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Full Opinion
K MART CORP.
v.
CARTIER, INC., ET AL.
Supreme Court of United States.
*284 Deputy Solicitor General Cohen reargued the cause for petitioners in No. 86-625. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Assistant Attorney General Spears, Jeffrey P. Minear, David M. Cohen, Robert V. Zener, and Alfonso Robles. Nathan Lewin reargued the cause for petitioners in Nos. 86-495 and 86-624. With him on the briefs for petitioner in No. 86-624 was Jamie S. Gorelick. Robert W. Steele argued the cause for petitioners in Nos. 86-495 and 86-624 on the original argument. With him on the briefs for petitioner in No. 86-495 were Robert E. Hebda and James C. Tuttle.
*285 William H. Allen reargued the cause for respondents. With him on the briefs were Eugene A. Ludwig, Scott D. Gilbert, and Elizabeth V. Foote.[]
Briefs of amici curiae urging affirmance were filed for American Cyanamid Co. et al. by David Ladd and Thomas W. Kirby; for the American Intellectual Property Law Association, Inc., by Neil A. Smith; for Duracell Inc. by James N. Bierman, Jay N. Varon, Sheila McDonald Gill, and Gregg A. Dwyer; for Lever Brothers Co. by Robert P. Devlin; for the Motor Vehicle Manufacturers Association of the United States, Inc., by William H. Crabtree; for the United States Trademark Association by Marie V. Driscoll; and for Yamaha International Corp. et al. by Robert E. Wagner and Robert E. Browne.
Harold C. Wegner, Barry E. Bretschneider, Donald R. Dinan, Charles F. Schill, and Albert P. Halluin filed a brief for Cetus Corp. as amicus curiae.
JUSTICE KENNEDY announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II-A, and II-C, and an opinion with respect to Part II-B, in which WHITE, J., joined.
A gray-market good is a foreign-manufactured good, bearing a valid United States trademark, that is imported without the consent of the United States trademark holder. These cases present the issue whether the Secretary of the Treasury's regulation permitting the importation of certain gray-market goods, 19 CFR § 133.21 (1987), is a reasonable agency interpretation of § 526 of the Tariff Act of 1930 (1930 Tariff Act), 46 Stat. 741, as amended, 19 U. S. C. § 1526.
*286 I
A
The gray market arises in any of three general contexts. The prototypical gray-market victim (case 1) is a domestic firm that purchases from an independent foreign firm the rights to register and use the latter's trademark as a United States trademark and to sell its foreign-manufactured products here. Especially where the foreign firm has already registered the trademark in the United States or where the product has already earned a reputation for quality, the right to use that trademark can be very valuable. If the foreign manufacturer could import the trademarked goods and distribute them here, despite having sold the trademark to a domestic firm, the domestic firm would be forced into sharp intrabrand competition involving the very trademark it purchased. Similar intrabrand competition could arise if the foreign manufacturer markets its wares outside the United States, as is often the case, and a third party who purchases them abroad could legally import them. In either event, the parallel importation, if permitted to proceed, would create a gray market that could jeopardize the trademark holder's investment.
The second context (case 2) is a situation in which a domestic firm registers the United States trademark for goods that are manufactured abroad by an affiliated manufacturer. In its most common variation (case 2a), a foreign firm wishes to control distribution of its wares in this country by incorporating a subsidiary here. The subsidiary then registers under its own name (or the manufacturer assigns to the subsidiary's name) a United States trademark that is identical to its parent's foreign trademark. The parallel importation by a third party who buys the goods abroad (or conceivably even by the affiliated foreign manufacturer itself) creates a gray market. Two other variations on this theme occur when an American-based firm establishes abroad a manufacturing subsidiary corporation (case 2b) or its own unincorporated manufacturing division (case 2c) to produce its United States trademarked *287 goods, and then imports them for domestic distribution. If the trademark holder or its foreign subsidiary sells the trademarked goods abroad, the parallel importation of the goods competes on the gray market with the holder's domestic sales.
