded that the statute’s text foreclosed that outcome, see
Indeed, allowing the copyright owner to restrict imports irrespective of the first-sale doctrine—i. e., reversing Quality King—would yield a far more sensible scheme of market segmentation than would adopting John Wiley’s argument here. That is because only the former approach turns on the intended market for copies; the latter rests instead on their place of manufacture. To see the difference, imagine that John Wiley prints all its textbooks in New York, but wants to distribute certain versions only in Thailand. Without Quality King, John Wiley could do so—i. e., produce books in New York, ship them to Thailand, and prevent anyone from importing them back into the United States. But with Quality King, that course is not open to John Wiley even under its reading of § 109(a): To prevent someone like Kirtsaeng from re-importing the books— and so to segment the Thai market—John Wiley would have to move its printing facilities abroad. I can see no reason why Congress would have conditioned a copyright owner’s power to divide markets on outsourcing its manufacturing to a foreign country.
Dissenting Opinion
with whom Justice Kennedy joins, and with whom Justice Scalia joins except as to Parts III and V-B-1, dissenting.
“In the interpretation of statutes, the function of the courts is easily stated. It is to construe the language so as to give effect to the intent of Congress.” United States v. American Trucking Assns., Inc.,
To justify a holding that shrinks to insignificance copyright protection against the unauthorized importation of foreign-made copies, the Court identifies several “practical problems.” Ante, at 545. The Court’s parade of horribles, however, is largely imaginary. Congress’ objective in
I
Because economic conditions and demand for particular goods vary across the globe, copyright owners have a financial incentive to charge different prices for copies of their works in different geographic regions. Their ability to engage in such price discrimination, however, is undermined if arbitrageurs are permitted to import copies from low-price regions and sell them in high-price regions. The question in this case is whether the unauthorized importation of foreign-made copies constitutes copyright infringement under U. S. law.
To answer this question, one must examine three provisions of Title 17 of the U. S. Code: §§106(3), 109(a), and 602(a)(1). Section 106 sets forth the “exclusive rights” of a copyright owner, including the right “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” § 106(3). This distribution right is limited by § 109(a), which provides: “Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord 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 or phonorecord.” Section 109(a) codifies the “first sale doctrine,” a doctrine articulated in Bobbs-Merrill Co. v. Straus,
Section 602(a)(1) (2006 ed., Supp. V)
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.”
In Quality King Distributors, Inc. v. L’anza Research Int’l, Inc.,
“If the author of [a] work gave the exclusive United States distribution rights—enforceable under the Act— to the publisher of the United States edition and the exclusive British distribution rights to the publisher of the British edition, . . . presumably only those [copies] made by the publisher of the United States edition would be ‘lawfully made under this title’ within the meaning of § 109(a). The first sale doctrine would not provide the publisher of the British edition who decided to sell in the American market with a defense to an action under § 602(a) (or, for that matter, to an action under § 106(3), if there was a distribution of the copies).” Id., at 148.
As the District Court and the Court of Appeals concluded, see
The Court does not deny that under the language I have quoted from
II
The text of the Copyright Act demonstrates that Congress intended to provide copyright owners with a potent remedy against the importation of foreign-made copies of their copyrighted works. As the Court recognizes, ante, at 525, this case turns on the meaning of the phrase “lawfully made under this title” in § 109(a). In my view, that phrase is most sensibly read as referring to instances in which a copy’s creation is governed by, and conducted in compliance with, Title 17 of the U. S. Code. This reading is consistent with the Court’s interpretation of similar language in other statutes. See Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc.,
Section 109(a), properly read, affords Kirtsaeng no defense against Wiley’s claim of copyright infringement. The Copyright Act, it has been observed time and again, does not apply extraterritorially. See United Dictionary Co. v. G. & C. Merriam Co.,
The Court’s point of departure is similar to mine. According to the Court, the phrase “ ‘lawfully made under this title’ means made fin accordance with’ or fin compliance with’ the Copyright Act.” Ante, at 530. But the Court overlooks that, according to the very dictionaries it cites, ante, at 531, the word “under” commonly signals a relationship of subjection, where one thing is governed or regulated by another. See Black’s Law Dictionary 1525 (6th ed. 1990) (“under”
The logical implication of the Court’s definition of the word “under” is that any copy manufactured abroad—even a piratical one made without the copyright owner’s authorization and in violation of the law of the country where it was created—would fall within the scope of § 109(a). Any such copy would have been made “in accordance with” or “in compliance with” the U. S. Copyright Act, in the sense that manufacturing the copy did not violate the Act (because the Act does not apply extraterritorially).
