Case Problem:
L’anza Research Inc. manufactures high-quality hair care products in California. Copyrighted labels are attached to all products and packaging. In the United States, L’anza sells exclusively to authorized distributors who resell within limited geographic areas and only to authorized retailers such as hair salons. Exports to foreign distributors are sold at a 40 percent discount. L’anza sold three shipments containing several tons of merchandise to its distributor in the United Kingdom, Quality King, who resold them to a buyer in Malta. L’anza later discovered that the products had been resold to a U.S. buyer for less than the wholesale price and were being sold at discounted prices by unauthorized retailers in California. L’anza complained that because it held the right to the copyrighted language and design of the labels, the unauthorized resale violated U.S. copyright laws. The lower courts agreed. The U.S. Supreme Court reversed, unanimously holding that under the “first sale” doctrine, once a copyright owner places an authentic, copyrighted item in the stream of commerce, it has no further right to control its distribution or reimportation. Thus any lawful purchaser of the products may dispose of them as they please without further obligation. This decision does not apply to counterfeited, pirated, or illegally copied goods shipped into the United States in violation of the copyright or trademark laws. What should L’anza have done to protect itself? Why is a foreign distributorship agreement important? What specific areas of concern should it address? See Quality King Distributors v. L’anza Research Int’l. Inc., 523 U.S. 135 (1998).
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.