Messrs. W. H. H. Miller, C. C. Shirley, and Samuel D. Miller for appellant.

Messrs. John G. Carlisle and Edmond E. Wise for appellees.

Mr. Stephen H. Olin on behalf of Charles Scribner's Sons.

Mr. Justice Day delivered the opinion of the court:

The complainant in the circuit court, appellant here, the Bobbs-Merrill Company, brought suit against the respondents, appellees here, Isidor Straus and Nathan Straus, partners as R. H. Macy & Company, in the circuit court of the United States for the southern district of New York, to restrain the sale of a copyrighted novel, entitled 'The Castaway,' at retail at less than $1 for each copy. The ciruit court dismissed the bill on final hearing. 139 Fed. 155. The decree of the circuit court was affirmed on appeal by the circuit court of appeals, 77 C. C. A. 607, 147 Fed. 15.

The appellant is the owner of the copyright upon 'The Castaway,' obtained on the 18th day of May, 1904, in conformity to the copyright statutes of the United States. Printed immediately below the copyright notice, on the page in the book following the title page, is inserted the following notice:

The price of this book at retail is $1 net. No dealer is licensed to sell it at a less price, and a sale at a less price will be treated as an infringement of the copyright.

The Bobbs-Merrill Company.

Macy & Company, before the commencement of the action, purchased copies of the book for the purpose of selling the same at retail. Ninety per cent of such copies were purchased by them at wholesale at a price below the retail price by about [342] 40 per cent, and 10 per cent of the books purchased by them were purchased at retail, and the full price paid therefor.

It is stipulated in the record:

Defendants, at the time of their purehase of copies of the book, knew that it was a copyrighted book, and were familiar with the terms of the notice printed in each copy thereof, as above set forth, and knew that this notice was printed in every copy of the book purchased by them.

The wholesale dealers, from whom defendants purchased copies of the book, obtained the same either directly from the complainant or from other wholesale dealers at a discount from the net retail price, and, at the time of their purchase, knew that the book was a copyrighted book, and were familiar with the terms of the notice printed in each copy thereof, as described above, and such knowledge was in all wholesale dealers through whom the books passed from the complainants to defendants. But the wholesale dealers were under no agreement or obligation to enforce the observance of the terms of the notice by retail dealers, or to restrict their sales to retail dealers who would agree to observe the terms stated in the notice.

The defendants have sold copies of the book at retail at the uniform price of 89 cents a copy, and are still selling, exposing for sale, and offering copies of the book at retail at the price of 89 cents per copy, without the consent of the complainant.

Much of the argument on behalf of the appellant is based upon the alleged analogy between the statutes of the United States securing patent rights to inventors, and the copyright acts, securing rights and privileges to authors and others. And this analogy, it is contended, is so complete that decisions under the patent statutes in respect to the rights claimed in this suit under the copyright act are necessarily controlling.

In the main brief submitted by the learned counsel for the appellant it is said:

'All of the argument has been upon the assumption that [343] the very numerous decisions of the circuit courts and circuit courts of appeals, such as the Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co. 35 L.R.A. 728, 25 C. C. A. 267, 47 U. S. App. 146, 77 Fed. 288, the Victor Talking Mach. Co. v. The Fair, 61 C. C. A. 58, 123 Fed. 424, and others along the same line, as well as the Cotton Tie Case in this court, upholding this restriction, with reference to sales of patented articles, express the law; and we have been especially confident that such must be the case, for the reason that this court, in E. Bement & Sons v. National Harrow Co. 186 U. S. page 70, 46 L. ed. 1058, 22 Sup. Ct. Rep. 747, has given its sanction to the broad doctrines laid down in the Heaton-Peninsular Case, supra.

The present case involves rights under the copyright act. The facts disclose a sale of a book at wholesale by the owners of the copyright, at a satisfactory price, and this without agreement between the parties to such sale obligating the purchaser to control future sales, and where the alleged right springs from the protection of the copyright law alone. It is contended that this power to control further sales is given by statute to the owner of such a copyright in conferring the sole right to 'vend' a copyrighted book.

A case such as the present one, concerning inventions protected by letters patent of the United States, has not been decided in this court, so far as we are able to discover. In the so-called 'Cotton Tie Case' (American Cotton Tie Co. v. Simmons, 106 U. S. 89, 27 L. ed. 79, 1 Sup. Ct. Rep. 52), the complainant company owned patents for improvements in metallic cotton-bale ties, and these cotton-bale ties were manufactured by the patentee, and stamped in the buckles were the words: 'Licensed to use once only.' After the bands had been severed at the cotton mill, the respondent bought them and the buckles as scrap iron, rolled and straightened the pieces of the bands, and riveted their ends together. He then cut them into proper lengths and sold them, with the buckles, to be used as ties.

The report of this case in the circuit court for the district of Rhode Island is found in 3 Bann. & Ard. 320, Fed. Cas. No. 293. The report shows that Judge [344] Shepley dismissed the bill on the ground that the attempted restriction to a single use by the words stamped on the buckle was not one which the patentee was entitled to impose, as the sale of the patented article, as an ordinary article of commerce, had taken it outside of the limits of the patent monopoly, and that the purchaser took unrestricted title to the buckle, without any reservation in the vendor. This court reversed that decision, holding that the reconstructed ties were not a repair of the old article, but a recreation of the subject of the patent, and, therefore, an infringement. Mr. Justice Blatchford, in delivering the opinion of the court, said:

'Whatever right the defendants could acquire to the use of the old buckle, they acquired no right to combine it with a substantially new band, to make a cotton-bale tie. They so combined it when they combined it with a band made of the pieces of the old band in the way described. What the defendants did in piecing together the pieces of the old band was not a repair of the band or the tie, in any proper sense. The band was voluntarily severed by the consumer at the cotton mill, because the tie had performed its function of confining the bale of cotton in its transit from the plantation or the press to the mill. Its capacity for use as a tie was voluntarily destroyed. As it left the bale it could not be used again as a tie. As a tie the defendants reconstructed it, although they used the old buckle without repairing that.'

That the case was not decided as one of restricted license, because of the words stamped on the buckle, is shown by the language of Mr. Justice Blatchford, in concluding his opinion:

'We do not decide that they are liable as infringers of either of the three patents, merely because they have sold the buckle considered apart from the band or from the entire structure as a tie.'

We cannot agree that any different view of the Cotton Tie Case was indicated in the comments of the learned justice, speaking for this court, in Morgan Envelope Co. v. Albany Perforated Wrapping Paper Co. 152 U. S. 425, 433, 38 L. ed. 500, 503, 14 Sup. Ct. Rep. 627. What was there said in connection [345] with the quotation from the opinion of Mr. Justice Blatchford in the Cotton Tie Case enforces the view that the case was one of infringement because of the reconstruction of the patented device.

In E. Bement & Sons v. National Harrow Co. supra, the suit was between the owners of the letters patent as licensor and licensees, seeking to enforce a contract as to the price and terms on which the patented article might be dealt with by the licensee. The case did not involve facts such as in the case now before us, and concerned a contract of license sued upon in the state court, and, of course, does not dispose of the questions to be decided in this case.

The question was supposed to be involved in the recent case of Cortelyou v. Johnson, 207 U. S. 196, ante, 105, 28 Sup. Ct. Rep. 105, where a patented machine, known as the Neostyle, was sold with a license, printed on the baseboard of the machine, limiting the use thereof to certain paper, ink, and other supplies, made by the Neostyle company. While the question as to the validity of such license restriction was fully and ably argued by counsel, the case went off upon the finding that notice of the license restriction was not brought home to the defendant company.

If we were to follow the course taken in the argument, and discuss the rights of a patentee, under letters patent, and then, by analogy, apply the conclusions to copyrights, we might greatly embarrass the consideration of a case under letters patent, when one of that character shall be presented to this court.

We may say in passing, disclaiming any intention to indicate our views as to what would be the rights of parties in circumstances similar to the present case under the patent laws, that there are differences between the patent and copyright statutes in the extent of the protection granted by them. This was recognized by Judge Lurton, who wrote a leading case on the subject in the Federal courts (Button Fastener Case, supra), for he said in the subsequent case of John D. Park & Sons Co. v. Hartman, 12 L.R.A.(N.S.) 135, 82 C. C. A. 158, 153 Fed. 24:

[346] 'There are such wide differences between the right of multiplying and vending copies of a production protected by the copyright statute and the rights secured to an inventor under the patent statutes, that the cases which relate to the one subject are not altogether controlling as to the other.'

We therefore approach the consideration of this question as a new one in this court, and one that involves the extent of the protection which is given by the copyright statutes of the United States to the owner of a copyright under the facts disclosed in this record. Recent cases in this court have affirmed the proposition that copyright property under the Federal law is wholly statutory, and depends upon the right created under the acts of Congress passed in pursuance of the authority conferred under article 1, 8, of the Federal Constitution: 'To promote the progress of science and useful arts, by securing, for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries.' American Tobacco Co. v. Werckmeister, 207 U. S. 284, ante, 72, 28 Sup. Ct. Rep. 72; White-Smith Music Pub. Co. v. Apollo Co. 209 U. S. 1, ante, 319, 28 Sup. Ct. Rep. 319; following the previous cases of Wheaton v. Peters, 8 Pet. 591, 8 L. ed. 1055; Banks v. Manchester, 128 U. S. 244-253, 32 L. ed. 425-429, 9 Sup. Ct. Rep. 36; Thompson v. Hubbard, 131 U. S. 123-151, 33 L. ed. 76-86, 9 Sup. Ct. Rep. 710.

The learned counsel for the appellant in this case, in the argument at bar, disclaims relief because of any contract, and relies solely upon the copyright statutes, and rights therein conferred. The copyright statutes ought to be reasonably construed, with a view to effecting the purposes intended by Congress. They ought not to be unduly extended by judicial construction to include privileges not intended to be conferred, nor so narrowly construed as to deprive those entitled to their benefit of the rights Congress intended to grant.

At common law an author had a property in his manuscript, and might have redress against anyone who undertook to realize a profit from its publication without authority of the author. Wheaton v. Peters, 8 Pet. 591-659, 8 L. ed. 1055-1080.

In Drone on Copyright, that author says, page 100:

'As the law is now expounded, there are important differences [347] between the statutory and the common-law light. The former exists only in works which have been published within the meaning of the statute, and the latter only in works which have not been so published. In the former case, ownership is limited to a term of years; in the latter, it is perpetual. The rights do not co-exist in the same composition; when the statutory right beings the common-law right ends. Both may be defeated by publication. Thus, when a work is published in print, the owner's common-law rights are lost; and, unless the publication be in accordance with the requirements of the statute, the statutory right is not secured.'

While the nature of the property and the protection intended to be given the inventor or author as the reward of genius or intellect in the production of his book or work of art is to be considered in construing the act of Congress, it is evident that to secure the author the right to multiply copies of his work may be said to have been the main purpose of the copyright statutes. Speaking for this court in Stephens v. Cady, 14 How. 528, 530, 14 L. ed. 528, 529, Mr. Justice Nelson said:

'The copyright is an exclusive right to the multiplication of the copies, for the benefit of the author or his assigns, disconnected from the plate, or any other physical existence. It is an incorporeal right to print and publish the map; or, as said by Lord Mansfield in Millar v. Taylor, 4 Burr. 2396, 'a propeety in notion, and has no corporeal, tangible substance."

This fact is emphasized when we note the title to the act of Congress, passed at its first session,'An Act for the Encouragement of Learning, by Securing the Copies of Maps, Charts, and Books, to the Authors and Proprietors of Such Copies, during the Times Therein Mentioned.' 1 Stat. at L. by Peters, chap. 15, p. 124.

In order to secure this right it was provided in that statute, as it has been in subsequent ones, that the authors of books, their executors, administrators, or assigns, shall have the 'sole right and liberty of printing, reprinting, publishing, and vending' such book for a term of years, upon complying with the [348] statutory conditions set forth in the act as essential to the acquiring of a valid copyright. Each and all of these statutory rights should be given such protection as the act of Congress requires, in order to secure the rights conferred upon authors and others entitled to the benefit of the act. Let us see more specifically what are the statutory rights, in this behalf, secured to one who has complied with the provisions of the law and become the owner of a copyright. They may be found in 4952, 4965, and 4970 of the Revised Statutes of the United States, and are as follows:

'Sec. 4952. Any citizen of the United States or resident therein, who shall be the author, inventor, designer, or proprietor of any book, map, chart, dramatic or musical composition, engraving, cut, print, or photograph or negative thereof, or of a painting, drawing, chromo, statute, statuary, and of models or designs intended to be perfected as works of the fine arts, and the executors, administrators, or assigns of any such person, shall, upon complying with the provisions of this chapter, have the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending the same.' U. S. Comp. Stat. 1901, p. 3406.

'Sec. 4965. If any person, after the recording of the title of any map, chart, musical composition, print, cut, engraving, or photograph, or chromo, or of the description of any painting, drawing, statue, statuary, or model or design intended to be perfected and executed as a work of the fine arts, as provided by this chapter, shall, within the term limited, and without the consent of the proprietor of the copyright first obtained in writing, signed in presence of two or more witnesses, engrave, etch, work, copy, print, publish, or import, either in whole or in part, or by varying the main design with intent to evade the law, or, knowing the same to be so printed, published, or imported, shall sell or expose to sale any copy of such map or other article, as aforesaid, he shall forfeit to the proprietor all the plates on which the same shall be copied, and every sheet thereof, either copied or printed, and shall further forfeit [349] one dollar for every sheet of the same found in his possession, either printing, printed, copied, published, imported, or exposed for sale; and in case of a painting, statute, or statuary, he shall forfeit ten dollars for every copy of the same in his possession, or by him sold or exposed for sale, one half thereof to the proprietor and the other half to the use of the United States.' U. S. Comp. Stat. 1901, p. 3414.

Section 4970 is as follows:

'The circuit courts, and district courts having the jurisdiction of circuit courts, shall have power, upon bill in equity filed by any party aggrieved, to grant injunctions to prevent the violation of any right secured by the laws respecting copyrights, according to the course and principles of courts of equity, on such terms as the court may deem reasonable.' U. S. Comp. Stat. 1901, p. 3416.

Section 4965 undertakes to work a forfeiture of copyrighted articles, and confers a right of action for a penalty. Relief is given in a single suit, one half of the money recovered going to the United States. Werckmeister v. American Tobacco Co. 207 U. S. 375, ante, 124, 28 Sup. Ct. Rep. 124.

As this is a suit in equity for relief under 4970 of the U. S. Revised Statutes, giving to the circuit and district courts of the United States the right to grant relief by injunctions to prevent the violation of rights secured by the copyright statutes, we are not concerned with rights and remedies under 4965.

It is the contention of the appellant that the circuit court erred in failing to give effect to the provision of 4952, protecting the owners of the copyright in the sole right of vending the copyrighted book or other article, and the argument is that the statute vested the whole field of the right of exclusive sale in the copyright owner; that he can part with it to another to the extent that he sees fit, and may withhold to himself, by proper reservations, so much of the right as he pleases.

What does the statute mean in granting 'the sole right of vending the same?' Was it intended to create a right which would permit the holder of the copyright to fasten, by notice [350] in a book or upon one of the articles mentioned within the statute, 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? It is not denied that one who has sold a copyrighted article, without restriction, has parted with all right to control the sale of it. The purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.

In this case the stipulated facts show that the books sold by the appellant were sold at wholesale, and purchased by those who made no agreement as to the control of future sales of the book, and took upon themselves no obligation to enforce the notice printed in the book, undertaking to restrict retail sales to a price of $1 per copy.

The precise question, therefore, in this case is, Does the sole right to vend (named in 4952) secure to the owner of the copyright the right, after a sale of the book to a purchaser, to restrict future sales of the book at retail, to the right to sell it at a certain price per copy, because of a notice in the book that a sale at a different price will be treated as an infringement, which notice has been brought home to one undertaking to sell for less than the named sum? We do not think the statute can be given such a construction, and it is to be remembered that this is purely a question of statutory construction. There is no claim in this case of contract limitation, nor license agreement controlling the subsequent sales of the book.

In our view the copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchasers, with whom there is no privity of contract. This conclusion is reached in view of the language of the statute, read in the light of its main purpose [351] to secure the right of multiplying copies of the work,a right which is the special creation of the statute. True, the statute also secures, to make this right of multiplication effectual, the sole right to vend copies of the book, the production of the author's thought and conception. The owner of the copyright in this case did sell copies of the book in quantities and at a price satisfactory to it. It has exercised the right to vend. What the complainant contends for embraces not only the right to sell the copies, but to qualify the title of a future purchaser by the reservation of the right to have the remedies of the statute against an infringer because of the printed notice of its purpose so to do unless the purchaser sells at a price fixed in the notice. To add to the right of exclusive sale the authority to control all future retail sales, by a notice that such sales must be made at a fixed sum, would give a right not included in the terms of the statute, and, in our view, extend its operation, by construction, beyond its meaning, when interpreted with a view to ascertaining the legislative intent in its enactment.

This conclusion renders it unnecessary to discuss other questions noticed in the opinion in the circuit court of appeals, or to examine into the validity of the publisher's agreements, alleged to be in violation of the acts to restrain combinations creating a monopoly or directly tending to the restraint of trade.

The decree of the Circuit Court of Appeals is affirmed.

523 U.S. 135
118 S.Ct. 1125
140 L.Ed.2d 254

QUALITY KING DISTRIBUTORS, INC., Petitioner,
v.
L'ANZA RESEARCH INTERNATIONAL, INC.

No. 96-1470.
Supreme Court of the United States
Argued Dec. 8, 1997.
Decided March 9, 1998
Syllabus^[*]

Respondent L'anza, a California manufacturer, sells its hair care products in this country exclusively to distributors who have agreed to resell within limited geographic areas and only to authorized retailers. L'anza promotes its domestic sales with extensive advertising and special retailer training. In foreign markets, however, it does not engage in comparable advertising or promotion; its foreign prices are substantially lower than its domestic prices. It appears that after L'anza's United Kingdom distributor arranged for the sale of several tons of L'anza products, affixed with copyrighted labels, to a distributor in Malta, that distributor sold the goods to petitioner, which imported them back into this country without L'anza's permission and then resold them at discounted prices to unauthorized retailers. L'anza filed suit, alleging that petitioner's actions violated L'anza's exclusive rights under the Copyright Act of 1976(Act), 17 U.S.C. §§106, 501, and 602, to reproduce and distribute the copyrighted material in the United States. The District Court rejected petitioner's "first sale'' defense under §109(a) and entered summary judgment for L'anza. Concluding that §602(a), which gives copyright owners the right to prohibit the unauthorized importation of copies, would be "meaningless'' if §109(a) provided a defense, the Ninth Circuit affirmed.