The Court rightly refuses to accept such an absurd conclusion. Instead, it interprets § 109(a) as applying only to copies whose making actually complied with Title 17, or would have complied with Title 17 had Title 17 been applicable (i. e., had the copies been made in the United States). See ante, at 530 (“[Section] 109(a)’s ‘first sale’ doctrine would apply to copyrighted works as long as their manufacture met the requirements of American copyright law.”). Congress, however, used express language when it called for such a coun-terfactual inquiry in 17 U. S. C. §§ 602(a)(2) and (b). See § 602(a)(2) (“Importation into the United States or exportation from the United States, without the authority of the owner of copyright under this title, of copies or phonorec-ords, the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable, is an infringement of the exclusive right to distribute copies or pho-norecords under section 106.” (emphasis added)); § 602(b) (“In a case where the making of the copies or phonorecords would have constituted an infringement of copyright if this title had been applicable, their importation is prohibited.” (emphasis added)). Had Congress intended courts to engage in a similarly hypothetical inquiry under § 109(a), Congress would presumably have included similar language in that section. See Russello v. United States,
Not only does the Court adopt an unnatural construction of the § 109(a) phrase “lawfully made under this title.” Concomitantly, the Court reduces § 602(a)(1) to insignificance. As the Court appears to acknowledge, see ante, at 547, the only independent effect § 602(a)(1) has under today’s decision is to prohibit unauthorized importations carried out by persons who merely have possession of, but do not own, the imported copies. See 17 U. S. C. § 109(a) (§ 109(a) applies to any “owner of a particular copy or phonorecord lawfully made under this title” (emphasis added)).
The Court’s decision also overwhelms 17 U. S. C. §602(a)(3)’s exceptions to §602(a)(l)’s importation prohibition. 2 P. Goldstein, Copyright § 7.6.1.2(a), p. 7:141 (3d ed. 2012) (hereinafter Goldstein).
The far more plausible reading of §§ 109(a) and 602(a), then, is that Congress intended § 109(a) to apply to copies made in the United States, not to copies manufactured and sold abroad. That reading of the first sale and importation provisions leaves § 602(a)(3)’s exceptions with real, meaningful work to do. See TRW Inc. v. Andrews,
Ill
The history of § 602(a)(1) reinforces the conclusion I draw from the text of the relevant provisions: § 109(a) does not apply to copies manufactured abroad. Section 602(a)(1) was enacted as part of the Copyright Act of 1976, 90 Stat. 2589-2590. That Act was the product of a lengthy revision effort overseen by the U. S. Copyright Office. See Mills Music, Inc. v. Snyder,
Publishing-industry representatives argued strenuously against the position initially taken by the Copyright Office. At a 1962 panel discussion on the Copyright Office’s report, for example, Horace Manges of the American Book Publishers Council stated:
“When a U. S. book publisher enters into a contract with a British publisher to acquire exclusive U. S. rights for a particular book, he often finds that the English edition ... of that particular book finds its way into this country. Now it’s all right to say, ‘Commence a lawsuit for breach of contract.’ But this is expensive, burdensome, and, for the most part, ineffective.” Copyright Law Revision Part 2: Discussion and Comments on Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law, 88th Cong., 1st Sess., 212 (H. R. Judiciary Comm. Print 1963).
Sidney Diamond, representing London Records, elaborated on Manges’ statement. “There are many situations,” he explained, “in which it is not necessarily a question of the inadequacy of a contract remedy—in the sense that it may be difficult or not quick enough to solve the particular problem.” Id., at 213. “Very frequently,” Diamond stated, publishers “run into a situation where ... copies of [a] work... produced in a foreign country... may be shipped [to the United States] without violating any contract of the U. S. copyright proprietor.” Ibid. To illustrate, Diamond noted, if a “British publisher [sells a copy] to an individual who in turn ship[s] it over” to the United States, the individual’s conduct would not “violate [any] contract between the British and the American publisher.” Ibid. In such a case, “no possibility of any contract remedy” would exist. Ibid. The facts of Kirtsaeng’s case fit Diamond’s example, save that the copies at issue here were printed and initially sold in Asia rather than Great Britain.