In the third context (case 3), the domestic holder of a United States trademark authorizes an independent foreign manufacturer to use it. Usually the holder sells to the foreign manufacturer an exclusive right to use the trademark in a particular foreign location, but conditions the right on the foreign manufacturer's promise not to import its trademarked goods into the United States. Once again, if the foreign manufacturer or a third party imports into the United States, the foreign-manufactured goods will compete on the gray market with the holder's domestic goods.
B
Until 1922, the Federal Government did not regulate the importation of gray-market goods, not even to protect the investment of an independent purchaser of a foreign trademark, and not even in the extreme case where the independent foreign manufacturer breached its agreement to refrain from direct competition with the purchaser. That year, however, Congress was spurred to action by a Court of Appeals decision declining to enjoin the parallel importation of goods bearing a trademark that (as in case 1) a domestic company had purchased from an independent foreign manufacturer at a premium. See A. Bourjois & Co. v. Katzel, 275 F. 539 (CA2 1921), rev'd, 260 U. S. 689 (1923).
In an immediate response to Katzel, Congress enacted § 526 of the Tariff Act of 1922, 42 Stat. 975. That provision, later reenacted in identical form as § 526 of the 1930 Tariff Act, 19 U. S. C. § 1526, prohibits importing
"into the United States any merchandise of foreign manufacture if such merchandise . . . bears a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States, and registered *288 in the Patent and Trademark Office by a person domiciled in the United States . . . , unless written consent of the owner of such trademark is produced at the time of making entry." 19 U. S. C. § 1526(a).[1]
The regulations implementing § 526 for the past 50 years have not applied the prohibition to all gray-market goods. The Customs Service regulation now in force provides generally that "[f]oreign-made articles bearing a trademark identical with one owned and recorded by a citizen of the United States or a corporation or association created or organized within the United States are subject to seizure and forfeiture as prohibited importations." 19 CFR § 133.21(b) (1987).[2]*289 But the regulation furnishes a "common-control" exception from the ban, permitting the entry of gray-market goods manufactured abroad by the trademark owner or its affiliate:
"(c) Restrictions not applicable. The restrictions . . . do not apply to imported articles when:
"(1) Both the foreign and the U. S. trademark or trade name are owned by the same person or business entity; [or]
"(2) The foreign and domestic trademark or trade name owners are parent and subsidiary companies or are otherwise subject to common ownership or control. . . ."
*290 The Customs Service regulation further provides an "authorized-use" exception, which permits importation of gray-market goods where
"(3) [t]he articles of foreign manufacture bear a recorded trademark or trade name applied under authorization of the U. S. owner . . . ." 19 CFR § 133.21(c) (1987).
Respondents, an association of United States trademark holders and two of its members, brought suit in Federal District Court in February 1984, seeking both a declaration that the Customs Service regulation, 19 CFR §§ 133.21(c)(1)-(3) (1987), is invalid and an injunction against its enforcement. Coalition to Preserve the Integrity of American Trademarks v. United States, 598 F. Supp. 844 (DC 1984). They asserted that the common-control and authorized-use exceptions are inconsistent with § 526 of the 1930 Tariff Act.[3] Petitioners K mart and 47th Street Photo intervened as defendants.
The District Court upheld the Customs Service regulation, 598 F. Supp., at 853, but the Court of Appeals reversed, Coalition to Preserve the Integrity of American Trademarks v. United States, 252 U. S. App. D. C. 342, 790 F. 2d 903 (1986) (hereinafter COPIAT), holding that the Customs Service regulation was an unreasonable administrative interpretation of § 526. We granted certiorari, 479 U. S. 1005 (1986), to resolve a conflict among the Courts of Appeals. Compare Vivitar Corp. v. United States, 761 F. 2d 1552, 1557-1560 (CA Fed. 1985), aff'g 593 F. Supp. 420 (Ct. Int'l Trade 1984), cert. denied, 474 U. S. 1055 (1986); and Olympus Corp. v. United States, 792 F. 2d 315, 317-319 (CA2 1986), aff'g 627 F. *291 Supp. 911 (EDNY 1985), cert. pending, No. 86-757, with COPIAT, supra, at 346-355, 790 F. 2d, at 907-916. In an earlier opinion, we affirmed the Court of Appeals' conclusion that the District Court had jurisdiction, and set the cases for reargument on the merits. 485 U. S. 176 (1988).