Held: The first sale doctrine endorsed in §109(a) is applicable to imported copies. Pp. ____-____.

(a) In Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 349-350, 28 S.Ct. 722, 725-26, 52 L.Ed. 1086, this Court held that the exclusive right to "vend'' under the copyright statute then in force applied only to the first sale of a copyrighted work. Congress subsequently codified Bobbs-Merrill's first sale doctrine in the Act. Section 106(3) gives the copyright holder the exclusive right "to distribute copies . . . by sale or other transfer of ownership,'' but §109(a) provides: "Notwithstanding . . . [§]106(3), the owner of a particular copy . . . 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 . . . .'' Although the first sale doctrine prevents L'anza from treating unauthorized resales by its domestic distributors as an infringement of the exclusive right to distribute, L'anza claims that §602(a), properly construed, prohibits its foreign distributors from reselling its products to American vendors unable to buy from its domestic distributors. Pp. ____-____.

(b) The statutory language clearly demonstrates that the right granted by §602(a) is subject to §109(a). Significantly, §602(a) does not categorically prohibit the unauthorized importation of copyrighted materials, but provides that, with three exceptions, such " [i]mportation . . . is an infringement of the exclusive right to distribute . . . under [§]106 . . . . '' Section 106 in turn expressly states that all of the exclusive rights therein granted-including the distribution right granted by subsection (3)-are limited by §§107 through 120. One of those limitations is provided by §109(a), which expressly permits the owner of a lawfully made copy to sell that copy " [n]otwithstanding the provisions of [§]106(3).'' After the first sale of a copyrighted item "lawfully made under this title,'' any subsequent purchaser, whether from a domestic or a foreign reseller, is obviously an "owner'' of that item. Read literally, §109(a) unambiguously states that such an owner "is entitled, without the authority of the copyright owner, to sell'' that item. Moreover, since §602(a) merely provides that unauthorized importation is an infringement of an exclusive right "under [§]106,'' and since that limited right does not encompass resales by lawful owners, §602(a)'s literal text is simply inapplicable to both domestic and foreign owners of L'anza's products who decide to import and resell them here. Pp. ____-____.

(c) The Court rejects L'anza's argument that §602(a), and particularly its exceptions, are superfluous if limited by the first sale doctrine. The short answer is that this argument does not adequately explain why the words "under [§]106'' appear in §602(a). Moreover, there are several flaws in L'anza's reasoning that, because §602(b) already prohibits the importation of unauthorized or "piratical'' copies, §602(a) must cover nonpiratical ("lawfully made'') copies sold by the copyright owner. First, even if §602(a) applied only to piratical copies, it at least would provide a private remedy against the importer, whereas §602(b)'s enforcement is vested in the Customs Service. Second, because §109(a)'s protection is available only to the "owner'' of a lawfully made copy, the first sale doctrine would not provide a defense to a §602(a) action against a non-owner such as a bailee. Third, §602(a) applies to a category of copies that are neither piratical nor "lawfully made under this title'': those that are "lawfully made'' under another country's law. Pp. ____-____.

(d) Also rejected is L'anza's argument that because §501(a) defines an "infringer'' as one "who violates . . . [§]106 . . . , or who imports . . . in violation of [§]602,'' a violation of the latter type is distinct from one of the former, and thus not subject to §109(a). This argument's force is outweighed by other statutory considerations, including the fact that §602(a) unambiguously states that the prohibited importation is an infringement "under [§]106,'' thereby identifying §602 violations as a species of §106 violations. More important is the fact that the §106 rights are subject to all of the provisions of " [§§]107 through 120.'' If §602(a) functioned independently, none of those sections would limit its coverage. Pp. ____-____.

(e) The Court finds unpersuasive the Solicitor General's argument that "importation'' describes an act that is not protected by §109(a)'s authorization to a subsequent owner "to sell or otherwise dispose of the possession of'' a copy. An ordinary interpretation of that language includes the right to ship the copy to another person in another country. More important, the Solicitor General's cramped reading is at odds with §109(a)'s necessarily broad reach. The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution. There is no reason to assume that Congress intended §109(a) to limit the doctrine's scope. Pp. ____-____.

(f) The wisdom of protecting domestic copyright owners from the unauthorized importation of validly copyrighted copies of their works, and the fact that the Executive Branch has recently entered into at least five international trade agreements apparently intended to do just that, are irrelevant to a proper interpretation of the Act. P. ____.

98 F. 3d 1109, reversed.

STEVENS, J., delivered the opinion for a unanimous Court. GINSBURG, J., filed a concurring opinion.

Allen R. Snyder, Washington, DC, for petitioner.

Raymond H. Goettsch, Long Beach, CA, for respondent.

Lawrence G. Wallace, Washington, DC, for United States as amicus curiae by special leave of the Court.

Justice STEVENS delivered the opinion of the Court.

Section 106(3) of the Copyright Act of 1976(Act), 17 U.S.C. §106(3), gives the owner of a copyright the exclusive right to distribute copies of a copyrighted work. That exclusive right is expressly limited, however, by the provisions of §§107 through 120. Section 602(a) gives the copyright owner the right to prohibit the unauthorized importation of copies. The question presented by this case is whether the right granted by §602(a) is also limited by §§107 through 120. More narrowly, the question is whether the "first sale'' doctrine endorsed in §109(a) is applicable to imported copies.

I

Respondent, L'anza Research International, Inc. (L'anza), is a California corporation engaged in the business of manufacturing and selling shampoos, conditioners, and other hair care products. L'anza has copyrighted the labels that are affixed to those products. In the United States, L'anza sells exclusively to domestic distributors who have agreed to resell within limited geographic areas and then only to authorized retailers such as barber shops, beauty salons, and professional hair care colleges. L'anza has found that the American "public is generally unwilling to pay the price charged for high quality products, such as L'anza's products, when they are sold along with the less expensive lower quality products that are generally carried by supermarkets and drug stores.'' App. 54 (declaration of Robert Hall). L'anza promotes the domestic sales of its products with extensive advertising in various trade magazines and at point of sale, and by providing special training to authorized retailers.

L'anza also sells its products in foreign markets. In those markets, however, it does not engage in comparable advertising or promotion; its prices to foreign distributors are 35% to 40% lower than the prices charged to domestic distributors. In 1992 and 1993, L'anza's distributor in the United Kingdom arranged the sale of three shipments to a distributor in Malta;^[1] each shipment contained several tons of L'anza products with copyrighted labels affixed.^[2] The record does not establish whether the initial purchaser was the distributor in the United Kingdom or the distributor in Malta, or whether title passed when the goods were delivered to the carrier or when they arrived at their destination, but it is undisputed that the goods were manufactured by L'anza and first sold by L'anza to a foreign purchaser.

It is also undisputed that the goods found their way back to the United States without the permission of L'anza and were sold in California by unauthorized retailers who had purchased them at discounted prices from Quality King Distributors, Inc. (petitioner). There is some uncertainty about the identity of the actual importer, but for the purpose of our decision we assume that petitioner bought all three shipments from the Malta distributor, imported them, and then resold them to retailers who were not in L'anza's authorized chain of distribution.

After determining the source of the unauthorized sales, L'anza brought suit against petitioner and several other defendants.^[3] The complaint alleged that the importation and subsequent distribution of those products bearing copyrighted labels violated L'anza's "exclusive rights under 17 U.S.C. §§106, 501 and 602 to reproduce and distribute the copyrighted material in the United States.'' App. 32. The District Court rejected petitioner's defense based on the "first sale'' doctrine recognized by §109 and entered summary judgment in favor of L'anza. Based largely on its conclusion that §602 would be "meaningless'' if §109 provided a defense in a case of this kind, the Court of Appeals affirmed. 98 F.3d 1109, 1114 (C.A.9 1996). Because its decision created a conflict with the Third Circuit, see Sebastian Int'l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F.2d 1093 (1988), we granted the petition for certiorari. 520 U.S. ----, 117 S.Ct. 2406, 138 L.Ed.2d 173 (1997).

II

This is an unusual copyright case because L'anza does not claim that anyone has made unauthorized copies of its copyrighted labels. Instead, L'anza is primarily interested in protecting the integrity of its method of marketing the products to which the labels are affixed. Although the labels themselves have only a limited creative component, our interpretation of the relevant statutory provisions would apply equally to a case involving more familiar copyrighted materials such as sound recordings or books. Indeed, we first endorsed the first sale doctrine in a case involving a claim by a publisher that the resale of its books at discounted prices infringed its copyright on the books. Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 28 S.Ct. 722, 52 L.Ed. 1086 (1908).^[4]

In that case, the publisher, Bobbs-Merrill, had inserted a notice in its books that any retail sale at a price under $1.00 would constitute an infringement of its copyright. The defendants, who owned Macy's department store, disregarded the notice and sold the books at a lower price without Bobbs-Merrill's consent. We held that the exclusive statutory right to "vend''^[5] applied only to the first sale of the copyrighted work:

"What does the statute mean in granting "the sole right of vending the same'? Was it intended to create a right which would permit the holder of the copyright to fasten, by notice in a book or upon one of the articles mentioned within the statute, 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? It is not denied that one who has sold a copyrighted article, without restriction, has parted with all right to control the sale of it. The purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.

"In this case the stipulated facts show that the books sold by the appellant were sold at wholesale, and purchased by those who made no agreement as to the control of future sales of the book, and took upon themselves no obligation to enforce the notice printed in the book, undertaking to restrict retail sales to a price of one dollar per copy.'' Id., at 349-350, 28 S.Ct., at 726.

The statute in force when Bobbs-Merrill was decided provided that the copyright owner had the exclusive right to "vend'' the copyrighted work.^[6] Congress subsequently codified our holding in Bobbs-Merrill that the exclusive right to "vend'' was limited to first sales of the work.^[7] Under the 1976 Act, the comparable exclusive right granted in 17 U.S.C. §106(3) is the right "to distribute copies . . . by sale or other transfer of ownership.''^[8] The comparable limitation on that right is provided not by judicial interpretation, but by an express statutory provision. Section 109(a) provides:

"Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord . . . . ''^[9]

The Bobbs-Merrill opinion emphasized the critical distinction between statutory rights and contract rights.^[10] In this case, L'anza relies on the terms of its contracts with its domestic distributors to limit their sales to authorized retail outlets. Because the basic holding in Bobbs-Merrill is now codified in §109(a) of the Act, and because those domestic distributors are owners of the products that they purchased from L'anza (the labels of which were "lawfully made under this title''), L'anza does not, and could not, claim that the statute would enable L'anza to treat unauthorized resales by its domestic distributors as an infringement of its exclusive right to distribute copies of its labels. L'anza does claim, however, that contractual provisions are inadequate to protect it from the actions of foreign distributors who may resell L'anza's products to American vendors unable to buy from L'anza's domestic distributors, and that §602(a) of the Act, properly construed, prohibits such unauthorized competition. To evaluate that submission, we must, of course, consider the text of §602(a).

III

The most relevant portion of §602(a) provides:

"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 . . . . ''^[11]

It is significant that this provision does not categorically prohibit the unauthorized importation of copyrighted materials. Instead, it provides that such importation is an infringement of the exclusive right to distribute copies "under section 106.'' Like the exclusive right to "vend'' that was construed in Bobbs-Merrill, the exclusive right to distribute is a limited right. The introductory language in §106 expressly states that all of the exclusive rights granted by that section-including, of course, the distribution right granted by subsection (3)-are limited by the provisions of §§107 through 120.^[12] One of those limitations, as we have noted, is provided by the terms of §109(a), which expressly permit the owner of a lawfully made copy to sell that copy " [n]otwithstanding the provisions of section 106(3).''^[13]

After the first sale of a copyrighted item "lawfully made under this title,'' any subsequent purchaser, whether from a domestic or from a foreign reseller, is obviously an "owner'' of that item. Read literally, §109(a) unambiguously states that such an owner "is entitled, without the authority of the copyright owner, to sell'' that item. Moreover, since §602(a) merely provides that unauthorized importation is an infringement of an exclusive right "under section 106,'' and since that limited right does not encompass resales by lawful owners, the literal text of §602(a) is simply inapplicable to both domestic and foreign owners of L'anza's products who decide to import them and resell them in the United States.^[14]

Notwithstanding the clarity of the text of §§106(3), 109(a), and 602(a), L'anza argues that the language of the Act supports a construction of the right granted by §602(a) as "distinct from the right under Section 106(3) standing alone,'' and thus not subject to §109(a). Brief for Respondent 15. Otherwise, L'anza argues, both the §602(a) right itself and its exceptions^[15] would be superfluous. Moreover, supported by various amici curiae, including the Solicitor General of the United States, L'anza contends that its construction is supported by important policy considerations. We consider these arguments separately.

IV

L'anza advances two primary arguments based on the text of the Act: (1) that §602(a), and particularly its three exceptions, are superfluous if limited by the first sale doctrine; and (2) that the text of §501 defining an "infringer'' refers separately to violations of §106, on the one hand, and to imports in violation of §602. The short answer to both of these arguments is that neither adequately explains why the words "under section 106'' appear in §602(a). The Solicitor General makes an additional textual argument: he contends that the word "importation'' in §602(a) describes an act that is not protected by the language in §109(a) authorizing a subsequent owner "to sell or otherwise dispose of the possession of'' a copy. Each of these arguments merits separate comment.

The Coverage of §602(a)

Prior to the enactment of §602(a), the Act already prohibited the importation of "piratical,'' or unauthorized, copies.^[16] Moreover, that earlier prohibition is retained in §602(b) of the present act.^[17] L'anza therefore argues (as do the Solicitor General and other amici curiae) that §602(a) is superfluous unless it covers non-piratical ("lawfully made'') copies sold by the copyright owner, because importation nearly always implies a first sale. There are several flaws in this argument.

First, even if §602(a) did apply only to piratical copies, it at least would provide the copyright holder with a private remedy against the importer, whereas the enforcement of §602(b) is vested in the Customs Service.^[18] Second, because the protection afforded by §109(a) is available only to the "owner'' of a lawfully made copy (or someone authorized by the owner), the first sale doctrine would not provide a defense to a §602(a) action against any non-owner such as a bailee, a licensee, a consignee, or one whose possession of the copy was unlawful.^[19] Third, §602(a) applies to a category of copies that are neither piratical nor "lawfully made under this title.'' That category encompasses copies that were "lawfully made'' not under the United States Copyright Act, but instead, under the law of some other country.

The category of copies produced lawfully under a foreign copyright was expressly identified in the deliberations that led to the enactment of the 1976 Act. We mention one example of such a comment in 1961 simply to demonstrate that the category is not a merely hypothetical one. In a report to Congress, the Register of Copyrights stated, in part:

"When arrangements are made for both a U.S. edition and a foreign edition of the same work, the publishers frequently agree to divide the international markets. The foreign publisher agrees not to sell his edition in the United States, and the U.S. publisher agrees not to sell his edition in certain foreign countries. It has been suggested that the import ban on piratical copies should be extended to bar the importation of the foreign edition in contravention of such an agreement.'' Copyright Law Revision: Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law, 87th Cong., 1st Sess., 125-126 (H.R. Judiciary Comm. Print 1961).

Even in the absence of a market allocation agreement between, for example, a publisher of the U.S. edition and a publisher of the British edition of the same work, each such publisher could make lawful copies. If the author of the work gave the exclusive U.S. distribution rights-enforceable under the Act-to the publisher of the U.S. edition and the exclusive British distribution rights to the publisher of the British edition,^[20] however, presumably only those made by the publisher of the U.S. 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).

The argument that the statutory exceptions to §602(a) are superfluous if the first sale doctrine is applicable rests on the assumption that the coverage of that section is co-extensive with the coverage of §109(a). But since it is, in fact, broader because it encompasses copies that are not subject to the first sale doctrine-e.g., copies that are lawfully made under the law of another country-the exceptions do protect the traveler who may have made an isolated purchase of a copy of a work that could not be imported in bulk for purposes of resale. As we read the Act, although both the first sale doctrine embodied in §109(a) and the exceptions in §602(a) may be applicable in some situations, the former does not subsume the latter; those provisions retain significant independent meaning.

Section 501's Separate References to §§106 and 602

The text of §501 does lend support to L'anza's submission. In relevant part, it provides:

" (a) Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be . . . . ''

The use of the words "or who imports,'' rather than words such as "including one who imports,'' is more consistent with an interpretation that a violation of §602 is distinct from a violation of §106 (and thus not subject to the first sale doctrine set out in §109(a)) than with the view that it is a species of such a violation. Nevertheless, the force of that inference is outweighed by other provisions in the statutory text.

Most directly relevant is the fact that the text of §602(a) itself unambiguously states that the prohibited importation is an infringement of the exclusive distribution right "under section 106, actionable under section 501.'' Unlike that phrase, which identifies §602 violations as a species of §106 violations, the text of §106A, which is also cross-referenced in §501, uses starkly different language. It states that the author's right protected by §106A is "independent of the exclusive rights provided in Section 106.'' The contrast between the relevant language in §602 and that in §106A strongly implies that only the latter describes an independent right.^[21]

Of even greater importance is the fact that the §106 rights are subject not only to the first sale defense in §109(a), but also to all of the other provisions of "sections 107 through 120.'' If §602(a) functioned independently, none of those sections would limit its coverage. For example, the "fair use'' defense embodied in §107^[22] would be unavailable to importers if §602(a) created a separate right not subject to the limitations on the §106(3) distribution right. Under L'anza's interpretation of the Act, it presumably would be unlawful for a distributor to import copies of a British newspaper that contained a book review quoting excerpts from an American novel protected by a United States copyright.^[23] Given the importance of the fair use defense to publishers of scholarly works, as well as to publishers of periodicals, it is difficult to believe that Congress intended to impose an absolute ban on the importation of all such works containing any copying of material protected by a United States copyright.

In the context of this case, involving copyrighted labels, it seems unlikely that an importer could defend an infringement as a "fair use'' of the label. In construing the statute, however, we must remember that its principal purpose was to promote the progress of the "useful Arts,'' U.S.Const., Art. I, §8, cl. 8, by rewarding creativity, and its principal function is the protection of original works, rather than ordinary commercial products that use copyrighted material as a marketing aid. It is therefore appropriate to take into account the impact of the denial of the fair use defense for the importer of foreign publications. As applied to such publications, L'anza's construction of §602 "would merely inhibit access to ideas without any countervailing benefit.'' Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 450-451, 104 S.Ct. 774, 793, 78 L.Ed.2d 574 (1984).^[24]

Does an importer "sell or otherwise dispose'' of copies as those words are used in §109(a)?