After considering comments on its 1961 report, the Copyright Office “prepared a preliminary draft of provisions for a new copyright statute.” Copyright Law Revision Part 3: Preliminary Draft for Revised U. S. Copyright Law and Discussions and Comments on the Draft, 88th Cong., 2d Sess., v (H. R. Judiciary Comm. Print 1964). Section 44 of the draft statute addressed the concerns raised by publishing-industry representatives. In particular, § 44(a) provided:
“Importation into the United States of copies or records of a work for the purpose of distribution to the public shall, if such articles are imported without the authority of the owner of the exclusive right to distribute copies or records under this title, constitute an infringement of copyright actionable under section 35 [1 e., the section providing for a private cause of action for copyright infringement].” Id., at 32-33.
In a 1964 panel discussion regarding the draft statute, Abe Goldman, the Copyright Office’s General Counsel, left no doubt about the meaning of § 44(a). It represented, he explained, a “shif[t]” from the Copyright Office’s 1961 report, which had recommended against using copyright law to facilitate publishers’ efforts to segment international markets. Copyright Law Revision Part 4: Further Discussions and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong., 2d Sess., 203 (H. R. Judiciary Comm. Print 1964). Section 44(a), Goldman stated, would allow copyright owners to bring infringement actions against importers of “foreign copies that were made under proper authority.” Ibid. See also id., at 205-206 (Goldman agreed with a speaker’s comment that § 44(a) “enlarge[d]” U. S. copyright law by extending import prohibitions “to works legally produced in Europe” and other foreign countries).
The next step in the copyright revision process was the introduction in Congress
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work for the purpose of distribution to the public is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.” Id., at 292.12
The Court implies that the 1965 bill’s “explicift] refer[enee] to § 106” showed a marked departure from § 44(a) of the Copyright Office’s prior draft. Ante, at 550. The Copyright Office, however, did not see it that way. In its summary of the 1965 bill’s provisions, the Copyright Office observed that § 602(a) of the 1965 bill, like § 44(a) of the Copyright Office’s prior draft, see supra, at 571 and this page, permitted copyright owners to bring infringement actions against unauthorized importers in cases “where the copyright owner had authorized the making of [the imported] copies in a foreign country for distribution only in that country.” Copyright Law Revision Part 6, at 149-150. See also id., at xxvi (Under § 602(a) of the 1965 bill, “[a]n unauthorized importer could be enjoined and sued for damages both where the copies or phonorecords he was importing were ‘piratical’ (that is, where their making would have constituted an infringement if the U. S. copyright law could have been applied), and where their making was ‘lawful.’”).
The current text of § 602(a)(1) was finally enacted into law in 1976. See Copyright Act of 1976, § 602(a), 90 Stat. 2589-2590. The House and Senate Committee Reports on the 1976 Act demonstrate that Congress understood, as did the Copyright Office, just what that text meant. Both Reports state:
“Section 602 [deals] with two separate situations: importation of ‘piratical’ articles (that is, copies or phonorec-ords made without any authorization of the copyright owner), and unauthorized importation of copies or pho-norecords that were lawfully made. The general approach of section 602 is to make unauthorized importation an act of infringement in both cases, but to permit the Bureau of Customs to prohibit importation only of ‘piratical’ articles.” S. Rep. No. 94-473, p. 151 (1975) (emphasis added). See also H. R. Rep. No. 94-1476, p. 169 (1976) (same).
In sum, the legislative history of the Copyright Act of 1976 is hardly “inconclusive.” Ante, at 549. To the contrary, it confirms what the plain text of the Act
IV
Unlike the Court’s holding, my position is consistent with the stance the United States has taken in international-trade negotiations. This ease bears on the highly contentious trade issue of interterritorial exhaustion. The issue arises because intellectual property law is territorial in nature, see supra, at 562, which means that creators of intellectual property “may hold a set of parallel” intellectual property rights under the laws of different nations. Chiappetta, The Desirability of Agreeing To Disagree: The WTO, TRIPS, International IPR Exhaustion and a Few Other Things, 21 Mich. J. Int’l L. 333, 340-341 (2000) (hereinafter Chiappetta). There is no international consensus on whether the sale in one country of a good incorporating protected intellectual property exhausts the intellectual property owner’s right to control the distribution of that good elsewhere. Indeed, the members of the World Trade Organization, “agreeing to disagree,”
In the absence of agreement at the international level, each country has been left to choose for itself the exhaustion framework it will follow. One option is a national-exhaustion regime, under which a copyright owner’s right to control distribution of a particular copy is exhausted only within the country in which the copy is sold. See Forsyth & Rothnie, Parallel Imports, in The Interface Between Intellectual Property Rights and Competition Policy 429, 430 (S. Anderman ed. 2007) (hereinafter Forsyth & Rothnie). Another option is a rule of international exhaustion, under which the authorized distribution of a particular copy anywhere in the world exhausts the copyright owner’s distribution
Strong arguments have been made both in favor of, and in opposition to, international exhaustion. See Chiappetta 360 (“[rjeasonable people making valid points can, and do, reach conflicting conclusions” regarding the desirability of international exhaustion). International exhaustion subjects copyright-protected goods to competition from lower priced imports and, to that extent, benefits consumers. Correspondingly, copyright owners profit from a national-exhaustion regime, which also enlarges the monetary incentive to create new copyrightable works. See Forsyth & Rothnie 432-437 (surveying arguments for and against international exhaustion).