A majority of this Court now holds that the common-control exception of the Customs Service regulation, 19 CFR §§ 133.21(c)(1)-(2) (1987), is consistent with § 526. See post, at 309-310 (opinion of BRENNAN, J.). A different majority, however, holds that the authorized-use exception, 19 CFR § 133.21(c)(3) (1987), is inconsistent with § 526. See post, at 328-329 (opinion of SCALIA, J.). We therefore affirm the Court of Appeals in part and reverse in part.
II
A
In determining whether a challenged regulation is valid, a reviewing court must first determine if the regulation is consistent with the language of the statute. "If the statute is clear and unambiguous `that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.' . . . The traditional deference courts pay to agency interpretation is not to be applied to alter the clearly expressed intent of Congress." Board of Governors, FRS v. Dimension Financial Corp., 474 U. S. 361, 368 (1986), quoting Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842-843 (1984). See also Mills Music, Inc. v. Snyder, 469 U. S. 153, 164 (1985). In ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole. Bethesda Hospital Assn. v. Bowen, 485 U. S. 399, 403-405 (1988); Offshore Logistics, Inc. v. Tallentire, 477 U. S. 207, 220-221 (1986). If the statute is silent or ambiguous with respect to the specific issue addressed by the regulation, the question becomes whether the agency *292 regulation is a permissible construction of the statute. See Chevron, supra, at 843; Chemical Manufacturers Assn. v. Natural Resources Defense Council, Inc., 470 U. S. 116, 125 (1985). If the agency regulation is not in conflict with the plain language of the statute, a reviewing court must give deference to the agency's interpretation of the statute. United States v. Boyle, 469 U. S. 241, 246, n. 4 (1985).
B
Following this analysis, I conclude that subsections (c)(1) and (c)(2) of the Customs Service regulation, 19 CFR §§ 133.21 (c)(1) and (c)(2) (1987), are permissible constructions designed to resolve statutory ambiguities. All Members of the Court are in agreement that the agency may interpret the statute to bar importation of gray-market goods in what we have denoted case 1 and to permit the imports under case 2a. See post, at 296, 298-299 (opinion of BRENNAN, J.); post, at 318 (opinion of SCALIA, J.). As these writings state, "owned by" is sufficiently ambiguous, in the context of the statute, that it applies to situations involving a foreign parent, which is case 2a. This ambiguity arises from the inability to discern, from the statutory language, which of the two entities involved in case 2a can be said to "own" the United States trademark if, as in some instances, the domestic subsidiary is wholly owned by its foreign parent.
A further statutory ambiguity contained in the phrase "merchandise of foreign manufacture," suffices to sustain the regulations as they apply to cases 2b and 2c. This ambiguity parallels that of "owned by," which sustained case 2a, because it is possible to interpret "merchandise of foreign manufacture" to mean (1) goods manufactured in a foreign country, (2) goods manufactured by a foreign company, or (3) goods manufactured in a foreign country by a foreign company. Given the imprecision in the statute, the agency is entitled to choose any reasonable definition and to interpret the statute to say that goods manufactured by a foreign subsidiary *293 or division of a domestic company are not goods "of foreign manufacture."[4]
C
(1)
Subsection (c)(3), 19 CFR § 133.21(c)(3) (1987), of the regulation, however, cannot stand. The ambiguous statutory phrases that we have already discussed, "owned by" and *294 "merchandise of foreign manufacture," are irrelevant to the proscription contained in subsection (3) of the regulation. This subsection of the regulation denies a domestic trademark holder the power to prohibit the importation of goods made by an independent foreign manufacturer where the domestic trademark holder has authorized the foreign manufacturer to use the trademark. Under no reasonable construction of the statutory language can goods made in a foreign country by an independent foreign manufacturer be removed from the purview of the statute.
