"Accordingly, while perhaps a close call, we think that, in light of its necessary interplay with section 602(a)(1), section 109(a) is best interpreted as applying only to works manufactured domestically. . . In adopting this view, we are comforted by the fact that our interpretation of section 109(a) is one that the Justices appear to have had in mind when deciding Quality King. There the Court reasoned, admittedly in dicta, that section 602(a)(1) had a broader scope than section 109(a) because, at least in part, section 602(a)(1) "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."
"Economic justifications also support applicability of the first sale doctrine to foreign made copies. Granting a copyright holder unlimited power to control all commercial activities involving copies of her work would create high transaction costs and lead to uncertainty in the secondary market. An owner first would have to determine the origin of the copy --either domestic or foreign -- before she could sell it. If it were foreign made and the first sale doctrine does not apply to such copies, she would need to receive permission from the copyright holder. Such a result would provide greater protection to copies manufactured abroad than those manufactured domestically. . . .I do not believe Congress intended to provide an incentive for US copyright holders to manufacture copies of their work abroad."
"If we have misunderstood Congressional purpose in enacting the first sale doctrine, or if our decision leads to policy consequences that were not foreseen by Congress or which Congress now finds unpalatable, Congress is of course able to correct our judgment."