Weighing the competing policy concerns, our Government reached the conclusion that widespread adoption of the international-exhaustion framework would be inconsistent with the long-term economic interests of the United States. See Brief for United States as Amicus Curiae in Quality King, O. T. 1997, No. 96-1470, pp. 22-26 (hereinafter Quality King Brief).
V
I turn now to the Court’s justifications for a decision difficult to reconcile with the Copyright Act’s text and history.
A
The Court asserts that its holding “is consistent with antitrust laws that ordinarily forbid market divisions.” Ante, at 552-553. See also ante, at 539 (again referring to antitrust principles). Section 602(a)(1), however, read as I do and as the Government does, simply facilitates copyright owners’ efforts to impose “vertical restraints” on distributors of copies of their works. See Forsyth & Rothnie 435 (“Parallel importation restrictions enable manufacturers and distributors to erect ‘vertical restraints’ in the market through exclusive distribution agreements.”). See generally Leegin Creative Leather Products, Inc. v. PSKS, Inc.,
The Court sees many “horribles” following from a holding that the § 109(a) phrase “lawfully made under this title” does not encompass foreign-made copies. Ante, at 543 (internal quotation marks omitted). If § 109(a) excluded foreign-made copies, the Court fears, then copyright owners could exercise perpetual control oyer the downstream distribution or public display of such copies. A ruling in Wiley’s favor, the Court asserts, would shutter libraries, put used-book dealers out of business, cripple art museums, and prevent the resale of a wide range of consumer goods, from cars to calculators. Ante, at 540-543. See also ante, at 555 (Kagan, J., concurring) (expressing concern about “imposing downstream liability on those who purchase and resell in the United States copies that happen to have been manufactured abroad”). Copyright law and precedent, however, erect barriers to the anticipated horribles.
1
Recognizing that foreign-made copies fall outside the ambit of § 109(a) would not mean they are forever free of the first sale doctrine. As earlier observed, see supra, at 558, the Court stated that doctrine initially in its 1908 Bobbs-Merrill decision. At that time, no statutory provision expressly codified the first sale doctrine. Instead, copyright law merely provided that copyright owners had “the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending” their works. Copyright Act of 1891, § 1, 26 Stat. 1107.
In Bobbs-Merrill, the Court addressed the scope of the statutory right to “ven[d].” In granting that right, the Court held, Congress did not intend to permit copyright owners “to fasten ... a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it and had given a satisfactory price for it.”
Under the logic of Bobbs-Merrill, the sale of a foreign-manufactured copy in the United States carried out with the copyright owner’s authorization would exhaust the copyright owner’s right to “vend” that copy. The copy could thenceforth be resold, lent out, or otherwise redistributed
For example, if Wiley, rather-than Kirtsaeng, had imported into the United States and then sold the foreign-made textbooks at issue in this case, Wiley’s § 106(3) distribution right would have been exhausted under the rationale of Bobbs-Merrill. Purchasers of the textbooks would thus be free to dispose of the books as they wished without first gaining a license from Wiley.
This line of reasoning, it must be acknowledged, significantly curtails the independent effect of § 109(a). If, as I maintain, the term “distribute” in § 106(3) incorporates the first sale doctrine by virtue of Bobbs-Merrill, then § 109(a)’s codification of that doctrine adds little to the regulatory regime.