(2)
The design of the regulation is such that the subsection of the regulation dealing with case 3, § 133.21(c)(3), is severable. Cf. Board of Governors, FRS v. Dimension Financial Corp., 474 U. S., at 368 (invalidating a Federal Reserve Board definition of "bank" in 12 CFR § 225.2(a)(1) (1985), but leaving intact the remaining parts of the regulation). The severance and invalidation of this subsection will not impair the function of the statute as a whole, and there is no indication that the regulation would not have been passed but for its inclusion. Accordingly, subsection (c)(3) of § 133.21 must be invalidated for its conflict with the unequivocal language of the statute.
III
We hold that the Customs Service regulation is consistent with § 526 insofar as it exempts from the importation ban goods that are manufactured abroad by the "same person" who holds the United States trademark, 19 CFR § 133.21(c) (1) (1987), or by a person who is "subject to common . . . control" with the United States trademark holder, § 133.21(c)(2). Because the authorized-use exception of the regulation, § 133.21(c)(3), is in conflict with the plain language of the statute, that provision cannot stand. The judgment of the *295A Court of Appeals is therefore reversed insofar as it invalidated §§ 133.21(c)(1) and (c)(2), but affirmed with respect to § 133.21(c)(3).
It is so ordered.
*295B JUSTICE BRENNAN, with whom JUSTICE MARSHALL and JUSTICE STEVENS join, and with whom JUSTICE WHITE joins as to Part IV, concurring in part and dissenting in part.
Section 526 of the Tariff Act of 1930 (1930 Tariff Act), 46 Stat. 741, as amended, 19 U. S. C. § 1526, provides extraordinary protection to certain holders of trademarks registered in the United States. A United States trademark holder covered by § 526 can prohibit or condition all importation of merchandise bearing its trademark, thereby gaining a virtual monopoly, free from intrabrand competition, on domestic distribution of any merchandise bearing the trademark. For half a century the Secretary of the Treasury has consistently interpreted § 526 to grant this exclusionary power not to all United States trademark holders, but only to certain ones with specifically defined relationships to the manufacturer. Specifically, Treasury has a longstanding practice, expressed currently in 19 CFR § 133.21 (1987) (Customs Service regulation), of not extending § 526's extraordinary protection to the very firm that manufactured the gray-market merchandise abroad, to affiliates of foreign manufacturers, or to firms that authorize the use of their trademarks abroad. Consequently, a multibillion dollar industry has emerged around the parallel importation of foreign-manufactured merchandise bearing United States trademarks.
In the face of this longstanding interpretation of § 526's reach, respondent Coalition to Preserve the Integrity of American Trademarks and its members, most of whom are United States trademark holders or affiliates of United States trademark holders that compete against the gray market, have waged a full-scale battle in legislative, executive, *296 and administrative fora against the Customs Service regulation, and particularly the common-control exception, 19 CFR §§ 133.21(c)(1) and (c)(2) (1987). See Eisler, Gray-Market Mayhem: It's Makers vs. Importers in Lobbying Onslaught, Legal Times, Nov. 17, 1986, p. 1, col. 1. Largely unsuccessful in the political branches, they have more recently brought the battle to the courts, asserting that Treasury is (and, since 1922, has been) statutorily required to extend to them the same exclusionary powers as it extends to what the Court refers to as the "prototypical gray-market victim." Ante, at 286.[1] This is such a suit.
There is no dispute that § 526 protects the trademark holder in the first of the three gray-market contexts identified by the Court the prototypical gray-market situation in which a domestic firm purchases from an independent foreign firm the rights to register and use in the United States a foreign trademark (case 1). See ante, at 292. The dispute in this litigation centers almost exclusively around the second context, involving a foreign manufacturer that is in some way affiliated with the United States trademark holder, whether the trademark holder is a subsidiary of (case 2a), the parent of (case 2b), or the same as (case 2c), the foreign manufacturer. The Customs Service's common-control exception denudes the trademark holder of § 526's protection in each of the foregoing cases. I concur in the Court's judgment that the common-control exception is consistent with § 526, but I reach that conclusion through an analysis that differs from JUSTICE KENNEDY'S. See ante, at 292-293.