Whether viewed from the standpoint of the importer or from that of the copyright holder, the textual argument advanced by the Solicitor General^[25] that the act of "importation'' is neither a sale nor a disposal of a copy under §109(a)-is unpersuasive. Strictly speaking, an importer could, of course, carry merchandise from one country to another without surrendering custody of it. In a typical commercial transaction, however, the shipper transfers "possession, custody, control and title to the products''^[26] to a different person, and L'anza assumes that petitioner's importation of the L'anza shipments included such a transfer. An ordinary interpretation of the statement that a person is entitled "to sell or otherwise dispose of the possession'' of an item surely includes the right to ship it to another person in another country.

More important, the Solicitor General's cramped reading of the text of the statutes is at odds not only with §602(a)'s more flexible treatment of unauthorized importation as an infringement of the distribution right (even when there is no literal "distribution''), but also with the necessarily broad reach of §109(a). The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution. As we have recognized, the codification of that doctrine in §109(a) makes it clear that the doctrine applies only to copies that are "lawfully made under this title,'' but that was also true of the copies involved in the Bobbs-Merrill case, as well as those involved in the earlier cases applying the doctrine. There is no reason to assume that Congress intended either §109(a) or the earlier codifications of the doctrine to limit its broad scope.^[27]

In sum, we are not persuaded by either L'anza's or the Solicitor General's textual arguments.

V

The parties and their amici have debated at length the wisdom or unwisdom of governmental restraints on what is sometimes described as either the "gray market'' or the practice of "parallel importation.''^[28] In K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S.Ct. 1811, 100 L.Ed.2d 313 (1988), we used those terms to refer to the importation of foreign-manufactured goods bearing a valid United States trademark without the consent of the trademark holder. Id., at 285-286, 108 S.Ct., at 1814-1815. We are not at all sure that those terms appropriately describe the consequences of an American manufacturer's decision to limit its promotional efforts to the domestic market and to sell its products abroad at discounted prices that are so low that its foreign distributors can compete in the domestic market.^[29] But even if they do, whether or not we think it would be wise policy to provide statutory protection for such price discrimination is not a matter that is relevant to our duty to interpret the text of the Copyright Act.

Equally irrelevant is the fact that the Executive Branch of the Government has entered into at least five international trade agreements that are apparently intended to protect domestic copyright owners from the unauthorized importation of copies of their works sold in those five countries.^[30] The earliest of those agreements was made in 1991; none has been ratified by the Senate. Even though they are of course consistent with the position taken by the Solicitor General in this litigation, they shed no light on the proper interpretation of a statute that was enacted in 1976.^[31]

The judgment of the Court of Appeals is reversed.

It is so ordered.

Justice GINSBURG, concurring.

This case involves a "round trip'' journey, travel of the copies in question from the United States to places abroad, then back again. I join the Court's opinion recognizing that we do not today resolve cases in which the allegedly infringing imports were manufactured abroad. See W. Patry, Copyright Law and Practice 166-170 (1997 Supp.) (commenting that provisions of Title 17 do not apply extraterritorially unless expressly so stated, hence the words "lawfully made under this title'' in the "first sale'' provision, 17 U.S.C. §109(a), must mean "lawfully made in the United States''); see generally P. Goldstein, Copyright §16.0, pp. 16:1-16:2 (2d ed. 1998) ("Copyright protection is territorial. The rights granted by the United States Copyright Act extend no farther than the nation's borders.'').

[*] The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 287, 50 L.Ed. 499.

[1] See App. 64 (declaration of Robert De Lanza).

[2] See id., at 70-83.

[3] L'anza's claims against the retailer defendants were settled. The Malta distributor apparently never appeared in this action and a default judgment was entered against it.

[4] The doctrine had been consistently applied by other federal courts in earlier cases. See Kipling v. G.P. Putnam's Sons, 120 F. 631, 634 (C.A.2 1903); Doan v. American Book Co., 105 F. 772, 776 (C.A.7 1901); Harrison v. Maynard, Merrill & Co., 61 F. 689, 691 (C.A.2 1894); Bobbs-Merrill Co. v. Snellenburg, 131 F. 530, 532 (C.C.E.D. Pa.1904); Clemens v. Estes, 22 F. 899, 900 (C.C.D.Mass.1885); Stowe v. Thomas, 23 F. Cas. 201, 206-207 (C.C.E.D.Pa.1853).

[5] In 1908, when Bobbs-Merrill was decided, the copyright statute provided that copyright owners had "the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending'' their copyrighted works. Copyright Act of 1891, §4952, 26 Stat. 1107 (emphasis added).

[6] See n. 5, supra.

[7] Congress codified the first sale doctrine in §41 of the Copyright Act of 1909, ch. 320, 35 Stat. 1084, and again in §27 of the 1947 Act, ch. 391, 61 Stat. 660.

[8] The full text of §106 reads as follows:

"§106.Exclusive rights in copyrighted works

Subject to sections 107 through 120, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) 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;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.'' 17 U.S.C. §106 (1994 ed., Supp. I).

[9] The comparable section in the 1909 and 1947 Acts provided that "nothing 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, ch. 320, §41, 35 Stat. 1084; see also Copyright Act of 1947, ch. 391, §27, 61 Stat. 660. It is noteworthy that §109(a) of the 1978 Act does not apply to "any copy''; it applies only to a copy that was "lawfully made under this title.''

[10] 

We do not think the statute can be given such a construction, and it is to be remembered that this is purely a question of statutory construction. There is no claim in this case of contract limitation, nor license agreement controlling the subsequent sales of the book.

Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350, 28 S.Ct. 722, 726, 52 L.Ed. 1086 (1908).

[11] The remainder of §602(a) reads as follows:

"This subsection does not apply to-

(1) importation of copies or phonorecords 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 phonorecords for use in schools, or copies of any audiovisual work imported for purposes other than archival use;

(2) importation, for the private use of the importer 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 with respect to copies or phonorecords forming part of such person's personal baggage; or

(3) 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).

[12] See n. 8, supra.

[13] See text accompanying n. 9, supra.

[14] Despite L'anza's contention to the contrary, see Brief for Respondent 26-27, the owner of goods lawfully made under the Act is entitled to the protection of the first sale doctrine in an action in a United States court even if the first sale occurred abroad. Such protection does not require the extraterritorial application of the Act any more than §602(a)'s "acquired abroad'' language does.

[15] See n. 11, supra.

[16] See 17 U.S.C. §§106, 107 (1970).

[17] Section 602(b) provides in relevant part: "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 . . . . '' The first sale doctrine of §109(a) does not protect owners of piratical copies, of course, because such copies were not "lawfully made.''

[18] See n. 17, supra.

[19] In its opinion in this case, the Court of Appeals quoted a statement by a representative of the music industry expressing the need for protection against the importation of stolen motion picture prints: "We've had a similar situation with respect to motion picture prints, which are sent all over the world-legitimate prints made from the authentic negative. These prints get into illicit hands. They're stolen, and there's no contractual relationship . . . . Now those are not piratical copies.'' Copyright Law Revision Part 2: Discussion and Comments on Report of the Register of Copyrights on General Revision of the U.S. Copyright Law, 88th Cong., 1st Sess., 213 (H.R. Judiciary Comm. Print 1963) (statement of Mr. Sargoy), quoted in 98 F.3d 1109, 1116 (C.A.9 1996).

[20] A participant in a 1964 panel discussion expressed concern about this particular situation. Copyright Law Revision Part 4: Further Discussion and Comments on Preliminary Draft for Revised U.S. Copyright Law, 88th Cong., 2d Sess., 119 (H.R. Judiciary Comm. Print 1964) (statement of Mrs. Pilpel) ("For example, if someone were to import a copy of the British edition of an American book and the author had transferred exclusive United States and Canadian rights to an American publisher, would that British edition be in violation so that this would constitute an infringement under this section?''); see also id., at 209 (statement of Mr. Manges) (describing similar situation as "a troublesome problem that confronts U.S. book publishers frequently'').

[21] The strength of the implication created by the relevant language in §106A is not diminished by the fact that Congress enacted §106A more recently than §602(a), which is part of the Copyright Act of 1976. Section 106A was passed as part of the Visual Artists Rights Act of 1990 in order to protect the moral rights of certain visual artists. Section 106A is analogous to Article 6bis of the Berne Convention for the Protection of Literary and Artistic Works, but its coverage is more limited. See 2 P. Goldstein, Copyright §5.12, p. 5:225 (2d ed. 1996) (§106A encompasses aspects of the moral rights guaranteed by Article 6bis of the Berne Convention, "but effectively gives these rights a narrow subject matter and scope'').

[22] Title 17 U.S.C. §107 provides as follows:

"§107.Limitations on exclusive rights: Fair use

"Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include-

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

[23] The §602(a) exceptions, which are substantially narrower than §107, would not permit such importation. See n. 11, supra.

[24] L'anza's reliance on §602(a)(3)'s reference to §108(g)(2), see n. 11, supra, to demonstrate that all of the other limitations set out in §§107 through 120-including the first sale and fair use doctrines-do not apply to imported copies is unavailing for the same reasons.

[25] See also Brief for Recording Industry Association of America et al. 19-21.

[26] App. 87.

[27] See, e.g., H.R. Rep. No. 1476, 94th Cong., 2d Sess., 79 (1979) ("Section 109(a) restates and confirms'' the first sale doctrine established by prior case law); S.Rep. No. 473, 94th Cong., 1st Sess., 71 (1975) (same).

[28] Compare, for example, Gorelick & Little, The Case for Parallel Importation, 11 N.C.J. Int'l L. & Comm. Reg. 205 (1986), with Gordon, Gray Market Is Giving Hair-Product Makers Gray Hair, N.Y. Times, July 13, 1997, section 1, p. 28, col. 1.

[29] Presumably L'anza, for example, could have avoided the consequences of that competition either (1) by providing advertising support abroad and charging higher prices, or (2) if it was satisfied to leave the promotion of the product in foreign markets to its foreign distributors, to sell its products abroad under a different name.

[30] The Solicitor General advises us that such agreements have been made with Cambodia, Trinidad and Tobago, Jamaica, Ecuador, and Sri Lanka.

[31] We also note that in 1991, when the first of the five agreements was signed, the Third Circuit had already issued its opinion in Sebastian Int'l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F.2d 1093 (1988), adopting a position contrary to that subsequently endorsed by the Executive Branch.

 568 U.S. ____ (2013)

KIRTSAENG, DBA BLUECHRISTINE99
v.
JOHN WILEY & SONS, INC.

SUPREME COURT OF THE UNITED STATES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
No. 11–697.
Argued October 29, 2012—Decided March 19, 2013

Syllabus

[1] The “exclusive rights” that a copyright owner has “to distribute copies . . . of [a] copyrighted work,” 17 U. S. C. §106(3), are qualified by the application of several limitations set out in §§107 through 122, including the “first sale” doctrine, which provides that “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,” §109(a). Importing a copy made abroad without the copyright owner’s permission is an infringement of §106(3). See §602(a)(1). In Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U. S. 135, 145, this Court held that §602(a)(1)’s reference to §106(3) incorporates the §§107 through 122 limitations, including §109’s “first sale” doctrine. However, the copy in Quality King was initially manufactured in the United States and then sent abroad and sold.

Respondent, John Wiley & Sons, Inc., an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley Asia) rights to publish, print, and sell foreign editions of Wiley’s English language textbooks abroad. Wiley Asia’s books state that they are not to be taken (without permission) into the United States. When petitioner Kirtsaeng moved from Thailand to the United States to study mathematics, he asked friends and family to buy foreign edition English-language textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States. He then sold the books, reimbursed his family and friends, and kept the profit.

Wiley filed suit, claiming that Kirtsaeng’s unauthorized importation and resale of its books was an infringement of Wiley’s §106(3) [2] exclusive right to distribute and §602’s import prohibition. Kirtsaeng replied that because his books were “lawfully made” and acquired legitimately, §109(a)’s “first sale” doctrine permitted importation and resale without Wiley’s further permission. The District Court held that Kirtsaeng could not assert this defense because the doctrine does not apply to goods manufactured abroad. The jury then found that Kirtsaeng had willfully infringed Wiley’s American copyrights and assessed damages. The Second Circuit affirmed, concluding that §109(a)’s “lawfully made under this title” language indicated that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad.

Held: The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. Pp. 7–33.

(a) Wiley reads “lawfully made under this title” to impose a geographical limitation that prevents §109(a)’s doctrine from applying to Wiley Asia’s books. Kirtsaeng, however, reads the phrase as imposing the non-geographical limitation made “in accordance with” or “in compliance with” the Copyright Act, which would permit the doctrine to apply to copies manufactured abroad with the copyright owner’s permission. Pp. 7–8.

(b) Section 109(a)’s language, its context, and the “first sale” doctrine’s common-law history favor Kirtsaeng’s reading. Pp. 8–24.

(1) Section 109(a) says nothing about geography. “Under” can logically mean “in accordance with.” And a nongeographical interpretation provides each word in the phrase “lawfully made under this title” with a distinct purpose: “lawfully made” suggests an effort to distinguish copies that were made lawfully from those that were not, and “under this title” sets forth the standard of “lawful[ness]” (i.e., the U. S. Copyright Act). This simple reading promotes the traditional copyright objective of combatting piracy and makes word-by-word linguistic sense.

In contrast, the geographical interpretation bristles with linguistic difficulties. Wiley first reads “under” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Wiley then argues that the Act “is applicable” only in the United States. However, neither “under” nor any other word in “lawfully made under this title” means “where.” Nor can a geographical limitation be read into the word “applicable.” The fact that the Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad. Indeed, §602(a)(2) makes foreign-printed pirated copies subject to the Copyright Act. And §104 says that works “subject to protection” include unpublished works “without regard to the [author’s] nationality or domicile,” and works “first published” in any of the [3] nearly 180 nations that have signed a copyright treaty with the United States. Pp. 8–12.

(2) Both historical and contemporary statutory context indicate that Congress did not have geography in mind when writing the present version of §109(a). A comparison of the language in §109(a)’s predecessor and the present provision supports this conclusion. The former version referred to those who are not owners of a copy, but mere possessors who “lawfully obtained” a copy, while the present version covers only owners of a “lawfully made” copy. This new language, including the five words at issue, makes clear that a lessee of a copy will not receive “first sale” protection but one who owns a copy will be protected, provided that the copy was “lawfully made.” A nongeographical interpretation is also supported by other provisions of the present statute. For example, the “manufacturing clause,” which limited importation of many copies printed outside the United States, was phased out in an effort to equalize treatment of copies made in America and copies made abroad. But that “equal treatment” principle is difficult to square with a geographical interpretation that would grant an American copyright holder permanent control over the American distribution chain in respect to copies printed abroad but not those printed in America. Finally, the Court normally presumes that the words “lawfully made under this title” carry the same meaning when they appear in different but related sections, and it is unlikely that Congress would have intended the consequences produced by a geographical interpretation. Pp. 12–16.

(3) A nongeographical reading is also supported by the canon of statutory interpretation that “when a statute covers an issue previously governed by the common law,” it is presumed that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf, 560 U. S. _ . The common-law “first sale” doctrine, which has an impeccable historic pedigree, makes no geographical distinctions. Nor can such distinctions be found in Bobbs-Merrill Co. v. Straus, 210 U. S. 339, where this Court first applied the “first sale” doctrine, or in §109(a)’s predecessor provision, which Congress enacted a year later. Pp. 17–19.

(4) Library associations, 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,” Art. I, §8, cl. 8. For example, a geographical interpretation of the first-sale doctrine would likely require libraries to obtain permission before circulating the many books in their collections that were printed overseas. Wiley counters that such problems have not occurred in the 30 years since a federal court [4] first adopted a geographical interpretation. But the law has not been settled for so long in Wiley’s favor. The Second Circuit in this case was the first Court of Appeals to adopt a purely geographical interpretation. Reliance on the “first sale” doctrine is also deeply embedded in the practices of booksellers, libraries, museums, and retailers, who have long relied on its protection. And the fact that harm has proved limited so far may simply reflect the reluctance of copyright holders to assert geographically based resale rights. Thus, the practical problems described by petitioner and his amici are too serious, extensive, and likely to come about to be dismissed as insignificant— particularly in light of the ever-growing importance of foreign trade to America. Pp. 19–24.

(c) Several additional arguments that Wiley and the dissent make in support of a geographical interpretation are unpersuasive. Pp. 24– 33. 654 F. 3d 210, reversed and remanded.

BREYER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, SOTOMAYOR, and KAGAN, JJ., joined. KAGAN, J., filed a concurring opinion, in which ALITO, J., joined. GINSBURG, J., filed a dissenting opinion, in which KENNEDY, J., joined, and in which SCALIA, J., joined except as to Parts III and V–B–1.

Opinion

[1] JUSTICE BREYER delivered the opinion of the Court.

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 entitled “Limitations on exclusive rights,” include, for example, the principle of “fair use” (§107), permission for limited library archival reproduction, (§108), and the doctrine at issue here, the “first sale” doctrine (§109).

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], 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 [2] phonorecord.” (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

“[i]mportation 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 “[s]ubject 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. L’anza Research [3] Int’l, Inc., 523 U. S. 135, 145 (1998), we held that §602(a)(1)’s reference to §106(3)’s exclusive distribution right incorporates the later subsections’ limitations, including, in particular, the “first sale” doctrine of §109. Thus, it might seem that, §602(a)(1) notwithstanding, one who buys a copy abroad can freely import that copy into the United States and dispose of it, just as he could had he bought the copy in the United States.

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 sale” doctrine applies to copies of a copyrighted work lawfully made abroad.

I
A

Respondent, John Wiley & Sons, Inc., publishes academic textbooks. Wiley obtains from its authors various foreign and domestic copyright assignments, licenses and [4] permissions—to the point that we can, for present purposes, refer to Wiley as the relevant American copyright owner. See 654 F. 3d 210, 213, n. 6 (CA2 2011). Wiley often assigns to its wholly owned foreign subsidiary, John Wiley & Sons (Asia) Pte Ltd., rights to publish, print, and sell Wiley’s English language textbooks abroad. App. to Pet. for Cert. 47a–48a. Each copy of a Wiley Asia foreign edition will likely contain language making clear that the copy is to be sold only in a particular country or geographical region outside the United States. 654 F. 3d, at 213.