In any event, the reading of the Copyright Act to which I subscribe honors Congress’ aim in enacting § 109(a) while the Court’s reading of the Act severely diminishes §602(a)(l)’s role. See supra, at 566-568. My position in no way tugs against the principle underlying § 109(a)—i. e., that certain conduct by the copyright owner exhausts the owner’s § 106(3) distribution right. The Court, in contrast, fails to give meaningful effect to Congress’ manifest intent in § 602(a)(1) to grant copyright owners the right to control the importation of foreign-made copies of their works.
2
Other statutory prescriptions provide further protection against the absurd consequences imagined by the Court. For example, § 602(a)(3)(C).- permits “an organization operated for scholarly, educational, or religious purposes” to import, without the copyright owner’s authorization, up to five foreign-made copies of a nonaudiovisual work—notably, a book—for “library lending or archival purposes.” But cf. ante, at 541 (suggesting that affirming the Second Circuit’s decision might prevent libraries from lending foreign-made books).
The Court also notes that amici representing art museums fear that a ruling in Wiley’s favor would prevent museums from displaying works of art created abroad. Ante, at 543 (citing Brief for Association of Art Museum Directors et al.). These amici observe that a museum’s right to display works of art often depends on 17 U. S. C. § 109(c). See Brief for Association of Art Museum Directors et al. 11-13.
The Court worries about the resale of foreign-made consumer goods “contain[ing] copyrightable software programs or packaging.” Ante, at 542. For example, the Court observes that a car might be programmed with diverse forms of software, the copyrights to which might be owned by individuals or entities other than the manufacturer of the car. Ibid. Must a car owner, the Court asks, obtain permission from all of these various copyright owners before reselling her car? Ibid. Although this question strays far from the one presented in this case and briefed by the parties, principles of fair use and implied license (to the extent that express licenses do not exist) would likely permit the car to be resold without the copyright owners’ authorization.
Most telling in this regard, no court, it appears, has been called upon to answer any of the Court’s “horribles” in an actual case. Three decades have passed since a federal court first published an opinion reading § 109(a) as applicable exclusively to copies made in the United States. See Columbia Broadcasting System, Inc. v. Scorpio Music Distributors, Inc.,
The Court provides a different explanation for the absence of the untoward consequences predicted in its opinion— namely, that lower court decisions regarding the scope of § 109(a)’s first sale prescription have not been uniform. Ante, at 544. Uncertainty generated by these conflicting decisions, the Court notes, may have deterred some copyright owners from pressing infringement claims. Ante, at 544-545. But if, as the Court suggests, there are a multitude of copyright owners champing at the bit to bring lawsuits against libraries, art museums, and consumers in an effort to exercise perpetual control over the downstream distribution and public display of foreign-made copies, might one not expect that at least a handful of such lawsuits would have been filed over the past 30 years? The absence of such suits indicates that the “practical problems” hypothesized by the Court are greatly exaggerated. Ante, at 545.
VI
To recapitulate, the objective of statutory interpretation is “to give effect to the intent of Congress.” American Trucking Assns.,
Rather than adopting the very international-exhaustion rule the United States has consistently resisted in international-trade negotiations, I would adhere to the national-exhaustion framework set by the Copyright Act’s text and history. Under that regime, codified in § 602(a)(1), Kirtsaeng’s unauthorized importation of the foreign-made textbooks involved in this ease infringed Wiley’s copyrights. I would therefore affirm the Second Circuit’s judgment.
In 2008, Congress renumbered what was previously § 602(a) as § 602(a)(1). See Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PROIPA), § 105(b)(2), 122 Stat. 4259. Like the Court, I refer to the provision by its current numbering.
Although Justice Kagan’s concurrence suggests that Quality King erred in “holding that § 109(a) limits § 602(a)(1),” ante, at 555, that recent, unanimous holding must be taken as a given. See John R. Sand & Gravel Co. v. United States,
See Quality King Distributors, Inc. v. L’anza Research Int'l, Inc.,
The Court asserts that my position gives the word “lawfully” in § 109(a) “little, if any, linguistic work to do.” Ante, at 530-531. That is not so. My reading gives meaning to each word in the phrase “lawfully made under this title.” The word “made” signifies that the conduct at issue is the creation or manufacture of a copy. See Webster’s Third New International Dictionary 1356 (1961) (defining “made” as “artificially produced by a manufacturing process”). The word “lawfully” indicates that for § 109(a) to apply, the copy’s creation must have complied with some body of law. Finally, the prepositional phrase “under this title” clarifies what that body of law is—namely, the copyright prescriptions contained in Title 17 of the U. S. Code.