Also at issue, although the parties and amici give it short shrift, is the third context (case 3), in which the domestic firm authorizes an independent foreign manufacturer to use its *297 trademark abroad. See ante, at 287, 293-294. The Customs Service's authorized-use exception, 19 CFR § 133.21(c)(3) (1987), deprives the trademark holder of § 526's protection in such a situation. For reasons set forth in Part IV of this opinion, I dissent from the Court's judgment that the authorized-use exception is inconsistent with § 526.
I
A
An assessment of the reasonableness of the Customs Service's interpretation of § 526 of the 1930 Tariff Act begins, as always, with an assessment of "the particular statutory language at issue, as well as the language and design of the statute as a whole." Ante, at 291 (citations omitted). Section 526 requires consent of the trademark owner to import a United States trademarked product if (1) the product is "of foreign manufacture"; (2) the trademark it bears is "owned by" either a United States citizen or "a corporation . . . created or organized within . . . the United States"; and (3) "a person domiciled in the United States" registered the trademark.
The most blatant hint that Congress did not intend to extend § 526's protection to affiliates of foreign manufacturers (case 2) is the provision's protectionist, almost jingoist, flavor. Its structure bespeaks an intent, characteristic of the times, to protect only domestic interests. A foreign manufacturer that imports its trademarked products into the United States cannot invoke § 526 to prevent third parties from competing in the domestic market by buying the trademarked goods abroad and importing them here: The trademark is not "registered in the Patent and Trademark Office." The same manufacturer cannot protect itself against parallel importation merely by registering its trademark in the United States: It is not "a person domiciled in the United States." Nor can the manufacturer insulate itself by hiring a United States domiciliary to register the trademark: The *298 owner is not "organized within . . . the United States." For the same reason, it will not even suffice for the foreign manufacturer to incorporate a subsidiary here to register the trademark on the parent's behalf, if the foreign parent still owns the trademark.
The barriers that Congress erected seem calculated to serve no purpose other than to reserve exclusively to domestic, not foreign, interests the extraordinary protection that § 526 provides. But they are fragile barriers indeed if a foreign manufacturer might bypass them by the simple device of incorporating a shell domestic subsidiary and transferring to it a single asset the United States trademark. Such a reading of § 526 seems entirely at odds with the protectionist sentiment that inspired the provision. If a foreign manufacturer could insulate itself so easily from the competition of parallel imports, much of § 526's limiting language would be pointless.
B
The language of § 526 can reasonably be read, as the Customs Service has, to avoid such an anomaly. Section 526 defines neither "owned by" nor "of foreign manufacture," and both phrases admit of considerable ambiguity when applied to affiliates of foreign manufacturers. More specifically, in each of the disputed gray-market cases involving a domestic affiliate of a foreign manufacturer (case 2), it cannot be confidently discerned either which entity owns the trademark or whether the goods in question are "of foreign manufacture."
As every Member of this Court agrees, § 526 does not unambiguously cover the situation in which a domestic subsidiary of a foreign manufacturer registers its parent's trademark in the United States (case 2a), because the trademark is not clearly "owned by" a domestic firm. See ante, at 292; post, at 318 (opinion of SCALIA, J.). "The term [`owner'] is. . . nomen generalissimum, and its meaning is to be gathered from the connection in which it is used, and from the subject-matter to which it is applied." Black's Law Dictionary *299 996 (5th ed. 1979). But whether "ownership" is the "[c]ollection of rights to use and enjoy property, including [the] right to transmit it to others," or "[t]he complete dominion, title, or proprietary right in a thing," or "[t]he entirety of the powers of use and disposal allowed by law," id., at 997, the parent corporation not the subsidiary whose every decision it controls better fits the bill as the true owner of any property that the subsidiary nominally possesses. Cf. Copperweld Corp. v. Independence Tube Corp., 467 U. S. 752, 771 (1984) (parent and wholly owned subsidiary cannot engage in "conspiracy" within meaning of § 1 of the Sherman Act, 15 U. S. C. § 1, because they "always have a `unity of purpose or a common design' ") (citation omitted) (emphasis in original). Because of this ambiguity "[t]he Patent and Trademark Office takes the position that ownership of marks among parent-subsidiary corporations . . . is largely a matter to be decided between the parties themselves." 1 J. McCarthy, Trademarks and Unfair Competition 748 (2d ed., 1984) (footnote omitted).