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 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, 654 F. 3d, at 213, each [5] version manufactured and sold with Wiley’s permission: (1) an American version printed and sold in the United States, and (2) a foreign version manufactured and sold abroad. And Wiley makes certain that copies of the second version state that they are not to be taken (without permission) into the United States. Ibid.

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 book shops, 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.

B

In 2008 Wiley brought this federal lawsuit against Kirtsaeng for copyright infringement. 654 F. 3d, at 213. Wiley claimed that Kirtsaeng’s unauthorized importation of its books and his later resale of those books amounted to an infringement of Wiley’s §106(3) exclusive right to distribute as well as §602’s related import prohibition. 17 U. S. C. §§106(3) (2006 ed.), 602(a) (2006 ed., Supp. V). See also §501 (2006 ed.) (authorizing infringement action). App. 204–211. Kirtsaeng replied that the books he had acquired were “ ‘lawfully made’ ” and that he had acquired them legitimately. Record in No. 1:08–CV–7834–DCP [6] (SDNY), Doc. 14, p. 3. Thus, in his view, §109(a)’s “first sale” doctrine permitted him to resell or otherwise dispose of the books without the copyright owner’s further permission. Id., at 2–3.

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). 654 F. 3d, at 215.

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 (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., 541 F. 3d 982, 986 (CA9 2008) (“first sale” doctrine applies to copies manufactured outside the United States only if an authorized first sale occurs within the United [7] States), aff ’d by an equally divided court, 562 U. S. (2010), and Sebastian Int’l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F. 2d 1093, 1098, n. 1 (CA3 1988) (limitation of the first sale doctrine to copies made within the United States “does not fit comfortably within the scheme of the Copyright Act”).

II

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.” 654 F. 3d, at 221–222 (emphasis added). Wiley agrees that those five words limit the “first sale” doctrine “to copies made in conformance with the [United States] Copyright Act where the Copyright Act is applicable,” which (Wiley says) means it does not apply to copies made “outside the United States” and at least not to “foreign production of a copy for distribution exclusively abroad.” Brief for Respondent 15–16. Similarly, the Solicitor General says that those five words limit the “first sale” doctrine’s applicability to copies “ ‘made subject to and in compliance with [the Copyright Act],’ ” which (the Solicitor General says) are copies “made in the United States.” Brief for United States as Amicus Curiae 5 (hereinafter Brief for United States) (emphasis added). And the Ninth Circuit has held that those words limit the “first sale” doctrine’s applicability (1) to copies lawfully made in the United States, and (2) to copies lawfully made outside the United States but initially sold in the United States with the copyright owner’s permission. Denbicare-[8]-U. S. A. Inc. v. Toys “R” Us, Inc., 84 F. 3d 1143, 1149–1150 (1996).

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 non-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 non-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 [9] §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 (combatting piracy), and it makes word-by-word linguistic sense.

The geographical interpretation, however, bristles with linguistic difficulties. It gives the word “lawfully” little, if any, linguistic work to do. (How could a book be unlawfully “made under this title”?) It imports geography into a statutory provision that says nothing explicitly about it. And it is far more complex than may at first appear.

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 Respondnet 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 7 (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 6, but as this [10] Court has repeatedly acknowledged, the word evades a uniform, consistent meaning. See Kucana v. Holder, 558 U. S. 233, 245 (2010) (“ ‘under’ is chameleon”); Ardestani v. INS, 502 U. S. 129, 135 (1991) (“under” has “many dictionary definitions” and “must draw its meaning from its context”).

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 “sub ject 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 6 (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 [11] “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) (herein after Nimmer on Copyright) (noting that the principle that “copyright laws do not have any extraterritorial operation” “requires some qualification”).

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., 84 F. 3d, at 1149–1150. See also Brief for Respondent 16 (suggesting that the clause at least excludes “the foreign production of a copy for distribution exclusively abroad”); id., at 51 (the Court need “not decide whether the copyright owner would be able to restrict further distribution” in the case of “a downstream domestic purchaser of authorized imports”); Brief for Petitioner in Costco Wholesale Corp. v. Omega, S. A., O. T. 2010, No. 08–1423, p. 12 (excepting imported copies “made by unrelated foreign copyright holders” (emphasis deleted)).

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 (with a design copyright) made in China, even if the copyright holder has granted permission for the foreign manufacture, importation, and an initial [12] 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-nongeographical 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:

“[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.” Copyright Act of 1909, §41, 35 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 [13] 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 phonorecord.” What does this change in language accomplish?

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 1970’s (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 [14] 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., 315 F. 2d 847, 851 (CA2 1963) (Friendly, J.) (pointing out predecessor statute’s leasing problem)).

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 phonorecord, 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 manufactured abroad. See H. R. Rep. No. 94–1476, at 165–166.

[15] 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 10) 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 phase-out), seeking the opposite kind of policy goal. Cf. Golan v. Holder, 565 U. S., (2012) (slip op., at 30) (Congress has moved from a copyright regime that, prior to 1891, entirely excluded foreign works from U. S. copyright protection to a regime that now “ensure[s] that most works, whether foreign or domestic, would be governed by the same legal regime” (emphasis added)).

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., 510 U. S. 332, 342 (1994). But doing so here produces surprising consequences. Consider:

(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 [16] 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 further 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 II–D, infra, why we find it unlikely that Congress would have intended these, and other related consequences.

[17] C

A relevant canon of statutory interpretation favors a nongeographical 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, 560 U. S. _ , n. 13 (2010) (slip op., at 14, n. 13). See also Isbrandtsen Co. v. Johnson, 343 U. S. 779, 783 (1952) (“Statutes which invade the common law . . . are to be read with a presumption favoring the retention of long established and familiar principles, except when a statutory purpose to the contrary is evident”).

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 Littleton, 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 alien[ate] the same, the [condition] is voi[d], because his whole interest . . . is out of him, so as he hath no possibilit[y] of a Reverter, and it is against Trade and Traffi[c], 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 im-[18]-portance 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., 551 U. S. 877, 886 (2007) (restraints with “manifestly anticompetitive effects” are per se illegal; others are subject to the rule of reason (internal quotation marks omitted)); 1 P. Areeda & H. Hovenkamp, Antitrust Law ¶100, p. 4 (3d ed. 2006) (“[T]he principal objective of antitrust policy is to maximize consumer welfare by encouraging firms to behave competitively”).

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, 210 U. S. 339 (1908); Copyright Act of 1909, §41, 35 Stat. 1084. See also Copyright Law Revision, Further Discussions and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong., 2d Sess., pt. 4, p. 212 (Comm. Print 1964) (Irwin Karp of Authors’ League of America expressing concern for “the very basic concept of copyright law that, once you’ve sold a copy legally, you can’t restrict its resale”).

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 supra, at 12. Rather, as the Solicitor General acknowledges, “a straightforward application of Bobbs-Merrill” would not preclude the “first sale” defense from applying to authorized copies made overseas. Brief for [19] United States 27. And we can find no language, context, purpose, or history that would rebut a “straightforward application” of that doctrine here.

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 non-geographical reading we adopt. Post, at 8–9 (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 [20] the nearly 180 copyright-treaty nations and enjoy American copyright protection under 17 U. S. C. §104, see supra, at 10); 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 Jefferson built commercial and personal libraries of foreign books, American readers have bought used books published and printed abroad. Brief for Powell’s Books Inc. et al. as Amici Curiae 7 (citing M. Stern, Antiquarian Bookselling in the United States (1985)). The dealers say that they have “operat[ed] . . . for centuries” under the assumption that the “first sale” doctrine applies. Brief for Powell’s Books 7. But under a geographical interpretation a contemporary [21] tourist who buys, say, at Shakespeare and Co. (in Paris), a dozen copies of a foreign book for American friends might find that she had violated the copyright law. The used book dealers cannot easily predict what the foreign copyright holder may think about a reader’s effort to sell a used copy of a novel. And they believe that a geographical interpretation will injure a large portion of the used-book business.

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., et al. as Amici 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 [22] 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 supra, at 10 (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 15—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 to protect “Trade and Traffi[c], and bargaining and contracting,” and they help explain why American copyright law has long applied that doctrine. Cf. supra, at 17–18.

Neither Wiley nor any of its many amici deny that a geographical interpretation could bring about these “horribles”—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., 569 F. Supp. 47, 49 (ED Pa. 1983), summarily aff ’d, 738 F. 2d 424 (CA3 1984) (table). Yet, it adds, these problems have not occurred. Why not? Because, says Wiley, the prob-[23]-lems and threats are purely theoretical; they are unlikely to reflect reality. See also post, at 30–31.

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, 847 F. 2d 1093. The Ninth Circuit has favored a modified geographical interpretation with a nongeographical (but textually unsustainable) corollary designed to diminish the problem. Denbicare U. S. A., 84 F. 3d 1143. See supra, at 11–12. And other courts have hesitated to adopt, and have cast doubt upon, the validity of the geographical interpretation. Pearson Educ., Inc. v. Liu, 656 F. Supp. 2d 407 (SDNY 2009); Red-Baron Franklin Park, Inc. v. Taito Corp., No. 88–0156–A, 1988 WL 167344, *3 (ED Va. 1988), rev’d on other grounds, 883 F. 2d 275 (CA4 1989).

For another thing, reliance upon the “first sale” doctrine is deeply embedded in the practices of those, such as book sellers, 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 [24] adopt textual readings of the statute that attempt to mitigate these harms. Brief for United States 27–28; post, at 24–28. 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 26 (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.

Thus, we believe that the practical problems that petitioner and his amici have described are too serious, too extensive, and too likely to come about for us to dismiss them as insignificant—particularly in light of the evergrowing importance of foreign trade to America. See The World Bank, Imports of goods and services (% of GDP) (imports in 2011 18% of U. S. gross domestic product compared to 11% in 1980), online at http:// data.worldbank.org/indicator/NE.IMP.GNFS.ZS? (as visited Mar. 15, 2013, and available in Clerk of Court’s case file). The upshot is that copyright-related consequences along with language, context, and interpretive canons argue strongly against a geographical interpretation of §109(a).

III

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 [25] 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. 523 U. S., at 138–139.

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). 523 U. S., at 145.

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.” 210 U. S., at [26] 349–350.

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 Copy right Act amendments retained a prior anti-piracy 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.

We do not believe that this argument is a strong one. Under Quality King’s interpretation, §602(a)(1) would still forbid importing (without permission, and subject to the exceptions in §602(a)(3)) copies lawfully made abroad, for example, where (1) a foreign publisher operating as the licensee of an American publisher prints copies of a book overseas but, prior to any authorized sale, seeks to send them to the United States; (2) a foreign printer or other manufacturer (if not the “owner” for purposes of §109(a), e.g., before an authorized sale) sought to send copyrighted goods to the United States; (3) “a book publisher transports copies to a wholesaler” and the wholesaler (not yet the owner) sends them to the United States, see Copyright Law Revision, pt. 4, at 211 (giving this example); or (4) a foreign film distributor, having leased films for distribution, or any other licensee, consignee, or bailee sought to send them to the United States. See, e.g., 2 Nimmer on Copyright §8.12[B][1][a], at 8–159 (“Section 109(a) provides that the distribution right may be exercised solely with respect to the initial disposition of copies of a work, not to prevent or restrict the resale or other further transfer of possession of such copies”). These examples show that §602(a)(1) retains significance. We concede it has less significance than the dissent believes appropriate, but the [27] dissent also adopts a construction of §106(3) that “significantly curtails” §109(a)’s effect, post, at 26, and so limits the scope of that provision to a similar, or even greater, degree.

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 distribution 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).” 523 U. S., at 148 (emphasis added). Wiley now argues that this phrase in the Quality King opinion means that books published abroad (under license) must fall outside the words “lawfully made under this title” and that we have consequently already given those words the geographical interpretation that it favors.

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 canvas 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, 546 U. S. 356, 363 (2006) (“[W]e are not bound to follow our dicta in a prior case in [28] which the point now at issue was not fully debated”); Humphrey’s Executor v. United States, 295 U. S. 602, 627–628 (1935) (rejecting, under stare decisis, dicta, “which may be followed if sufficiently persuasive but which are not controlling”). And, given the bit part that our Quality King statement played in our Quality King decision, we believe the view of stare decisis set forth in these opinions applies to the matter now before us.

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 1960’s, 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 “pub li[shed] 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 troubl[ing].” 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 unau-[29]-thorized 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,-[30] “lawfully made under this title.” And neither the report nor its accompanying 1960’s draft answers the question before us here. Cf. Quality King, 523 U. S., at 145 (without those five words, the import clause, via its reference to §106, imports the “first sale” doctrine).

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 13–16, 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.

. . . . . “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).

[31] 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 nongeographical 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 12. This means that, contrary to the dissent’s suggestion, any lack of legislative history pertaining to the “first sale” 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 18, n. 13. We consequently believe that the legislative history, on balance, supports the nongeographical 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[e]” to “[a]uthors” “for limited [t]imes” the “exclusive [r]ight to their . . . [w]ritings.” 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 Jefferson 440, 442–443 (J. Boyd ed. 1956) (arguing against any monopoly) with Letter from James [32] Madison to Thomas Jefferson (Oct. 17, 1788), in 14 id., at 16, 21 (J. Boyd ed. 1958) (arguing for a limited monopoly to secure production). But the Constitution’s language nowhere suggests that its limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain. Neither, to our knowledge, did any Founder make any such suggestion. We have found no precedent suggesting a legal preference for interpretations of copyright statutes that would provide for market divisions. Cf. Copyright Law Revision, pt. 2, at 194 (statement of Barbara Ringer, Copyright Office) (division of territorial markets was “primarily a matter of private contract”).

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., 498 U. S. 46, 49–50 (1990) (per curiam) (“[A]greements between competitors to allocate territories to minimize competition are illegal”). Whether copyright owners should, or should not, have more than ordinary commercial power to divide international markets is a matter for Congress to decide. We do no more here than try to determine what decision Congress has taken.

Fourth, the dissent and Wiley contend that our decision launches United States copyright law into an unprecedented regime of “international exhaustion.” Post, at 18– 23; 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 [33] 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 18–19. But our holding in Quality King that §109(a) is a defense in U. S. courts even when “the first sale occurred abroad,” 523 U. S., at 145, n. 14, has already significantly eroded such a principle.

IV

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.

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[1] JUSTICE KAGAN, with whom JUSTICE ALITO joins, concurring.

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 8–16, 28–31. I recognize, however, that the combination of today’s decision and Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U. S. 135 (1998), constricts the scope of §602(a)(1)’s ban on unauthorized importation. I write to suggest that any problems associated with that limitation come not from our reading of §109(a) here, but from Quality King’s holding that §109(a) limits §602(a)(1).

As the Court explains, the first-sale doctrine has played an integral part in American copyright law for over a century. See ante, at 17–19; Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908). No codification of the doctrine prior to 1976 even arguably limited its application to copies made in the United States. See ante, at 12. And nothing in the text or history of §109(a)—the Copyright Act of 1976’s first-sale provision—suggests that Congress meant to enact the new, geographical restriction John Wiley proposes, which at once would deprive American consumers of important rights and encourage copyright holders to manufacture abroad. See ante, at 8–16, 28–31.

[2] 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 523 U. S., at 151–152. So notwithstanding §602(a)(1), an “owner of a particular copy . . . lawfully made under this title” can import that copy without the copyright owner’s permission. §109(a). In now holding that copies “lawfully made under this title” include copies manufactured abroad, we unavoidably diminish §602(a)(1)’s scope— indeed, limit it to a fairly esoteric set of applications. See ante, at 26–27.

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.^[1] That result would enable the copyright owner to divide international markets in the way John Wiley claims Congress intended when enacting §602(a)(1). But it would do so without imposing down-[3]-stream liability on those who purchase and resell in the United States copies that happen to have been manufactured abroad. In other words, that outcome would target unauthorized importers alone, and not the “libraries, used-book dealers, technology companies, consumer-goods retailers, and museums” with whom the Court today is rightly concerned. Ante, at 19. Assuming Congress adopted §602(a)(1) to permit market segmentation, I suspect that is how Congress thought the provision would work—not by removing first-sale protection from every copy manufactured abroad (as John Wiley urges us to do here), but by enabling the copyright holder to control imports even when the first-sale doctrine applies (as Quality King now prevents).^[2]

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 [4] 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.

---------

Dissenting Opinion

[1] JUSTICE GINSBURG, 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., 310 U. S. 534, 542 (1940). Instead of adhering to the Legislature’s design, the Court today adopts an interpretation of the Copyright Act at odds with Congress’ aim to protect copyright owners against the unauthorized importation of low-priced, foreign made copies of their copyrighted works. The Court’s bold departure from Congress’ design is all the more stunning, for it places the United States at the vanguard of the movement for “international exhaustion” of copyrights—a movement the United States has steadfastly resisted on the world stage.

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 24. The Court’s parade of horribles, however, is largely imaginary. Congress’ objective in enacting 17 U. S. C. §602(a)(1)’s importation prohibition can be honored without generating the absurd consequences hypothesized in the Court’s opinion. I dissent [2] from the Court’s embrace of “international exhaustion,” and would affirm the sound judgment of the Court of Appeals.

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, 210 U. S. 339, 349–351 (1908), which held that a copyright owner could not control the price at which retailers sold lawfully purchased copies of its work. The first sale doctrine recognizes that a copyright owner should not be permitted to exercise perpetual control over the distribution of copies of a copyrighted work. At some point—ordinarily the time of the first commercial sale— [3] the copyright owner’s exclusive right under §106(3) to control the distribution of a particular copy is exhausted, and from that point forward, the copy can be resold or otherwise redistributed without the copyright owner’s authorization.

Section 602(a)(1) (2006 ed., Supp. V)^[1]—last, but most critical, of the three copyright provisions bearing on this case—is an importation ban. It reads:

“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., 523 U. S. 135, 143–154 (1998), the Court held that a copyright owner’s right to control importation under §602(a)(1) is a component of the distribution right set forth in §106(3) and is therefore subject to §109(a)’s codification of the first sale doctrine. Quality King thus held that the importation of copies made in the United States but sold abroad did not rank as copyright infringement under §602(a)(1). Id., at 143–154. See also id., at 154 (GINSBURG, J., concurring) (Quality King “involve[d] a ‘round trip’ journey, travel of the copies in question from the United States to places abroad, then back again”).^[2]

Important to the Court’s holding, the copies at issue in Quality King had been “ ‘lawfully made under [Title 17]’ ”—a prerequisite for application of §109(a). Id., at 143, n. 9 (quoting §109(a)). Section 602(a)(1), the Court noted, would apply to “copies that were ‘lawfully made’ not under the United States Copyright Act, but instead, under the law of some other country.” Id., at 147. Drawing on an example discussed during a 1964 public meeting on proposed revisions to the U. S. copyright laws,^[3] the Court stated:

“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, [4] 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 654 F. 3d 210, 221–222 (CA2 2011); App. to Pet. for Cert. 70a–73a, application of the Quality King analysis to the facts of this case would preclude any invocation of §109(a). Petitioner Supap Kirtsaeng imported and then sold at a profit over 600 copies of copyrighted textbooks printed outside the United States by the Asian subsidiary of respondent John Wiley & Sons, Inc. (Wiley). App. 29– 34. See also ante, at 3–5 (opinion of the Court). In the words the Court used in Quality King, these copies “were ‘lawfully made’ not under the United States Copyright Act, but instead, under the law of some other country.” 523 U. S., at 147. Section 109(a) therefore does not apply, and Kirtsaeng’s unauthorized importation constitutes copyright infringement under §602(a)(1).