Attempting to show that my reading of § 109(a) is susceptible to the same criticism, the Court points to the now-repealed “manufacturing clause,” which required “copies of a work consisting preponderantly of nondramatic literary material... in the English language” to be “manufactured in the United States or Canada.” Copyright Act of 1976, § 601(a), 90 Stat. 2588. Because Congress expressly referred to manufacturing in this provision, the Court contends, the phrase “lawfully made under this title” in § 109(a) cannot mean “manufactured in the United States.” Ante, at 540. This argument is a non sequitur. I do not contend that the phrases “lawfully made under this title” and “manufactured in the United States” are interchangeable. To repeat, I read the phrase “lawfully made under this title” as referring to instances in which a copy’s creation is governed by, and conducted in compliance with, Title 17 of the U. S. Code. See supra, at 561. Not all copies “manufactured in the United States” will satisfy this standard. For example, piratical copies manufactured in the United States without the copyright owner’s authorization are not “lawfully made under [Title 17].” Nor would the phrase “lawfully manufactured in the United States” be ah exact substitute for “lawfully made under this title.” The making of a copy may be lawful under Title 17 yet still violate some other provision of law. Consider, for example, a copy made with the copyright owner’s authorization by workers who are paid less than minimum wage. The copy would be “lawfully made under [Title 17]” in the sense that its creation would not violate any provision of that title, but the copy’s manufacturing would nonetheless be unlawful due to the violation of the minimum-wage laws.
When § 602(a)(1) was originally enacted in 1976, it played an additional role—providing a private cause of action against importers of piratical goods. See Quality King,
Notably, the Court ignores the history of § 602(a)(1), which reveals that the primary purpose of the prescription was not to provide a remedy against rogue licensees, consignees, and bailees, against whom copyright owners could frequently assert breach-of-contract claims even in the absence of § 602(a)(1). Instead, the primary purpose of § 602(a)(1) was to reach third-party importers, enterprising actors like Kirtsaeng, against whom copyright owners could not assert contract claims due to lack of privity. See Part III, infra.
Section 602(a)(3) provides:
“This subsection [i. e., § 602(a)] does not apply to—
“(A) importation or exportation of copies or phonoreeords under the authority or for the use of the Government of the United States or of any State or political subdivision of a State, but not including copies or phonoreeords for use in schools, or copies of any audiovisual work imported for purposes other than archival use;
“(B) importation or exportation, for the private use of the importer or exporter and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time, or by any person arriving from outside the United States or departing from the United States with respect to copies or phonoreeords forming part of such person’s personal baggage; or
“(C) importation by or for an organization operated for scholarly, educational, or religious purposes and not for private gain, with respect to no more than one copy of an audiovisual work solely for its archival purposes, and no more than five copies or phonorecords of any other work for its library lending or archival purposes, unless the importation of such copies or phonorecords is part of an activity consisting of systematic reproduction or distribution, engaged in by such organization in violation of the provisions of section 108(g)(2).”
The term “gray market good” refers to a good that is “imported outside the distribution channels that have been contractually negotiated by the intellectual property owner.” Forsyth & Rothnie, Parallel Imports, in The Interface Between Intellectual Property Rights and Competition Policy 429 (S. Anderman ed. 2007). Such goods are also commonly called “parallel imports.” Ibid.
The Court asserts that its reading of § 109(a) is bolstered by §104, which extends the copyright “protection[s]” of Title 17 to a wide variety of foreign works. See ante, at 532. The “protection under this title” afforded by § 104, however, is merely protection against infringing conduct within the United States, the only place where Title 17 applies. See 4 W. Patry, Copyright §13:44.10, pp. 13-128 to 13-129 (2012) (hereinafter Patry). Thus, my reading of the phrase “under this title” in § 109(a) is consistent with Congress’ use of that phrase in § 104. Furthermore, § 104 describes which works are entitled to copyright protection under U. S. law. But no one disputes that Wiley’s copyrights in the works at issue in this case are valid. The only question is whether Kirtsaeng’s importation of copies of those works infringed Wiley’s copyrights. It is basic to copyright law that “[o]wnership of a copyright... is distinct from ownership of any material object in which the work is embodied.” 17 U. S. C. § 202. See also § 101 (‘“Copies’ are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”). Given the distinction copyright law draws between works and copies, § 104 is inappo-site to the question here presented. 4 Patry § 13:44.10, at 13-129 (“There is no connection, linguistically or substantively, between Seetion[s] 104 and 109: Section 104 deals with national eligibility for the intangible work of authorship; Section 109(a) deals with the tangible, physical embodiment of the work, the ‘copy.’ ”).