The same ambiguity does not, of course, infect cases 2b and 2c. A domestic parent plainly owns the trademark registered in its name, whether or not it also owns a manufacturing subsidiary (case 2b) or division (case 2c) abroad. Nevertheless, § 526 does not unambiguously cover cases 2b and 2c because it is unclear whether merchandise manufactured abroad by a division or a subsidiary of a domestic firm is "merchandise of foreign manufacture." That phrase could readily be interpreted to mean either "merchandise manufactured in a foreign country" or "merchandise manufactured by a foreigner." Under the former definition, the merchandise manufactured abroad in cases 2b and 2c would fall within § 526's ban. Under the latter definition, however, the coverage is not as clear. Surely a domestic firm that establishes a manufacturing facility abroad (case 2c) is not in any sense a foreigner, and it is at the very least reasonable to view as "American" the foreign subsidiary of a domestic firm.
*300 II
Even if the language of § 526 clearly covered all affiliates of foreign manufacturers, "[i]t is a `familiar rule, that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers.' "[2] It is therefore appropriate to turn to our other "traditional tools of statutory construction" for clues of congressional intent. INS v. Cardoza-Fonseca, 480 U. S. 421, 446 (1987). The purpose and legislative history of § 526 confirm that if Congress had any intent as to the application of § 526 to affiliates of foreign manufacturers, it was that they ought not enjoy § 526's protection. There is, admittedly, evidence suggesting that some legislators might have understood § 526 otherwise. That evidence, however, is slim, ambiguous, and interspersed among more and more convincing evidence that Congress had a contrary intent.
A
Section 526 can be fully understood only in the context of the controversial judicial opinion that spawned it. In A. Bourjois & Co. v. Katzel, 275 F. 539 (CA2 1921), rev'd, 260 U. S. 689 (1923), a French producer of "Java" face powder sold to an independent United States company at a considerable premium all its United States business, along with its goodwill and full rights in its United States trademarks. The United States company, Bourjois & Co., registered the newly acquired trademarks under its own name and continued to import the powder from the French producer, selling it to domestic consumers under the French trademark and its own name. All the while, the United States company went to great expense to develop an identity independent from *301 that of the French producer of its product. But much of the expense went to waste, for a competitor began to buy Java directly from the French producer abroad and market it here under the French trademark in competition with Bourjois. In sum, Bourjois was a "prototypical gray-market victim" a United States trademark holder that purchased its trademark rights, at arm's length and at substantial cost, from an unaffiliated foreign producer. Ante, at 286.
Despite the apparent unfairness of the competition, the Court of Appeals for the Second Circuit declined to enjoin the encroachment on the trademark holder's newly purchased market. The court could find no trademark violation so long as the competitor's French labels accurately identified the product's manufacturer. It adhered to the then-prevailing "universality" theory of trademark law, a view that it had espoused for several years. See, e. g., Fred Gretsch Mfg. Co. v. Schoening, 238 F. 780, 782 (1916). Under that view, trademarks do not confer on the owner property interests or monopoly power over intrabrand competition. Rather, they merely protect the public from deception by indicating "the origin of the goods they mark." Katzel, supra, at 543.
While Bourjois, the prototypical (case 1) gray-market victim, evoked little sympathy from the Court of Appeals, it would have been a far less sympathetic plaintiff had it not bargained and paid so dearly for the Java trademark and distribution rights. And the gray-market encroachment on the Java market would have been considerably less troubling had Bourjois had control over the foreign manufacturer's import conduct or over its sales abroad to third parties who might import; it would essentially have been seeking to protect itself from its own competition.
A comparison of Bourjois to the parties seeking § 526's protection in this litigation aptly illustrates the profound difference between the equities presented by the prototypical gray-market victim and those implicated in case 2. First, *302 the United States trademark holder that, like Bourjois, has purchased trademark rights at arm's length from an independent manufacturer stands to lose the full benefit of its bargain because of gray-market interference. In contrast, a United States trademark holder that acquires identical rights from an affiliate (case 2a) or creates identical rights itself and permits them to be used abroad by an affiliate (cases 2b and 2c) does not have the same sort of investment at stake.