The Court does not deny that under the language I have quoted from Quality King, Wiley would prevail. Ante, at 27. Nevertheless, the Court dismisses this language, to which all Members of the Quality King Court subscribed, as ill-considered dictum. Ante, at 27–28. I agree that the discussion was dictum in the sense that it was not essential to the Court’s judgment. See Quality King, 523 U. S., at 154 (GINSBURG, J., concurring) (“[W]e do not today resolve cases in which the allegedly infringing imports were manufactured abroad.”). But I disagree with the Court’s conclusion that this dictum was ill considered. Instead, for the reasons explained below, I would hold, consistently with Quality King’s dictum, that §602(a)(1) authorizes a copyright owner to bar the importation of a copy manufactured abroad for sale abroad.

II

The text of the Copyright Act demonstrates that Congress intended to provide copyright owners with a potent [6] remedy against the importation of foreign-made copies of their copyrighted works. As the Court recognizes, ante, at 3, 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., 554 U. S. 33, 52–53 (2008) (“under” in 11 U. S. C. §1146(a), a Bankruptcy Code provision exempting certain asset transfers from stamp taxes, means “pursuant to”); Ardestani v. INS, 502 U. S. 129, 135 (1991) (the phrase “under section 554” in the Equal Access to Justice Act means “subject to” or “governed by” 5 U. S. C. §554 (internal quotation marks omitted)). It also accords with dictionary definitions of the word “under.” See, e.g., American Heritage Dictionary 1887 (5th ed. 2011) (“under” means, among other things, “[s]ubject to the authority, rule, or control of ”).

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., 208 U. S. 260, 264 (1908) (copyright statute requiring that U. S. copyright notices be placed in all copies of a work did not apply to copies published abroad because U. S. copyright laws have no “force” beyond the United States’ borders); 4 M. Nimmer & D. Nimmer, Copyright §17.02, p. 17–18 (2012) (hereinafter Nimmer) (“[C]opyright laws do not have any extraterritorial operation.”); 4 W. Patry, Copyright §13:22, p. 13–66 (2012) (hereinafter Patry) (“Copyright laws are rigorously territorial.”). The printing of Wiley’s foreign manufactured textbooks therefore was not governed by Title 17. The textbooks thus were not “lawfully made [7] under [Title 17],” the crucial precondition for application of §109(a). And if §109(a) does not apply, there is no dispute that Kirtsaeng’s conduct constituted copyright infringement under §602(a)(1).

The Court’s point of departure is similar to mine. According to the Court, the phrase “ ‘lawfully made under this title’ means made ‘in accordance with’ or ‘in compliance with’ the Copyright Act.” Ante, at 8. But the Court overlooks that, according to the very dictionaries it cites, ante, at 9, 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” “frequently” means “inferior” or “subordinate” (internal quotation marks omitted)); 18 Oxford English Dictionary 950 (2d ed. 1989) (“under” means, among other things, “[i]n accordance with (some regulative power or principle)” (emphasis added)). See also Webster’s Third New International Dictionary 2487 (1961) (“under” means, among other things, “in . . . a condition of subjection, regulation, or subordination” and “suffering restriction, restraint, or control by”). Only by disregarding this established meaning of “under” can the Court arrive at the conclusion that Wiley’s foreign-manufactured textbooks were “lawfully made under” U. S. copyright law, even though that law did not govern their creation. It is anomalous, however, to speak of particular conduct as “lawful” under an inapplicable law. For example, one might say that driving on the right side of the road in England is “lawful” under U. S. law, but that would be so only because U. S. law has nothing to say about the subject. The governing law is English law, and English law demands that driving be done on the left side of the road.^[4]

[8] 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 8 (“§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 counterfactual 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 phonorecords, 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 phonorecords under section 106.” (emphasis added)); §602(b) (“In a case where the making [9] 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, 464 U. S. 16, 23 (1983) (“ ‘[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.’ ” (quoting United States v. Wong Kim Bo, 472 F. 2d 720, 722 (CA5 1972) (per curiam); brackets in original)).^[5]

[10] 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 26, 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)).^[6] If this is enough to avoid rendering §602(a)(1) entirely “superfluous,” ante, at 26, it hardly suffices to give the owner’s importation right the scope Congress intended it to have. Congress used broad language in §602(a)(1); it did so to achieve a broad objective. Had Congress intended simply to provide a copyright remedy against larcenous lessees, licensees, consignees, and bailees of films and other copyright-protected goods, see ante, at 13–14, 26, it likely would have used language tailored to that narrow purpose. See 2 Nimmer §8.12[B][6][c], at 8–184.31, n. 432 (“It may be wondered whether . . . potential causes of action [against licensees and the like] are more than theoretical.”). See also ante, at 2 (KAGAN, J., concurring) (the Court’s decision limits §602(a)(1) “to a fairly esoteric set of [11] applications”).^[7]

The Court’s decision also overwhelms 17 U. S. C. §602(a)(3)’s exceptions to §602(a)(1)’s importation prohibition. 2 P. Goldstein, Copyright §7.6.1.2(a), p. 7:141 (3d ed. 2012) (hereinafter Goldstein).^[8] Those exceptions permit the importation of copies without the copyright owner’s authorization for certain governmental, personal, scholarly, educational, and religious purposes. 17 U. S. C. §602(a)(3). Copies imported under these exceptions “will often be lawfully made gray market goods purchased through normal market channels abroad.” 2 Goldstein [12] §7.6.1.2(a), at 7:141.^[9] But if, as the Court holds, such copies can in any event be imported by virtue of §109(a), §602(a)(3)’s work has already been done. For example, had Congress conceived of §109(a)’s sweep as the Court does, what earthly reason would there be to provide, as Congress did in §602(a)(3)(C), that a library may import “no more than five copies” of a non-audiovisual work for its “lending or archival purposes”?

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, 534 U. S. 19, 31 (2001) (“It is a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.” (internal quotation marks omitted)). In the range of circumstances covered by the exceptions, §602(a)(3) frees individuals and entities who purchase foreign-made copies abroad from the requirement they would otherwise face under §602(a)(1) of obtaining the copyright owner’s permission to import the copies into the United States.^[10]

[13] III

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, 469 U. S. 153, 159–160 (1985). In its initial 1961 report on recommended revisions, the Copyright Office noted that publishers had “suggested that the [then-existing] import ban on piratical copies should be extended to bar the importation of . . . foreign edition[s]” in violation of “agreements to divide international markets for copyrighted works.” Copyright Law Revision: Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law, 87th Cong., 1st Sess., 126 (H. R. Judiciary Comm. Print 1961) (hereinafter Copyright Law Revision). See Copyright Act of 1947, §106, 61 Stat. 663 (“The importation into the United States . . . of any piratical copies of any work copyrighted [14] in the United States . . . is prohibited.”). The Copyright Office originally recommended against such an extension of the importation ban, reasoning that enforcement of territorial restrictions was best left to contract law. Copyright Law Revision 126.

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 [15] 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 [i.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 [16] 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).^[11]

The next step in the copyright revision process was the introduction in Congress of a draft bill on July 20, 1964. See Copyright Law Revision Part 5: 1964 Revision Bill with Discussions and Comments, 89th Cong., 1st Sess., III (H. R. Judiciary Comm. Print 1965). After another round of public comments, a revised bill was introduced on February 4, 1965. 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., V (H. R. Judiciary Comm. Print 1965) (hereinafter Copyright Law Revision Part 6). In language closely resembling the statutory text later enacted by Congress, §602(a) of the 1965 bill provided:

“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]

[17] The Court implies that the 1965 bill’s “explici[t] refer[ence] to §106” showed a marked departure from §44(a) of the Copyright Office’s prior draft. Ante, at 29. 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 15–16, 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 phonorecords made without any authorization of the [18] copyright owner), and unauthorized importation of copies or phonorecords 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 28. To the contrary, it confirms what the plain text of the Act conveys: Congress intended §602(a)(1) to provide copyright owners with a remedy against the unauthorized importation of foreign-made copies of their works, even if those copies were made and sold abroad with the copyright owner’s authorization.^[13]

IV

Unlike the Court’s holding, my position is consistent with the stance the United States has taken in international trade negotiations. This case bears on the highly contentious trade issue of interterritorial exhaustion. The issue arises because intellectual property law is territorial in nature, see supra, at 6, 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 con-[19]-sensus 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,”^[14] provided in Article 6 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Apr. 15, 1994, 33 I. L. M. 1197, 1200, that “nothing in this Agreement shall be used to address the issue of . . . exhaustion.” See Chiappetta 346 (observing that exhaustion of intellectual property rights was “hotly debated” during the TRIPS negotiations and that Article 6 “reflects [the negotiators’] ultimate inability to agree” on a single international standard). Similar language appears in other treaties to which the United States is a party. See World Intellectual Property Organization (WIPO) Copyright Treaty, Art. 6(2), Dec. 20, 1996, S. Treaty Doc. No. 105–17, p. 7 (“Nothing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right [to control distribution of copies of a copyrighted work] applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.”); WIPO Performances and Phonograms Treaty, Art. 8(2), Dec. 20, 1996, S. Treaty Doc. No. 105–17, p. 28 (containing language nearly identical to Article 6(2) of the WIPO Copyright Treaty).

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 [20] 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 right everywhere with respect to that copy. See ibid. The European Union has adopted the intermediate approach of regional exhaustion, under which the sale of a copy anywhere within the European Economic Area exhausts the copyright owner’s distribution right throughout that region. See id., at 430, 445. Section 602(a)(1), in my view, ties the United States to a national-exhaustion framework. The Court’s decision, in contrast, places the United States solidly in the international­ exhaustion camp.

Strong arguments have been made both in favor of, and in opposition to, international exhaustion. See Chiappetta 360 (“[r]easonable 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 (herein-[21]-after Quality King Brief).^[15] Accordingly, the United States has steadfastly “taken the position in international trade negotiations that domestic copyright owners should . . . have the right to prevent the unauthorized importation of copies of their work sold abroad.” Id., at 22. The United States has “advanced this position in multilateral trade negotiations,” including the negotiations on the TRIPS Agreement. Id., at 24. See also D. Gervais, The TRIPS Agreement: Drafting History and Analysis §2.63, p. 199 (3d ed. 2008). It has also taken a dim view of our trading partners’ adoption of legislation incorporating elements of international exhaustion. See Clapperton & Corones, Locking in Customers, Locking Out Competitors: Anti-Circumvention Laws in Australia and Their Potential Effect on Competition in High Technology Markets, 30 Melbourne U. L. Rev. 657, 664 (2006) (United States expressed concern regarding international-exhaustion legislation in Australia); Montén, Comment, The Inconsistency Between Section 301 and TRIPS: Counterproductive With Respect to the Future of International Protection of Intellectual Property Rights? 9 Marq. Intellectual [21] Property L. Rev. 387, 417–418 (2005) (same with respect to New Zealand and Taiwan).

Even if the text and history of the Copyright Act were ambiguous on the answer to the question this case presents— which they are not, see Parts II–III, supra^[16]—I would resist a holding out of accord with the firm position the United States has taken on exhaustion in international negotiations. Quality King, I acknowledge, discounted the Government’s concerns about potential inconsistency with United States obligations under certain bilateral trade agreements. See 523 U. S., at 153–154. See also Quality King Brief 22–24 (listing the agreements). That decision, however, dealt only with copyright-protected products made in the United States. See 523 U. S., at 154 (GINSBURG, J., concurring). Quality King left open the question whether owners of U. S. copyrights could retain control over the importation of copies manufactured and sold abroad—a point the Court obscures, see ante, at 33 (arguing that Quality King “significantly eroded” the national-exhaustion principle that, in my view, §602(a)(1) embraces). The Court today answers that question with a resounding “no,” and in doing so, it risks undermining the United States’ credibility on the world stage. While the Government has urged our trading partners to refrain from adopting international-exhaustion regimes that could benefit consumers within their borders but would impact adversely on intellectual-property producers in the United States, the Court embraces an international-exhaustion rule that could benefit U. S. consumers but would likely [23] disadvantage foreign holders of U. S. copyrights. This dissonance scarcely enhances the United States’ “role as a trusted partner in multilateral endeavors.” Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer, 515 U. S. 528, 539 (1995).

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 32. See also ante, at 18 (again referring to anti-trust 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., 551 U. S. 877 (2007) (discussing vertical restraints). We have held that vertical restraints are not per se illegal under §1 of the Sherman Act, 15 U. S. C. §1, because such “restraints can have procompetitive effects.” 551 U. S., at 881–882.^[17]

[24] B

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 22 (internal quotation marks omitted). If §109(a) excluded foreign-made copies, the Court fears, then copyright owners could exercise perpetual control over 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 muse ums, and prevent the resale of a wide range of consumer goods, from cars to calculators. Ante, at 19–22. See also ante, at 2–3 (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.^[18]

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 2, the Court stated that doctrine initially in its 1908 Bobbs-[25]-Merrill decision. At that time, no statutory provision expressly codified the first sale doctrine. Instead, copy right 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.” 210 U. S., at 349–350. “[O]ne who has sold a copyrighted article . . . without restriction,” the Court explained, “has parted with all right to control the sale of it.” Id., at 350. Thus, “[t]he purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.” Ibid.

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 without further authorization from the copyright owner. Although §106(3) uses the word “distribute” rather than “vend,” there is no reason to think Congress intended the word “distribute” to bear a meaning different from the construction the Court gave to the word “vend” in Bobbs-Merrill. See ibid. (emphasizing that the question before the Court was “purely [one] of statutory construction”).^[19] [26] Thus, in accord with Bobbs-Merrill, the first authorized distribution of a foreign-made copy in the United States exhausts the copyright owner’s distribution right under §106(3). After such an authorized distribution, a library may lend, or a used-book dealer may resell, the foreign made copy without seeking the copyright owner’s permission. Cf. ante, at 19–21.

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.^[20] Section 109(a), however, does serve [27] as a statutory bulwark against courts deviating from Bobbs-Merrill in a way that increases copyright owners’ control over downstream distribution, and legislative history indicates that is precisely the role Congress intended §109(a) to play. Congress first codified the first sale doctrine in §41 of the Copyright Act of 1909, 35 Stat. 1084.^[21] It did so, the House Committee Report on the 1909 Act explains, “in order to make . . . clear that [Congress had] no intention [of] enlarg[ing] in any way the construction to be given to the word ‘vend.’ ” H. R. Rep. No. 2222, 60th Cong., 2d Sess., 19 (1909). According to the Committee Report, §41 was “not intended to change [exist ing law] in any way.” Ibid. The position I have stated and explained accords with this expression of congressional intent. In enacting §41 and its successors, I would hold, Congress did not “change . . . existing law,” ibid., by stripping the word “vend” (and thus its substitute “distribute”) of the limiting construction imposed in Bobbs-Merrill.

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)(1)’s role. See supra, at 10–12. My position in no way tugs against the principle underlying §109(a)—i.e., that certain conduct by the copyright owner exhausts the [28] 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 non-audiovisual work— notably, a book—for “library lending or archival purposes.” But cf. ante, at 19–20 (suggesting that affirming the Second Circuit’s decision might prevent libraries from lending foreign-made books).^[22]

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 22 (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.^[23] That provision addresses exhaustion of [29] a copyright owner’s exclusive right under §106(5) to publicly display the owner’s work. Because §109(c), like §109(a), applies only to copies “lawfully made under this title,” amici contend that a ruling in Wiley’s favor would prevent museums from invoking §109(c) with respect to foreign-made works of art. Id., at 11–13.^[24]

Limiting §109(c) to U. S.-made works, however, does not bar art museums from lawfully displaying works made in other countries. Museums can, of course, seek the copyright owner’s permission to display a work. Furthermore, the sale of a work of art to a U. S. museum may carry with it an implied license to publicly display the work. See 2 Patry §5:131, at 5–280 (“[C]ourts have noted the potential availability of an implied nonexclusive licens[e] when the circumstances . . . demonstrate that the parties intended that the work would be used for a specific purpose.”). Displaying a work of art as part of a museum exhibition might also qualify as a “fair use” under 17 U. S. C. §107. Cf. Bouchat v. Baltimore Ravens Ltd. Partnership, 619 F. 3d 301, 313–316 (CA4 2010) (display of copyrighted logo in museum-like exhibition constituted “fair use”).

The Court worries about the resale of foreign-made consumer goods “contain[ing] copyrightable software programs or packaging.” Ante, at 21. 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 [30] license (to the extent that express licenses do not exist) would likely permit the car to be resold without the copyright owners’ authorization.^[25]

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., 569 F. Supp. 47, 49 (ED Pa. 1983), summarily aff ’d, 738 F. 2d 424 (CA3 1984) (table). Yet Kirtsaeng and his supporting amici cite not a single case in which the owner of a consumer good authorized for sale in the United States has been sued for copyright infringement after reselling the item or giving it away as a gift or to charity. The absence of such lawsuits is unsurprising. Routinely suing one’s customers is hardly a best business [31] practice.^[26] Manufacturers, moreover, may be hesitant to do business with software programmers taken to suing consumers. Manufacturers may also insist that software programmers agree to contract terms barring such lawsuits.

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 23. Uncertainty generated by these conflicting decisions, the Court notes, may have deterred some copyright owners from pressing infringement claims. Ante, at 23–24. 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 24.^[27] They surely do not warrant disregard-[32]-ing Congress’ intent, expressed in §602(a)(1), to grant copyright owners the authority to bar the importation of foreign-made copies of their works. Cf. Hartford Underwriters Ins. Co. v. Union Planters Bank, N. A., 530 U. S. 1, 6 (2000) (“[W]hen the statute’s language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms.” (internal quotation marks omitted)).