As the Court observes, ante, at 549-550, Irwin Karp of the Authors League of America stated at the 1964 panel discussion that § 44(a) ran counter to “the very basic concept of copyright law that, once you’ve sold a copy legally, you can’t restrict its resale.” Copyright Law Revision Part 4, at 212. When asked if he was “presenting ... an argument against” § 44(a), however, Karp responded that he was “neutral on th[e] provision.” Id,., at 211. There is thus little reason to believe that any changes to the wording of § 44(a) before its codification in § 602(a) were made in response to Karp’s discussion of “the problem of restricting [the] transfer of.... lawfully obtained [foreign] copies.” Ibid.
There is but one difference between this language from the 1965 bill and the corresponding language in the current version of § 602(a)(1): In the current version, the phrase “for the purpose of distribution to the public” is omitted and the phrase “that have been acquired outside the United States” appears in its stead. There are no material differences between the quoted language from the 1965 bill and the corresponding language contained in the 1964 bill. See Copyright Law Revision Part 6: Supplementary Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law: 1965 Revision Bill, 89th Cong., 1st Sess., 292-293 (H. R. Judiciary Comm. Print 1965).
The Court purports to find support for its position in the House and Senate Committee Reports on the 1976 Copyright Act. Ante, at 550-551. It fails to come up with anything in the Act’s legislative history, however, showing that Congress understood the words “lawfully made under this title” in § 109(a) to encompass foreign-made copies.
Chiappetta, The Desirability of Agreeing To Disagree: The WTO, TRIPS, International IPR Exhaustion and a Few Other Things, 21 Mich. J. Int’l L. 333, 340 (2000) (hereinafter Chiappetta) (internal quotation marks omitted).
The Court states that my “reliance on the Solicitor General’s position in Quality King is undermined by his agreement in that case with [the] reading of § 109(a)” that the Court today adopts. Ante, at 553. The United States’ principal concern in both Quality King and this case, however, has been to protect copyright owners’ “right to prevent parallel imports.” Brief for United States as Amicus Curiae in Quality King, O. T. 1997, No. 96-1470, p. 6 (hereinafter Quality King Brief). See also Brief for United States as Amicus Curiae 14 (arguing that Kirtsaeng’s interpretation of § 109(a), which the Court adopts, would “subver[t] Section 602(a)(l)’s ban on unauthorized importation”). In Quality King, the Solicitor General urged this Court to hold that § 109(a)’s codification of the first sale doctrine does not limit the right to control importation set forth in § 602(a). Quality King Brief 7-30. After Quality King rejected that contention, the United States reconsidered its position, and it now endorses the interpretation of the § 109(a) phrase “lawfully made under this title” I would adopt. Brief for United States as Amicus Curiae 6-7, 13-14.
Congress hardly lacks capacity to provide for international exhaustion when that is its intent. Indeed, Congress has expressly provided for international exhaustion in the narrow context of semiconductor chips embodying protected “mask works.” See 17 U. S. C. §§905(2), 906(b). See also 2 M. Nimmer & D. Nimmer, Copyright §8A.06[E], p. 8A-37 (2012) (hereinafter Nimmer) (“[T]he first sale doctrine under [§ 906(b)] expressly immunizes unauthorized importation.”).
Despite the Court’s suggestion to the contrary, this case in no way implicates the per se antitrust prohibition against horizontal ‘“[a]gree-ments between competitors to allocate territories to minimize competition.’” Ante, at 553 (quoting Palmer v. BRG of Ga., Inc.,
As the Court observes, ante, at 553, the United States stated at oral argument that the tyfSes of “horribles” predicted in the Court’s opinion would, if they came to pass, be “worse than the frustration of market segmentation” that will result from the Court’s interpretation of § 109(a). Tr. of Oral Arg. 51. The United States, however, recognized that this purported dilemma is a false one. As the United States explained, the Court’s horribles can be avoided while still giving meaningful effect to § 602(a)(l)’s ban on unauthorized importation. Ibid.
