In Parfums Givenchy Inc. v. Drug Emporium Inc., the Ninth Circuit held that purchasing genuine copyrighted articles from others who lawfully obtained them from a foreign manufacturer is not a defense to a copyright infringement claim.

Parfums Givenchy Inc. ("Givenchy USA") is the subsidiary of Parfums Givenchy, S.A. ("Givenchy France") which produces AMARIGE perfume in France; this product is marketed in a decorative box, which is copyrighted under United States law. Givenchy France, the original owner of the United States copyright, assigned its rights to Givenchy USA. Drug Emporium, a United States retail chain, purchased AMARIGE perfume in the United States from a third party who had lawfully obtained the product abroad, and Drug Emporium began marketing the perfume in its original, copyrighted packaging. Givenchy USA sued Drug Emporium for infringement under the United States Copyright Act ("the Act"). Section 106(3) of the Act provides that unauthorized distribution of copyrighted items constitutes copyright infringement. However, Drug Emporium relied upon the "first sale" doctrine as a defense. Under this doctrine, codified in Section 109(a) of the Act, "the sale of a 'lawfully made' copy terminates the copyright holder's authority to interfere with subsequent sales or distribution of that particular copy." Thus, Drug Emporium asserted that the lawful sale abroad of AMARIGE perfume terminated Givenchy USA's rights in the articles. In other words, by the time Drug Emporium purchased the AMARIGE perfume, Givenchy USA's rights were exhausted.

The Ninth Circuit disagreed, finding that Section 602(a) of the Act, which prohibits the unauthorized importation of foreign purchased copies, controlled and cited an earlier case, BMG Music v. Perez, as dispositive. In the BMG case, the defendant had lawfully purchased outside the United States copyrighted recordings manufactured abroad. The defendant then imported the recordings into the United States and sold them in retail outlets. The copyright holders succeeded in their infringement suit, despite the defendant's assertion of the first sale doctrine. The Ninth Circuit held in the BMG case that "the words `lawfully made under this title' in Section 109(a) grant first sale protection only to copies legally made and sold in the United States."

The Ninth Circuit in Givenchy, however, acknowledged that a literal reading of BMG would lead to absurd results because it "would render the first sale doctrine wholly inapplicable to foreign manufactured goods, even after the goods have been lawfully imported into the United States with the authorization of the U.S. copyright holder." Thus, the court limited BMG to its facts and held only that "sales abroad of foreign manufactured U.S. copyrighted materials do not terminate the U.S. copyright holder's exclusive distribution rights in the United States..."

In so holding, the court also rejected Drug Emporium's argument that BMG was distinguishable, because it did not involve a parent-subsidiary relationship between the manufacturer and the copyright holder, as was the case between Givenchy France and Givenchy USA. Analogizing from trademark cases, Drug Emporium argued that a wholly-owned United States subsidiary should not be prevented from invoking the copyright laws to prevent third parties from importing goods manufactured by the parent company. The court, however, observed that the purpose of the Tariff and Lanham Acts in trademark cases differed from that of the Copyright Act and, therefore, declined to adopt Drug Emporium's analogous reasoning.

The United States Supreme Court has denied Drug Emporium's petition for review of the Ninth Circuit's decision.