VI

To recapitulate, the objective of statutory interpretation is “to give effect to the intent of Congress.” American Trucking Assns., 310 U. S., at 542. Here, two congressional aims are evident. First, in enacting §602(a)(1), Congress intended to grant copyright owners permission to segment international markets by barring the importation of foreign-made copies into the United States. Second, as codification of the first sale doctrine underscores, Congress did not want the exclusive distribution right conferred in §106(3) to be boundless. Instead of harmonizing these objectives, the Court subordinates the first entirely to the second. It is unsurprising that none of the three major treatises on U. S. copyright law embrace the Court’s construction of §109(a). See 2 Nimmer §8.12[B][6][c], at [33] 8–184.34 to 8–184.35; 2 Goldstein §7.6.1.2(a), at 7:141; 4 Patry §§13:22, 13:44, 13:44.10.

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 case infringed Wiley’s copyrights. I would therefore affirm the Second Circuit’s judgment.

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[1] Although Quality King concluded that the statute’s text foreclosed that outcome, see 523 U. S., at 151–152, the Solicitor General offered a cogent argument to the contrary. He reasoned that §109(a) does not limit §602(a)(1) because the former authorizes owners only to “sell” or “dispose” of copies—not to import them: The Act’s first-sale provision and its importation ban thus regulate separate, non-overlapping spheres of conduct. See Brief for United States as Amicus Curiae in Quality King, O. T. 1996, No. 96–1470, pp. 5, 8–10. That reading remains the Government’s preferred way of construing the statute. See Tr. of Oral Arg. 44 (“[W]e think that we still would adhere to our view that section 109(a) should not be read as a limitation on section 602(a)(1)”); see also ante, at 32–33; post, at 21, n. 15 (GINSBURG, J., dissenting).

[2] 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 pre- vent 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.

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[1] 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.

[2] Although JUSTICE KAGAN’s concurrence suggests that Quality King erred in “holding that §109(a) limits §602(a)(1),” ante, at 2, that recent, unanimous holding must be taken as a given. See John R. Sand & Gravel Co. v. United States, 552 U. S. 130, 139 (2008) (“[S]tare decisis in respect to statutory interpretation has ‘special force,’ for ‘Congress remains free to alter what we have done.’ ” (quoting Patterson v. McLean Credit Union, 491 U. S. 164, 172–173 (1989))). The Court’s objective in this case should be to avoid unduly “constrict[ing] the scope of §602(a)(1)’s ban on unauthorized importation,” ante, at 1 (opinion of KAGAN, J.), while at the same time remaining faithful to Quality King’s holding and to the text and history of other Copyright Act provisions. This aim is not difficult to achieve. See Parts II–V, infra. JUSTICE KAGAN and I appear to agree to this extent: Congress meant the ban on unauthorized importation to have real force. See ante, at 3 (acknowledging that “Wiley may have a point about what §602(a)(1) was designed to do”).

[3] See Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U. S. 135, 148, n. 20 (1998) (quoting Copyright Law Revision Part 4: Further Discussions and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong., 2d Sess., 119 (H. R. Judiciary Comm. Print 1964) (hereinafter Copyright Law Revision Part 4) (statement of Harriet Pilpel)).

[4] The Court asserts that my position gives the word “lawfully” in §109(a) “little, if any, linguistic work to do.” Ante, at 9. 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.

[5] 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 19. 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 6. 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 an 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.

[6] 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, 523 U. S., at 146. In 2008, however, Congress amended §602 to provide for such a cause of action in §602(a)(2), which prohibits the unauthorized “[i]mportation into the United States . . . of copies or phonorecords, the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if [Title 17] had been applicable.” See PROIPA, §105(b)(3), 122 Stat. 4259–4260. Thus, under the Court’s interpretation, the only conduct reached by §602(a)(1) but not §602(a)(2) is a nonowner’s unauthorized importation of a nonpiratical copy.

[7] 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.

[8] Section 602(a)(3) provides:

This subsection [i.e., §602(a)] does not apply to—

(A) importation or exportation of copies or phonorecords 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 phonorecords 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 phonorecords 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).

[9] 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. Andermaned. 2007). Such goods are also commonly called “parallel imports.” Ibid.

[10] 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 10–11. 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. Fur thermore, §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 inapposite to the question here presented. 4 Patry §13:44.10, at 13–129 (“There is no connection, linguistically or substantively, between Section[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.’ ”).

[11] As the Court observes, ante, at 29, 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.

[12] 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).

[13] The Court purports to find support for its position in the House and Senate Committee Reports on the 1976 Copyright Act. Ante, at 30–31. 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.

[14] 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).

[15] 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 33. 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)(1)’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.

[16] 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.”).

[17] Despite the Court’s suggestion to the contrary, this case in no way implicates the per se antitrust prohibition against horizontal “ ‘[a]greements between competitors to allocate territories to minimize competition.’ ” Ante, at 32 (quoting Palmer v. BRG of Ga., Inc., 498 U. S. 46, 49 (1990) (per curiam)). Wiley is not requesting authority to enter into collusive agreements with other textbook publishers that would, for example, make Wiley the exclusive supplier of textbooks on particular subjects within particular geographic regions. Instead, Wiley asserts no more than the prerogative to impose vertical restraints on the distribution of its own textbooks. See Hovenkamp, Post-Sale Restraints and Competitive Harm: The First Sale Doctrine in Perspec tive, 66 N. Y. U. Ann. Survey Am. L. 487, 488 (2011) (“vertical restraints” include “limits [on] the way a seller’s own product can be distributed”).

[18] As the Court observes, ante, at 32–33, the United States stated at oral argument that the types 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)(1)’s ban on unauthorized importation. Ibid.

[19] 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”).

[20] 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, 139 F. 155, 157 (CC SDNY 1905) (the publisher claiming copy- right infringement in Bobbs-Merrill was incorporated and had its principal office in Indiana). See also Copyright Act of 1891, §3, 26 Stat. 1107–1108 (generally prohibiting importation, even by the copyright owner, of foreign-manufactured copies of copyrighted books); 4 Patry §13:40, at 13–111 (under the Copyright Act of 1891, “copies of books by both foreign and U. S. authors had to be printed in the United States”). But cf. ante, at 18 (asserting, without acknowledging the 1891 Copy right Act’s general prohibition against the importation of foreign-made copies of copyrighted books, that the Court is unable to find any “geo graphical distinctions . . . in Bobbs-Merrill ”). Thus, exhaustion occurs under Bobbs-Merrill only when a copy is distributed within the United States with the copyright owner’s permission, not when it is distributed abroad. But under §109(a), as interpreted in Quality King, any author ized distribution of a U. S.-made copy, even a distribution occurring in a foreign country, exhausts the copyright owner’s distribution right under §106(3). See 523 U. S., at 145, n. 14. Section 109(a) therefore provides for exhaustion in a circumstance not reached by Bobbs-Merrill.

[21] 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 2, 17 U. S. C. §109(a) sets out the current codification of the first sale doctrine.

[22] 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 non-audiovisual 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.

[23] 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.”

[24]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 “includ[e] the material object . . . in which the work is first fixed.” §101.

[25] 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 15. (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)(1)’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)).

[26] 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 car’s value, and thus the price they are willing to pay for such a car, might fall—an outcome hardly favorable to automobile manufacturers.

[27] 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.

Richard Stephen Mandel, Jonathan Zachary King, and Robert William Clarida of Cowan, Liebowitz & Latmant P.C., New York, NY, for Plaintiff.

Gary Philip Adelman of Davis Shapiro Lewit & Hayes LLP, New York, NY, for Defendant.

Memorandum and Order

RICHARD J. SULLIVAN, District Judge.

Capitol Records, LLC (Capitol), the recording label for such classic vinyls as [645] Frank Sinatra's Come Fly With Me and The Beatles' Yellow Submarine, brings this action against ReDigi Inc. (ReDigi), a twenty-first century technology company that touts itself as a virtual marketplace for pre-owned digital music. What has ensued in a fundamental clash over culture, policy, and copyright law, with Capitol alleging that ReDigi's web-based service amounts to copyright infringement in violation of the Copyright Act of 1976 (the Copyright Act), 17 U.S.C. 101 et seq. Now before the Court are Capitol's motion for partial summary judgment and ReDigi's motion for summary judgment, both filed pursuant to Federal Rule of Civil Procedure 56. Because this is a court of law and not a congressional subcommittee or technology blog, the issues are narrow, technical, and purely legal. Thus, for the reasons that follow, Capitol's motion is granted and ReDigi's motion is denied.

I. Background

A. Facts

ReDigi markets itself as the world's first and only online marketplace for digital used music. ^[1] (Capitol 56.1 Stmt., Doc. No. 50 (Cap. 56.1), 6.) Launched on October 13, 2011, ReDigi's website invites users to sell their legally acquired digital music files, and buy used digital music from others at a fraction of the price currently available on iTunes. ( Id. 6, 9.) Thus, much like used record stores, ReDigi permits its users to recoup value on their unwanted music. Unlike used record stores, however, ReDigi's sales take place entirely in the digital domain. ( See ReDigi Reply 56.1 Stmt., Doc. No. 83 (RD Rep. 56.1), 4 16.)

To sell music on ReDigi's website, a user must first download ReDigi's Media Manager to his computer. (ReDigi 56.1 Stmt., Doc. No. 56 (RD 56.1), 8.) Once installed, Media Manager analyzes the user's computer to build a list of digital music files eligible for sale. ( Id.) A file is eligible only if it was purchased on iTunes or from another ReDigi user; music downloaded from a CD or other file-sharing website is ineligible for sale. ( Id.) After this validation process, Media Manager continually runs on the user's computer and attached devices to ensure that the user has not retained music that has been sold or uploaded for sale. ( Id. 10.) However, Media Manager cannot detect copies stored in other locations. (Cap. 56.1 5961, 63; see Capitol Reply 56.1 Stmt., Doc. No. 78 (Cap. Rep. 56.1), 10.) If a copy is detected, Media Manager prompts the user to delete the file. (Cap. 56.1 64.) The file is not deleted automatically or involuntarily, though ReDigi's policy is to suspend the accounts of users who refuse to comply. ( Id.)

After the list is built, a user may upload any of his eligible files to ReDigi's Cloud Locker, an ethereal moniker for what is, in fact, merely a remote server in Arizona. (RD 56.1 9, 11; Cap. 56.1 22.) ReDigi's upload process is a source of contention between the parties. ( See RD 56.1 1423; Cap. Rep. 56.1 1423.) ReDigi asserts that the process involves migrating a user's file, packet by packetanalogous to a trainfrom the user's computer to the Cloud Locker so that data does not exist in two places at any one time.^[2] (RD 56.1 14, 36.) Capitol asserts [646] that, semantics aside, ReDigi's upload process necessarily involves copying a file from the user's computer to the Cloud Locker. (Cap. Rep. 56.1 14.) Regardless, at the end of the process, the digital music file is located in the Cloud Locker and not on the user's computer. (RD 56.1 21.) Moreover, Media Manager deletes any additional copies of the file on the user's computer and connected devices. ( Id. 38.)

Once uploaded, a digital music file undergoes a second analysis to verify eligibility. (Cap. 56.1 3132.) If ReDigi determines that the file has not been tampered with or offered for sale by another user, the file is stored in the Cloud Locker, and the user is given the option of simply storing and streaming the file for personal use or offering it for sale in ReDigi's marketplace. ( Id. 3337.) If a user chooses to sell his digital music file, his access to the file is terminated and transferred to the new owner at the time of purchase. ( Id. 49.) Thereafter, the new owner can store the file in the Cloud Locker, stream it, sell it, or download it to her computer and other devices. ( Id. 50.) No money changes hands in these transactions. (RD Rep. 56.15 18.) Instead, users buy music with credits they either purchased from ReDigi or acquired from other sales. ( Id.) ReDigi credits, once acquired, cannot be exchanged for money. ( Id.) Instead, they can only be used to purchase additional music. ( Id.)

To encourage activity in its marketplace, ReDigi initially permitted users to preview thirty-second clips and view album cover art of songs posted for sale pursuant to a licensing agreement with a third party. ( See RD 56.1 7378.) However, shortly after its launch, ReDigi lost the licenses. ( Id.) Accordingly, ReDigi now sends users to either YouTube or iTunes to listen to and view this promotional material. ( Id. 77, 79.) ReDigi also offers its users a number of incentives. (Cap. 56.1 39.) For instance, ReDigi gives twenty-cent credits to users who post files for sale and enters active sellers into contests for prizes. ( Id. 39, 42.) ReDigi also encourages sales by advising new users via email that they can [c]ash in their music on the website, tracking and posting the titles of sought after songs on its website and in its newsletter, notifying users when they are low on credits and advising them to either purchase more credits or sell songs, and connecting users who are seeking unavailable songs with potential sellers. ( Id. 3948.)

Finally, ReDigi earns a fee for every transaction. ( Id. 54.) ReDigi's website prices digital music files at fifty-nine to seventy-nine cents each. ( Id. 55.) When users purchase a file, with credits, 20% of the sale price is allocated to the seller, 20% goes to an escrow fund for the artist, and 60% is retained by ReDigi.^[3] ( Id.)

B. Procedural History

Capitol, which owns a number of the recordings sold on ReDigi's website, commenced [647] this action by filing the Complaint on January 6, 2012. ( See Complaint, dated Jan. 5, 2012, Doc. No. 1 (Compl.); Cap. 56.1 6873.) In its Complaint, Capitol alleges multiple violations of the Copyright Act, 17 U.S.C. 101, et seq., including direct copyright infringement, inducement of copyright infringement, contributory and vicarious copyright infringement, and common law copyright infringement. (Compl. 4488.) Capitol seeks preliminary and permanent injunctions of ReDigi's services, as well as damages, attorney's fees and costs, interest, and any other appropriate relief. ( Id. at 1718.) On February 6, 2012, the Court denied Capitol's motion for a preliminary injunction, finding that Capitol had failed to establish irreparable harm. (Doc. No. 26.)

On July 20, 2012, Capitol filed its motion for partial summary judgment on the claims that ReDigi directly and secondarily infringed Capitol's reproduction and distribution rights. (Doc. No. 48.) ReDigi filed its cross-motion the same day, seeking summary judgment on all grounds of liability, including ReDigi's alleged infringement of Capitol's performance and display rights.^[4] (Doc. No. 54.) Both parties responded on August 14, 2012 and replied on August 24, 2012. (Doc. Nos. 76, 79, 87, 90.) The Court heard oral argument on October 5, 2012.

II. Legal Standard

Pursuant to Federal Rule of Civil Procedure 56(a), a court may not grant a motion for summary judgment unless the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 32223, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the burden of showing that it is entitled to summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court is not to weigh evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw all reasonable inferences in favor of that party, and to eschew credibility assessments. Amnesty Am. v. Town of W. Hartford, 361 F.3d 113, 122 (2d Cir.2004) (internal quotation marks omitted); accord Anderson, 477 U.S. at 249, 106 S.Ct. 2505. As such, if there is any evidence in the record from any source from which a reasonable inference in the [nonmoving party's] favor may be drawn, the moving party simply cannot obtain a summary judgment. Binder & Binder PC v. Barnhart, 481 F.3d 141, 148 (2d Cir.2007) (internal quotation marks omitted).

Inferences and burdens of proof on cross-motions for summary judgment are the same as those for a unilateral motion. See Straube v. Fla. Union Free Sch. Dist., 801 F.Supp. 1164, 1174 (S.D.N.Y.1992). That is, each cross-movant must present sufficient evidence to satisfy its burden of proof on all material facts. U.S. Underwriters Ins. Co. v. Roka LLC, No. 99 Civ. 10136(AGS), 2000 WL 1473607, at *3 (S.D.N.Y. Sept. 29, 2000); see Barhold v. Rodriguez, 863 F.2d 233, 236 (2d Cir.1988).

[648] III. Discussion

Section 106 of the Copyright Act grants the owner of copyright under this title certain exclusive rights, including the right to reproduce the copyrighted work in copies or phonorecords, to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, and to publicly perform and display certain copyrighted works. 17 U.S.C. 106(1), (3)-(5). However, these exclusive rights are limited by several subsequent sections of the statute. Pertinently, Section 109 sets forth the first sale doctrine, which provides that the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. Id. 109(a). The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine. The Court determines that it cannot.

A. Infringement of Capitol's Copyrights

To state a claim for copyright infringement, a plaintiff must establish that it owns a valid copyright in the work at issue and that the defendant violated one of the exclusive rights the plaintiff holds in the work. Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd., 996 F.2d 1366, 1372 (2d Cir.1993) (citing Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991)). It is undisputed that Capitol owns copyrights in a number of the recordings sold on ReDigi's website. ( See Cap. 56.1 6873; RD Rep. 56.11819, 6873; Decl. of Richard S. Mandel, dated July 19, 2012, Doc. No. 52 (Mandel Decl.), 16, Ex. M; Decl. of Alasdair J. McMullan, dated July 19, 2012, Doc. No. 51 (McMullan Decl.), 35, Ex. 1.) It is also undisputed that Capitol did not approve the reproduction or distribution of its copyrighted recordings on ReDigi's website. Thus, if digital music files are reproduce[d] and distribute[d] on ReDigi's website within the meaning of the Copyright Act, Capitol's copyrights have been infringed.

1. Reproduction Rights

Courts have consistently held that the unauthorized duplication of digital music files over the Internet infringes a copyright owner's exclusive right to reproduce. See, e.g., A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir.2001). However, courts have not previously addressed whether the unauthorized transfer of a digital music file over the Internetwhere only one file exists before and after the transferconstitutes reproduction within the meaning of the Copyright Act. The Court holds that it does.

The Copyright Act provides that a copyright owner has the exclusive right to reproduce the copyrighted work in ... phonorecords. 17 U.S.C. 106(1) (emphasis added). Copyrighted works are defined to include, inter alia, sound recordings, which are works that result from the fixation of a series of musical, spoken, or other sounds. Id. 101. Such works are distinguished from their material embodiments. These include phonorecords, which are the material objects in which sounds ... are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Id. 101 (emphasis added). Thus, the plain text of the Copyright Act makes clear that reproduction occurs when a copyrighted work is fixed in a new material object. [649] See Matthew Bender & Co., Inc. v. W. Pub. Co., 158 F.3d 693, 703 (2d Cir.1998).