It appears that the Copyright Act of 1976 omitted the word “vend” and introduced the word “distribute” to avoid the “redundan[cy]” present in pre-1976 law. Copyright Law Revision: Report of the Register of Copyrights on the General Revision of the U. S'. Copyright Law, 87th Cong., 1st Sess., 21 (H. R. Judiciary Comm. Print' 1961) (noting that the exclusive rights to “publish” and “vend” works under the Copyright Act of 1947, § 1(a), 61 Stat. 652-653, were “redundant”).'
My position that Bobbs-Merrill lives on as a limiting construction of the § 106(3) distribution right does not leave § 109(a) with no work to do. There can be little doubt that the books at issue in Bobbs-Merrill were published and first sold in the United States. See Bobbs-Merrill Co. v. Straus,
Section 41 of the 1909 Act provided: “[N]othing in this Act shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained.” 35 Stat. 1084. This language was repeated without material change in §27 of the Copyright Act of 1947, 61 Stat. 660. As noted above, see supra, at 558, 17 U. S. C. § 109(a) sets out the current codification of the first sale doctrine.
A group of amici representing libraries expresses the concern that lower courts might interpret § 602(a)(3)(C) as authorizing only the importing, but not the lending, of foreign-made copies of nonaudiovisual works. See Brief for American Library Association et al. 20. The United States maintains, and I agree, however, that § 602(a)(3)(C) “is fairly (and best) read as implicitly authorizing lending, in addition to importation, of all works other than audiovisual works.” Brief for United States as Amicus Curiae 30, n. 6.
Title 17 U. S. C. § 109(c) provides: “Notwithstanding the provisions of section 106(5), the owner of a particular copy lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located.”
The word “copy,” as it appears in § 109(c), applies to the original of a work of art because the Copyright Act defines the term “copies” to “in-clud[e] the material object... in which the work is first fixed.” § 101.
Principles of fair use and implied license may also allow a U. S. tourist “who buys a copyrighted work of art, a poster, or ... a bumper sticker” abroad to publicly “display it in America without the copyright owner’s further authorization.” Ante, at 537. (The tourist could lawfully bring the work of art, poster, or bumper sticker into the United States under 17 U. S. C. § 602(a)(3)(B), which provides that § 602(a)(l)’s importation ban does not apply to “importation ... by any person arriving from outside the United States . . . with respect to copies . . . forming part of such person’s personal baggage.”) Furthermore, an individual clearly would not incur liability for infringement merely by displaying a foreign-made poster or other artwork in her home. See § 106(5) (granting the owners of copyrights in “literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works” the exclusive right “to display the copyrighted work publicly” (emphasis added)). See also § 101 (a work is displayed “publicly” if it is displayed “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered” (emphasis added)). Cf. 2 Nimmer §8.14[C][1], at 8-192.2(1) (“[A] performance limited to members of the family and invited guests is not a public performance.” (footnote omitted)).
Exerting extensive control over secondary markets may not always be in a manufacturer’s best interest. Carmakers, for example, often trumpet the resale value of their vehicles. See, e. g., Nolan, UD Grad Leads Cadillac Marketing, Dayton Daily News, Apr. 2, 2009, p. A8 (“Cadillac plays up its warranty coverage and reliable resale value to prospective customers.”). If the transaction costs of reselling vehicles were to rise, consumers’ perception of a new ear’s value, and thus the price they are willing to pay for such a car, might fall—an outcome hardly favorable to automobile manufacturers.
It should not be overlooked that the ability to prevent importation of foreign-made copies encourages copyright owners such as Wiley to offer copies of their works at reduced prices to consumers in less developed countries who might otherwise be unable to afford them. The Court’s holding, however, prevents copyright owners from barring the importation of such low-priced copies into the United States, where they will compete with the higher priced editions copyright owners make available for sale in this country. To protect their profit margins in the U. S. market, copyright owners may raise prices in less developed countries or may withdraw from such markets altogether. See Brief for United States as Amicus Curiae 26; Brief for Text and Academic Authors Association as Amicus Curiae 12; Brief for Association of American Publishers as Amicus Curiae 37. See also Chiappetta 357-358 (a rule of national exhaustion “encourages entry and participation in developing markets at lower, locally more affordable prices by eliminating them as risky sources of cheaper parallel imports back into premium markets”). Such an outcome would disserve consumers—and especially students—in developing nations and would hardly advance the “American foreign policy goals” of supporting education and economic development in such countries. Quality King Brief 25-26.