The legislative history of the Copyright Act bolsters this reading. The House Report on the Copyright Act distinguished between sound recordings and phonorecords, stating that [t]he copyrightable work comprises the aggregation of sounds and not the tangible medium of fixation. Thus, sound recordings' as copyrightable subject matter are distinguished from phonorecords[,] the latter being physical objects in which sounds are fixed. H.R.Rep. No. 941476, at 56 (1976), 1976 U.S.C.C.A.N. 5659, 5669. Similarly, the House and Senate Reports on the Act both explained:

Read together with the relevant definitions in [S]ection 101, the right to reproduce the copyrighted work in copies or phonorecords means the right to produce a material object in which the work is duplicated, transcribed, imitated, or simulated in a fixed form from which it can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

Id. at 61, 1976 U.S.C.C.A.N. at 5675; S.Rep. No. 94473, at 58 (1975). Put differently, the reproduction right is the exclusive right to embody, and to prevent others from embodying, the copyrighted work (or sound recording) in a new material object (or phonorecord). See Nimmer on Copyright 8.02 (stating that in order to infringe the reproduction right, the defendant must embody the plaintiff's work in a material object ).

Courts that have dealt with infringement on peer-to-peer (P2P) file-sharing systems provide valuable guidance on the application of this right in the digital domain. For instance, in LondonSire Records, Inc. v. John Doe 1, the court addressed whether users of P2P software violated copyright owners' distribution rights. 542 F.Supp.2d 153, 166 & n. 16 (D.Mass.2008). Citing the material object requirement, the court expressly differentiated between the copyrighted workor digital music fileand the phonorecordor appropriate segment of the hard disk that the file would be embodied in following its transfer. Id. at 171. Specifically,

[w]hen a user on a [P2P] network downloads a song from another user, he receives into his computer a digital sequence representing the sound recording. That sequence is magnetically encoded on a segment of his hard disk (or likewise written on other media). With the right hardware and software, the downloader can use the magnetic sequence to reproduce the sound recording. The electronic file (or, perhaps more accurately, the appropriate segment of the hard disk) is therefore a phonorecord within the meaning of the statute.

Id. (emphasis added). Accordingly, when a user downloads a digital music file or digital sequence to his hard disk, the file is reproduce[d] on a new phonorecord within the meaning of the Copyright Act. Id.

This understanding is, of course, confirmed by the laws of physics. It is simply impossible that the same material object can be transferred over the Internet. Thus, logically, the court in LondonSire noted that the Internet transfer of a file results in a material object being created elsewhere at its finish. Id. at 173. Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the Internet, the Court determines that the embodiment of a digital music file on a new hard disk is a reproduction [650] within the meaning of the Copyright Act.

This finding holds regardless of whether one or multiple copies of the file exist. LondonSire, like all of the P2P cases, obviously concerned multiple copies of one digital music file. But that distinction is immaterial under the plain language of the Copyright Act. Simply put, it is the creation of a new material object and not an additional material object that defines the reproduction right. The dictionary defines reproduction to mean, inter alia, to produce again or to cause to exist again or anew. See MerriamWebster Collegiate Edition 994 (10th ed. 1998) (emphasis added). Significantly, it is not defined as to produce again while the original exists. Thus, the right to reproduce the copyrighted work in ... phonorecords is implicated whenever a sound recording is fixed in a new material object, regardless of whether the sound recording remains fixed in the original material object.

Given this finding, the Court concludes that ReDigi's service infringes Capitol's reproduction rights under any description of the technology. ReDigi stresses that it migrates a file from a user's computer to its Cloud Locker, so that the same file is transferred to the ReDigi server and no copying occurs.^[5] However, even if that were the case, the fact that a file has moved from one material objectthe user's computerto anotherthe ReDigi servermeans that a reproduction has occurred. Similarly, when a ReDigi user downloads a new purchase from the ReDigi website to her computer, yet another reproduction is created. It is beside the point that the original phonorecord no longer exists. It matters only that a new phonorecord has been created.

ReDigi struggles to avoid this conclusion by pointing to C.M. Paula Co. v. Logan, a 1973 case from the Northern District of Texas where the defendant used chemicals to lift images off of greeting cards and place them on plaques for resale. 355 F.Supp. 189, 190 (N.D.Tex.1973); ( see ReDigi Mem. of Law, dated July 20, 2012, Doc. No. 55 (ReDigi Mem.), at 13). The court determined that infringement did not occur because should defendant desire to make one hundred ceramic plaques ..., defendant would be required to purchase one hundred separate ... prints. C.M. Paula, 355 F.Supp. at 191. ReDigi argues that, like the defendant in C.M. Paula, its users must purchase a song on iTunes in order to sell a song on ReDigi. (ReDigi Mem. 13.) Therefore, no duplication occurs. See C.M. Paula, 355 F.Supp. at 191 (internal quotation marks omitted). ReDigi's argument is unavailing. Ignoring the questionable merits of the court's holding in C.M. Paula, ReDigi's service is distinguishable from the process in that case. There, the copyrighted print, or material object, was lifted from the greeting card [651] and transferred in toto to the ceramic tile; no new material object was created. By contrast, ReDigi's service by necessity creates a new material object when a digital music file is either uploaded to or downloaded from the Cloud Locker.

ReDigi also argues that the Court's conclusion would lead to irrational outcomes, as it would render illegal any movement of copyrighted files on a hard drive, including relocating files between directories and defragmenting. (ReDigi Opp'n, dated Aug. 14, 2012, Doc. No. 79 (ReDigi Opp'n), at 8.) However, this argument is nothing more than a red herring. As Capitol has conceded, such reproduction is almost certainly protected under other doctrines or defenses, and is not relevant to the instant motion. (Cap. Reply, dated Aug. 24, 2012, Doc. No. 87 (Cap. Reply), at 5 n. 1.)

Accordingly, the Court finds that, absent the existence of an affirmative defense, the sale of digital music files on ReDigi's website infringes Capitol's exclusive right of reproduction.

2. Distribution Rights

In addition to the reproduction right, a copyright owner also has the exclusive right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership. 17 U.S.C. 106(3). Like the court in LondonSire, the Court agrees that [a]n electronic file transfer is plainly within the sort of transaction that 106(3) was intended to reach [and] ... fit[s] within the definition of distribution of a phonorecord. LondonSire, 542 F.Supp.2d at 17374. For that reason, courts have not hesitated to find copyright infringement by distribution in cases of file-sharing or electronic transmission of copyrighted works. Arista Records LLC v. Greubel, 453 F.Supp.2d 961, 968 (N.D.Tex.2006) (collecting cases); see, e.g., Napster, 239 F.3d at 1014. Indeed, in New York Times Co., Inc. v. Tasini, the Supreme Court stated it was clear that an online news database violated authors' distribution rights by selling electronic copies of their articles for download. 533 U.S. 483, 498, 121 S.Ct. 2381, 150 L.Ed.2d 500 (2001).

There is no dispute that sales occurred on ReDigi's website. Capitol has established that it was able to buy more than one-hundred of its own recordings on ReDigi's webite, and ReDigi itself compiled a list of its completed sales of Capitol's recordings. (Cap. 56.1 6873; RD Rep. 56.1 6873.) ReDigi, in fact, does not contest that distribution occurs on its websiteit only asserts that the distribution is protected by the fair use and first sale defenses. ( See, e.g., ReDigi Opp'n 15 (noting that any distributions ... which occur on the ReDigi marketplace are protected).)

Accordingly, the Court concludes that, absent the existence of an affirmative defense, the sale of digital music files on ReDigi's website infringes Capitol's exclusive right of distribution.^[6]

[652] 3. Performance and Display Rights

Finally, a copyright owner has the exclusive right, in the case of ... musical ... works, to perform the copyrighted work publicly. 17 U.S.C. 106(4). Public performance includes transmission to the public regardless of whether the members of the public ... receive it in the same place or in separate places and at the same time or at different times. Id. 101. Accordingly, audio streams are performances because a stream is an electronic transmission that renders the musical work audible as it is received by the client-computer's temporary memory. This transmission, like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously with the transmission. United States v. Am. Soc. Of Composers, Authors, & Publishers, 627 F.3d 64, 74 (2d Cir.2010). To state a claim for infringement of the performance right, a plaintiff must establish that (1) the public performance or display of the copyrighted work was for profit, and (2) the defendant lacked authorization from the plaintiff or the plaintiff's representative. See Broad. Music, Inc. v., 315 W. 44th St. Rest. Corp., No. 93 Civ. 8082(MBM), 1995 WL 408399, at *2 (S.D.N.Y. July 11, 1995).

The copyright owner also has the exclusive right, in the case of ... pictorial [and] graphic ... works[,] ... to display the copyrighted work publicly. 17 U.S.C. 106(5). Public display includes show[ing] a copy of [a work], either directly or by means of a film, slide, television image, or any other device or process. Id. 101. The Ninth Circuit has held that the display of a photographic image on a computer may implicate the display right, though infringement hinges, in part, on where the image was hosted. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1160 (9th Cir.2007).

Capitol alleges that ReDigi infringed its copyrights by streaming thirty-second song clips and exhibiting album cover art to potential buyers. (Compl. 2526.) ReDigi counters that it only posted such content pursuant to a licensing agreement and within the terms of that agreement. (ReDigi Mem. 2425.) ReDigi also asserts that it promptly removed the content when its licenses were terminated, and instead sent users to YouTube or iTunes for previews. ( Id.) Capitol, in response, claims that ReDigi's use violated the terms of those licenses and did not cease at the time the licenses were terminated. ( Compare RD 56.1 7379, with Cap. Rep. 56.1 7379.) As such, there are material disputes as to the source of the content, whether ReDigi was authorized to transmit the content, when authorization was or was not revoked, and when ReDigi ceased providing the content. Because the Court cannot determine whether ReDigi infringed Capitol's display and performance rights on the present record, ReDigi's motion for summary judgment on its alleged infringement of these exclusive rights is denied.

B. Affirmative Defenses

Having concluded that sales on ReDigi's website infringe Capitol's exclusive rights of reproduction and distribution, the Court turns to whether the fair use or first sale defenses excuse that infringement. For the reasons set forth below, the Court determines that they do not.

1. Fair Use

The ultimate test of fair use ... is whether the copyright law's goal of promot[ing] the Progress of Science and useful Arts' would be better served by allowing [653] the use than by preventing it. Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 141 (2d Cir.1998) (quoting U.S. Const., art. I, 8, cl. 8). Accordingly, fair use permits reproduction of copyrighted work without the copyright owner's consent for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research. 17 U.S.C. 107. The list is not exhaustive but merely illustrates the types of copying typically embraced by fair use. Castle Rock Entm't, Inc., 150 F.3d at 141. In addition, four statutory factors guide courts' application of the doctrine. Specifically, courts look to:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. 107. Because fair use is an equitable rule of reason, courts are free to adapt the doctrine to particular situations on a case-by-case basis. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 448 n. 31, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984) (quoting H. Rep. No. 941476, at 6566, 1976 U.S.C.C.A.N. at 56795680); see Iowa State Univ. Research Found., Inc. v. Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir.1980).

On the record before it, the Court has little difficulty concluding that ReDigi's reproduction and distribution of Capitol's copyrighted works falls well outside the fair use defense. ReDigi obliquely argues that uploading to and downloading from the Cloud Locker for storage and personal use are protected fair use.^[7] ( See ReDigi Mem. 15.) Significantly, Capitol does not contest that claim. ( See Tr. 12:823.) Instead, Capitol asserts only that uploading to and downloading from the Cloud Locker incident to sale fall outside the ambit of fair use. The Court agrees. See Arista Records, LLC v. Doe 3, 604 F.3d 110, 124 (2d Cir.2010) (rejecting application of fair use to user uploads and downloads on P2P file-sharing network).

Each of the statutory factors counsels against a finding of fair use. The first factor requires the Court to determine whether ReDigi's use transforms the copyrighted work and whether it is commercial. Campbell v. AcuffRose Music, Inc., 510 U.S. 569, 57879, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994). Both inquiries disfavor ReDigi's claim. Plainly, the upload, sale, and download of digital music files on ReDigi's website does nothing to add [ ] something new, with a further purpose or different character to the copyrighted works. Id.; see, e.g., Napster, 239 F.3d at 1015 (endorsing district court finding that downloading MP3 files does not transform the copyrighted work). ReDigi's use is also undoubtedly commercial. ReDigi and the uploading user directly profit from the sale of a digital music file, and the downloading user saves significantly on the price of the song in the primary market. See Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985) (The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying [654] the customary price.). ReDigi asserts that downloads for personal, and not public or commercial, use must be characterized as ... noncommercial, nonprofit activity. (ReDigi Mem. 16 (quoting Sony, 464 U.S. at 449, 104 S.Ct. 774).) However, ReDigi twists the law to fit its facts. When a user downloads purchased files from the Cloud Locker, the resultant reproduction is an essential component of ReDigi's commercial enterprise. Thus, ReDigi's argument is unavailing.

The second factorthe nature of the copyrighted workalso weighs against application of the fair use defense, as creative works like sound recordings are close to the core of the intended copyright protection and far removed from the ... factual or descriptive work more amenable to fair use. UMG Recordings, Inc. v. MP3.Com, Inc., 92 F.Supp.2d 349, 351 (S.D.N.Y.2000) (alteration and internal quotation marks omitted) (citing Campbell, 510 U.S. at 586, 114 S.Ct. 1164). The third factorthe portion of the work copiedsuggests a similar outcome because ReDigi transmits the works in their entirety, negating any claim of fair use. Id. at 352, 114 S.Ct. 1164. Finally, ReDigi's sales are likely to undercut the market for or value of the copyrighted work and, accordingly, the fourth factor cuts against a finding of fair use. Cf. Arista Records, LLC v. Doe 3, 604 F.3d at 124 (rejecting application of fair use to P2P file sharing, in part, because the likely detrimental effect of file-sharing on the value of copyrighted compositions is well documented. (citing MetroGoldwynMayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 923, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005))). The product sold in ReDigi's secondary market is indistinguishable from that sold in the legitimate primary market save for its lower price. The clear inference is that ReDigi will divert buyers away from that primary market. ReDigi incredibly argues that Capitol is preempted from making a market-based argument because Capitol itself condones downloading of its works on iTunes. (ReDigi Mem. 18.) Of course, Capitol, as copyright owner, does not forfeit its right to claim copyright infringement merely because it permits certain uses of its works. This argument, too, is therefore unavailing.

In sum, ReDigi facilitates and profits from the sale of copyrighted commercial recordings, transferred in their entirety, with a likely detrimental impact on the primary market for these goods. Accordingly, the Court concludes that the fair use defense does not permit ReDigi's users to upload and download files to and from the Cloud Locker incident to sale.

2. First Sale

The first sale defense, a common law principle recognized in BobbsMerrill Co. v. Straus, 210 U.S. 339, 350, 28 S.Ct. 722, 52 L.Ed. 1086 (1908) and now codified at Section 109(a) of the Copyright Act, provides that:

Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

17 U.S.C. 109. Under the first sale defense, once the copyright owner places a copyrighted item [here, a phonorecord] in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution. Quality King Distribs., Inc. v. L'anza Research Int'l, Inc., 523 U.S. 135, 152, 118 S.Ct. 1125, 140 L.Ed.2d 254 (1998); see Kirtsaeng v. John Wiley & Sons, Inc., U.S. , 133 S.Ct. 1351, 135455, 185 L.Ed.2d 392 (2013).

[655] ReDigi asserts that its service, which involves the resale of digital music files lawfully purchased on iTunes, is protected by the first sale defense. (ReDigi Mem. 19.) The Court disagrees.

As an initial matter, it should be noted that the fair use defense is, by its own terms, limited to assertions of the distribution right.17 U.S.C. 109 (referencing Section 106(3)); see Nimmer on Copyright 8.12. Because the Court has concluded that ReDigi's service violates Capitol's reproduction right, the first sale defense does not apply to ReDigi's infringement of those rights. See Design Options v. BellePointe, Inc., 940 F.Supp. 86, 91 (S.D.N.Y.1996).

In addition, the first sale doctrine does not protect ReDigi's distribution of Capitol's copyrighted works. This is because, as an unlawful reproduction, a digital music file sold on ReDigi is not lawfully made under this title. 17 U.S.C. 109(a). Moreover, the statute protects only distribution by the owner of a particular copy or phonorecord ... of that copy or phonorecord. Id. Here, a ReDigi user owns the phonorecord that was created when she purchased and downloaded a song from iTunes to her hard disk. But to sell that song on ReDigi, she must produce a new phonorecord on the ReDigi server. Because it is therefore impossible for the user to sell her particular phonorecord on ReDigi, the first sale statute cannot provide a defense. Put another way, the first sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce. Here, ReDigi is not distributing such material items; rather, it is distributing reproductions of the copyrighted code embedded in new material objects, namely, the ReDigi server in Arizona and its users' hard drives. The first sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era.

Rejecting such a conclusion, ReDigi argues that, because technological change has rendered its literal terms ambiguous, the Copyright Act must be construed in light of [its] basic purpose, namely, to incentivize creative work for the ultimate[ ] ... cause of promoting broad public availability of literature, music, and the other arts. Sony, 464 U.S. at 432, 104 S.Ct. 774 (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 95 S.Ct. 2040, 45 L.Ed.2d 84 (1975)). Thus, ReDigi asserts that refusal to apply the first sale doctrine to its service would grant Capitol a Court sanctioned extension of rights under the [C]opyright [A]ct ... which is against policy, and should not be endorsed by this Court. (ReDigi Mem. 24.)

The Court disagrees. ReDigi effectively requests that the Court amend the statute to achieve ReDigi's broader policy goalsgoals that happen to advance ReDigi's economic interests. However, ReDigi's argument fails for two reasons. First, while technological change may have rendered Section 109(a) unsatisfactory to many contemporary observers and consumers, it has not rendered it ambiguous. The statute plainly applies to the lawful owner's particular phonorecord, a phonorecord that by definition cannot be uploaded and sold on ReDigi's website. Second, amendment of the Copyright Act in line with ReDigi's proposal is a legislative prerogative that courts are unauthorized and ill suited to attempt.

Nor are the policy arguments as straightforward or uncontested as ReDigi suggests. Indeed, when confronting this precise subject in its report on the Digital Millenium Copyright Act, 17 U.S.C. 512, the United States Copyright Office (the USCO) rejected extension of the first [656] sale doctrine to the distribution of digital works, noting that the justifications for the first sale doctrine in the physical world could not be imported into the digital domain. See USCO, Library of Cong., DMCA Section 104 Report (2001) (DMCA Report); see also Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 129 (2d Cir.2008) (finding that the DMCA report is entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)). For instance, the USCO stated that the impact of the [first sale] doctrine on copyright owners [is] limited in the off-line world by a number of factors, including geography and the gradual degradation of books and analog works. DMCA Report at xi. Specifically,

[p]hysical copies of works degrade with time and use, making used copies less desirable than new ones. Digital information does not degrade, and can be reproduced perfectly on a recipient's computer. The used copy is just as desirable as (in fact, is indistinguishable from) a new copy of the same work. Time, space, effort and cost no longer act as barriers to the movement of copies, since digital copies can be transmitted nearly instantaneously anywhere in the world with minimal effort and negligible cost. The need to transport physical copies of works, which acts as a natural brake on the effect of resales on the copyright owner's market, no longer exists in the realm of digital transmissions. The ability of such used copies to compete for market share with new copies is thus far greater in the digital world.

Id. at 8283 (footnotes omitted). Thus, while ReDigi mounts attractive policy arguments, they are not as one-sided as it contends.

Finally, ReDigi feebly argues that the Court's reading of Section 109(a) would in effect exclude digital works from the meaning of the statute. (ReDigi Mem. 21.) That is not the case. Section 109(a) still protects a lawful owner's sale of her particular phonorecord, be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded. While this limitation clearly presents obstacles to resale that are different from, and perhaps even more onerous than, those involved in the resale of CDs and cassettes, the limitation is hardly absurdthe first sale doctrine was enacted in a world where the ease and speed of data transfer could not have been imagined. There are many reasons, some discussed herein, for why such physical limitations may be desirable. It is left to Congress, and not this Court, to deem them outmoded.

Accordingly, the Court concludes that the first sale defense does not permit sales of digital music files on ReDigi's website.

C. Liability

Having determined that sales on ReDigi's website infringe Capitol's copyrights, the Court turns to whether ReDigi is directly and/or secondarily liable for that infringement. Direct liability requires volitional conduct that causes the reproduction or distribution to be made. See Cartoon Network, 536 F.3d at 131. Secondary infringement occurs when a defendant contributed to or benefitted from a third party's infringement such that it is just to hold the defendant accountable for the infringing activity. Sony, 464 U.S. at 435, 104 S.Ct. 774. For the reasons stated below, the Court finds that ReDigi directly and secondarily infringed Capitol's copyrights.

1. Direct Infringement

To be liable for direct infringement, a defendant must have engaged in [657] some volitional conduct sufficient to show that [it] actively violated one of the plaintiff's exclusive rights. Arista Records LLC v. Usenet.com, Inc., 633 F.Supp.2d 124, 148 (S.D.N.Y.2009). In other words, to establish direct liability under ... the Act, something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner. Cartoon Network, 536 F.3d at 130 (quoting CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir.2004)) (citing Religious Tech. Ctr. v. Netcom OnLine Commc'n Servs., Inc., 907 F.Supp. 1361, 1370 (N.D.Cal.1995)).

In Cartoon Network, the Second Circuit addressed whether the cable television provider Cablevision had directly infringed the plaintiff's copyrights by providing digital video recording devices to its customers. 536 F.3d 121. The court determined that it had not. Though Cablevision had design[ed], hous[ed], and maintain[ed] the recording devices, it was Cablevision's customers who made the copies and therefore directly infringed the plaintiff's reproduction rights. Id. at 13132. The court reasoned that, [i]n determining who actually makes' a copy, a significant difference exists between making a request to a human employee, who then volitionally operates the copying system to make the copy, and issuing a command directly to a system, which automatically obeys commands and engages in no volitional conduct. Id. at 131. However, the court allowed that a case may exist where one's contribution to the creation of an infringing copy [is] so great that it warrants holding that party directly liable for the infringement, even though another party has actually made the copy. Cartoon Network, 536 F.3d at 133.

On the record before it, the Court concludes that, if such a case could ever occur, it has occurred with ReDigi. ReDigi's founders built a service where only copyrighted work could be sold. Unlike Cablevision's programming, which offered a mix of protected and public television, ReDigi's Media Manager scans a user's computer to build a list of eligible files that consists solely of protected music purchased on iTunes. While that process is itself automated, absolving ReDigi of direct liability on that ground alone would be a distinction without a difference. The fact that ReDigi's founders programmed their software to choose copyrighted content satisfies the volitional conduct requirement and renders ReDigi's case indistinguishable from those where human review of content gave rise to direct liability. See Usenet.com, 633 F.Supp.2d at 148;Playboy Enters., Inc. v. Russ Hardenburgh, Inc., 982 F.Supp. 503, 51213 (N.D.Ohio 1997). Moreover, unlike Cablevision, ReDigi infringed both Capitol's reproduction and distribution rights. ReDigi provided the infrastructure for its users' infringing sales and affirmatively brokered sales by connecting users who are seeking unavailable songs with potential sellers. Given this fundamental and deliberate role, the Court concludes that ReDigi's conduct transform[ed] [it] from [a] passive provider[ ] of a space in which infringing activities happened to occur to [an] active participant[ ] in the process of copyright infringement. Usenet.com, 633 F.Supp.2d at 148. Accordingly, the Court grants Capitol's motion for summary judgment on its claims for ReDigi's direct infringement of its distribution and reproduction rights.^[8]

[658] 2. Secondary Infringement

The Copyright Act does not expressly render anyone liable for infringement committed by another. Sony, 464 U.S. at 434, 104 S.Ct. 774. However, common law doctrines permit a court to impose secondary liability where just and appropriate. Id. at 435, 104 S.Ct. 774. Capitol asserts that ReDigi is secondarily liable for its users' direct infringement under three such doctrines: contributory infringement, inducement of infringement, and vicarious infringement. (Cap. Mem. 1316.) The Court agrees with respect to contributory and vicarious infringement, and therefore does not reach the inducement claim.

a. Contributory Infringement

Contributory infringement occurs where one ... with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another. Arista Records, LLC v. Doe 3, 604 F.3d at 118 (quoting Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971)); see, e.g., Grokster, 545 U.S. at 930, 125 S.Ct. 2764. The knowledge requirement is objective and satisfied where the defendant knew or had reason to know of the infringing activity. See Arista Records, LLC v. Doe 3, 604 F.3d at 118. Further, the support must be more than a mere quantitative contribution to the primary infringement ... [, it] must be substantial. Usenet.com, 633 F.Supp.2d 124, 155 (S.D.N.Y.2009). However, even where a defendant's contribution is material, it may evade liability if its product is capable of substantial noninfringing uses. Sony, 464 U.S. at 442, 104 S.Ct. 774 (the SonyBetamax rule).

In weighing the knowledge requirement, courts consider evidence of actual and constructive knowledge, including cease-and-desist letters, officer and employee statements, promotional materials, and industry experience. See, e.g., Napster, 239 F.3d at 102021, 1027;Arista Records LLC v. Lime Grp. LLC, 784 F.Supp.2d at 432;Usenet.com, 633 F.Supp.2d at 155. In addition, courts have consistently found that material support existed where file-sharing systems provided the site and facilities for their users' infringement. Napster, 239 F.3d at 1022;see, e.g., Usenet.com, 633 F.Supp.2d at 155.

The Court has little difficulty concluding that ReDigi knew or should have known that its service would encourage infringement. Despite the fact that ReDigi boasted on its website that it was The Legal Alternative and insisted YES, ReDigi is LEGAL, ReDigi warned investors in its subscription agreements that the law cannot be said to be well-settled in this area and that it could not guarantee ReDigi would prevail on its copyright defenses. (Cap. 56.1 6566.) The Recording Industry Association of America (RIAA) sent ReDigi a cease-and-desist [659] letter in November 2011, advising ReDigi that its website violated Capitol's and other RIAA members' copyrights. (Compl. 41.) Further, ReDigi was ensnared in a licensing dispute over song clips and cover art shortly after its launch, plainly indicating that infringement could be afoot. (RD 56.1 7475, 77.) ReDigi was also, of course, aware that copyright protected content was being sold on its websitea fact central to its business model and promotional campaigns. (Cap. 56.1 7073). Finally, ReDigi's officers claim to have researched copyright law [and] consulted with attorneys concerning their service, and also to have met with record companies to get input, get marketing support[,] and enter into deals with the labels. (RD Rep. 56.12 5, 5 20.) By educating themselves, the officers presumably understood the likelihood that use of ReDigi's service would result in infringement. Indeed, though ReDigi attempts to use its consultations with counsel as a shield, it is telling that ReDigi declined to reveal any of the advice it received on the subject. ( See Cap. Reply 9). ReDigi's lone rebuttal to this surfeit of evidence could only be that it sincerely believed in the legality of its service. However, the Court has not found and will not create a subjective, good faith defense to contributory liability's objective knowledge requirement, and therefore concludes that, based on the objective facts, ReDigi was aware of its users' infringement.

The Court also finds that ReDigi materially contributed to its users' infringement. As ReDigi has admitted, more than any other website that permits the sale of music, ReDigi is intimately involved in examining the content that will be sold and supervising the steps involved in making the music available for sale and selling it. (Cap. 56.1 35; RD Rep. 56.115 35.) ReDigi thus provided the site and facilities for the direct infringement. See, e.g., Napster, 239 F.3d at 1022;Usenet.com, 633 F.Supp.2d at 155;Lime Grp., 784 F.Supp.2d at 434. Without ReDigi's Cloud Locker, no infringement could have occurred. Indeed, Media Manager ensured that only infringement occurred by limiting eligible files to iTunes tracks. Contrary to any conception of remote conduct, ReDigi's service was the hub and heart of its users' infringing activity.

The Court finally concludes that ReDigi's service is not capable of substantial noninfringing uses. The SonyBetamax rule requires a court to determine whether a product or service is capable of substantial noninfringing uses, not whether it is currently used in a non-infringing manner. Napster, 239 F.3d at 1021 (discussing Sony, 464 U.S. at 44243, 104 S.Ct. 774). But, put simply, ReDigi, by virtue of its design, is incapable of compliance with the law. ReDigi's business is built on the erroneous notion that the first sale defense permits the electronic resale of digital music. As such, ReDigi is built to trade only in copyright protected iTunes files. However, as determined above, ReDigi's legal argumentand therefore business modelis fundamentally flawed. Accordingly, to comply with the law, either the law or ReDigi must change. While ReDigi 2.0, 3.0, or 4.0 may ultimately be deemed to comply with copyright lawa finding the Court need not and does not now makeit is clear that ReDigi 1.0 does not. Given the fundamental disconnect between ReDigi and the Copyright Act, and ReDigi's failure to provide any evidence of present or potential noninfringing uses, the Court concludes that the SonyBetamax rule cannot save ReDigi from contributory liability.

Accordingly, the Court grants Capitol's motion for summary judgment on its claim [660] for ReDigi's contributory infringement of its distribution and reproduction rights.^[9]

b. Vicarious Infringement

Vicarious liability for copyright infringement exists where the defendant has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities. Napster, 239 F.3d at 1022 (quoting Gershwin Pub. Corp., 443 F.2d at 1162);see Grokster, 545 U.S. at 930, 125 S.Ct. 2764. Unlike contributory infringement, knowledge is not an element of vicarious liability. Gershwin, 443, F.2d at 1162;see Fonovisa, Inc. v. Cherry Auction Inc., 76 F.3d 259, 26263 (9th Cir.1996).

Clearly, ReDigi Vicariously infringed Capitol's copyrights. As discussed, ReDigi exercised complete control over its website's content, user access, and sales. Indeed, ReDigi admits that it is intimately involved in ... supervising the steps involved in making the music available for sale and selling it on the website. (Cap. 56.1 35; RD Rep. 56.1 35); see e.g., Lime Grp., 784 F.Supp.2d at 435 (finding right to supervise where P2P file sharing system could filter content and regulate users). In addition, ReDigi financially benefitted from every infringing sale when it collected 60% of each transaction fee. See e.g., Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 308 (2d Cir.1963) (finding a direct financial benefit where the defendant received a share of the gross receipts on every infringing sale). Notably, ReDigi failed to address any of these arguments in its opposition brief, instead insisting that it was not vicariously liable for infringement that occurred outside the ReDigi service, for instance, when a user Impermissibly retained files on his computer. ( See ReDigi Opp'n 2223.) However, this argument is inapposite to the instant motions. Accordingly, the Court grants Capitol's motion for summary judgment on its claim for ReDigi's vicarious infringement of its distribution and reproduction rights.

IV. Conclusion

At base, ReDigi seeks judicial amendment of the Copyright Act to reach its desired policy outcome. However, [s]ound policy, as well as history, supports [the Court's] consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology. Sony, 464 U.S. at 431, 104 S.Ct. 774. Such defence often counsels for a limited interpretation of copyright protection. However, here, the Court cannot of its own accord condone the wholesale application of the first sale defense to the digital sphere, particularly when Congress itself has declined to take that step. Accordingly, and for the reasons stated above, the Court GRANTS Capitol's motion for summary judgment on its claims for ReDigi's direct, [661] contributory, and vicarious infringement of its distribution and reproduction rights. The Court also DENIES ReDigi's motion in its entirety.

Because issues remain with respect to Capitol's performance and display rights, and ReDigi's secondary infringement of Capitol's common law copyrights, as well as damages, injunctive relief, and attorney's fees, IT IS HEREBY ORDERED THAT the parties shall submit a joint letter to the Court no later than April 12, 2013 concerning the next contemplated steps in this case.

The Clerk of Court is respectfully directed to terminate the motions pending at Doc. Nos. 48 and 54.

SO ORDERED.

[1] The facts are taken from the pleadings, the parties' Local Civil Rule 56.1 Statements, the affidavits submitted in connection with the instant motions, and the exhibits attached thereto. The facts are undisputed unless otherwise noted. Where one party's 56.1 Statement is cited, the other party does not dispute the fact asserted, has offered no admissible evidence to refute that fact, or merely objects to inferences drawn from that fact.

[2] A train was only one of many analogies used to describe ReDigi's service. At oral argument, the device was likened to the Star Trek transporterBeam me up, Scottyand Willy Wonka's teleportation device, Wonkavision. (Tr., dated Oct. 5, 2012 (Tr.), 10:212; 28:1520.)

[3] On June 11, 2012, ReDigi launched ReDigi 2.0, new software that, when installed on a user's computer, purportedly directs the user's new iTunes purchases to upload from iTunes directly to the Cloud Locker. (RD 56.1 4041.) Accordingly, while access may transfer from user to user upon resale, the file is never moved from its initial location in the Cloud Locker. ( Id. 4452.) However, because ReDigi 2.0 launched after Capitol filed the Complaint and mere days before the close of discovery, the Court will not consider it in this action. ( See Tr. 19:220:3.)

[4] ReDigi's arguments in this round of briefing differ markedly from those it asserted in opposition to Capitol's motion for a preliminary injunction. ( See ReDigi Opp'n to Prelim. Inj., dated Jan. 27, 2012, Doc. No. 14 (ReDigi Opp'n to PI).) For instance, ReDigi no longer asserts an essential step defense, nor does it argue that copying to the Cloud Locker for storage is protected by the fair use defense. ( Id. at 914.) ReDigi has also abandoned its argument that the Digital Millennium Copyright Act, 17 U.S.C. 512, bars Capitol's claim. ( Id. at 22.) As such, the Court will consider only those arguments made in the instant motions.

[5] It bears noting that ReDigi made numerous admissions to the contrary at the preliminary injunction stage. For instance, in its opposition to Capitol's motion, ReDigi stated that, The only copying which takes place in the ReDigi service occurs when a user uploads music files to the ReDigi Cloud, ... or downloads music files from the user's Cloud Locker. ( See ReDigi Opp'n to PI at 9 (emphasis added).) ReDigi also stated that, after a digital music file was uploaded to the Cloud Locker, the copy from which it was made was actually deleted from the user's machine. ( Id. at 14 (emphasis added).) ReDigi's officers made similar statements in their depositions, and ReDigi's patent application for its upload technology states that to be offered for sale, [a music file] is first copied to the remote server and stored on the disc. ( See Capitol Mem. of Law, dated July 20, 2012, Doc. No. 49 (Cap. Mem.), at 89, n. 6 (emphasis added).) But, as earlier stated, these semantic distinctions are immaterial as even ReDigi's most recent description of its service runs afoul of the Copyright Act.

[6] Capitol argues that ReDigi also violated its distribution rights simply by making Capitol's recordings available for sale to the public, regardless of whether a sale occurred. ( See Cap. Mem. 11 n. 8 (citing Hotaling v. Church of Jesus Christ of LatterDay Saints, 118 F.3d 199, 201 (4th Cir.1997))). However, a number of courts, including one in this district, have cast significant doubt on this make available theory of distribution. See, e.g., Elektra Entm't Grp., Inc. v. Barker, 551 F.Supp.2d 234, 243 (S.D.N.Y.2008) ([T]he support in the case law for the make available theory of liability is quite limited.); LondonSire, 542 F.Supp.2d at 169 ([T]he defendants cannot be liable for violating the plaintiffs' distribution right unless a distribution actually occurred.). In any event, because the Court concludes that actual sales on ReDigi's website infringed Capitol's distribution right, it does not reach this additional theory of liability.

[7] ReDigi's argument is, perhaps, a relic of the argument it previously levied that copying to the Cloud Locker is protected as space shifting under the fair use doctrine. ( See ReDigi Opp'n to PI at 10.)

[8] Capitol also asserts a claim for common law copyright infringement arising from sales of its pre1972 recordings on ReDigi's website. (Compl. 8288.) Capitol correctly argues in its memorandum that the elements for a direct infringement claim under federal law mirror those for infringement of common law copyright under state law. See Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 563, 797 N.Y.S.2d 352, 830 N.E.2d 250 (2005); (Cap. Mem. 4.) Accordingly, the Court also Court grants Capitol's motion for summary judgment with respect to ReDigi's direct infringement of Capitol's distribution and reproduction rights in its pre1972 recordings. However, because neither Capitol nor ReDigi addressed the question of secondary infringement of common law copyrights, the Court does not reach that claim.

[9] As noted above, Capitol has alleged a separate cause of action for inducement of infringement. (Compl. 5160.) Disagreement exists over whether inducement of infringement is a separate theory of liability for copyright infringement or merely a subset of contributory liability. Compare Flava Works, Inc. v. Gunter, 689 F.3d 754, 758 (7th Cir.2012) (describing inducement as a form of contributory infringement), with Lime Grp., 784 F.Supp.2d at 424 (In Grokster, the Supreme Court confirmed that inducement of copyright infringement constitutes a distinct cause of action.). Regardless, because the Court concludes that ReDigi is liable for contributing to its users' direct infringement of Capitol's copyrights, it does not reach Capitol's inducement claim.