Second, without § 526, the independent trademark purchaser has no direct control over the importation of competing goods, much less over the manufacturer's sale to third parties abroad. In contrast, if the gray market harms a United States trademark holder in case 2a, 2b, or 2c, that firm and its foreign affiliate (whether a parent, subsidiary, or division) can respond with a panoply of options that are unavailable to the independent purchaser of a foreign trademark. They could, for example, jointly decide in their mutual best interests that the manufacturer (1) should not import directly to any domestic purchaser other than its affiliate; (2) should, if legal, impose a restriction against resale (or against resale in the United States) as a condition on its sales abroad to potential parallel importers; or (3) should curtail sales abroad entirely.
These differences furnish perfectly rational reasons that Congress might have intended to distinguish between a domestic firm that purchases trademark rights from an independent foreign firm and one that either acquires identical rights from an affiliated foreign firm or develops identical rights and permits a manufacturing subsidiary or division to use them abroad.
B
There is no dispute that the perceived inequity in case 1, as exemplified by Katzel, was the "major stimulus" for the enactment of § 526. Coalition to Preserve the Integrity of American Trademarks v. United States, 252 U. S. App. D. C. 342, 348, 790 F. 2d 903, 909 (1986) (hereafter COPIAT); see also *303 Sturges v. Clark D. Pease, Inc., 48 F. 2d 1035, 1037 (CA2 1931) (A. Hand, J.); Coty, Inc. v. Le Blume Import Co., 292 F. 264, 268-269 (SDNY 1923) (L. Hand, J.). United States trademark holders, many of which had purchased foreign trademarks from unrelated foreign corporations, demanded an immediate legislative response to Katzel. Congress responded with § 526 of the 1922 Tariff Act, without even waiting for this Court to reverse the Second Circuit (which it ultimately did three months later). The hastily drafted provision was introduced as a "midnight amendmen[t]" on the floor of the Senate, 62 Cong. Rec. 11602 (1922) (remarks of Sen. Moses), and allotted a miserly 10 minutes of debate, in the context of a debate on a comprehensive revision of tariff (not trademark) law. The specific wording of the response was by no means carefully considered, which provides all the more reason to avoid a hypertechnical interpretation that would "make trouble rather than allay it." Fort Smith & Western R. Co. v. Mills, 253 U. S. 206, 208 (1920); see United States v. Bass, 404 U. S. 336, 344 (1971).
The language that was originally introduced prohibited in essence the importation, without the trademark owner's consent, of "any merchandise if such merchandise . . . bears a trade-mark registered in the Patent Office by a person domiciled in the United States." 62 Cong. Rec. 11602 (1922). As initially drafted, § 526 lacked two of its three current limitations. See supra, at 297. First, it did not limit the import prohibition to goods that were "of foreign manufacture"; that limitation was added later by floor amendment when an opponent pointed out that the provision as written would preclude, for example, a United States citizen from importing a domestically manufactured product that had been exported to, and then purchased by him in, Canada. Second, the bill lacked the requirement that the trademark be "owned by a citizen of, or by a corporation or association created or organized within, the United States"; that limitation appeared for the first time, without explanation, in the Conference *304 Report. H. R. Conf. Rep. No. 1223, 67th Cong., 2d Sess. (1922). See infra, at 306-307.
The sparse legislative history confirms that Congress' sole goal was to overrule Katzel. Section 526's sponsors and proponents categorically rejected any suggestion that its effect might be broader than necessary to overrule Katzel on its facts. They emphasized repeatedly that § 526 would serve at the very most to protect domestic companies who (like Bourjois) purchased trademark rights from unrelated foreign manufacturers.[3] In fact, the first Senator to object to § 526 was troubled by the impropriety of enacting a provision designed to do no more than reverse Katzel while it was still pending before this Court, 62 Cong. Rec. 11603 (1922) ("[T]he whole subject matter involved in [§ 526] . . . has been heard in the circuit court of appeals [in Katzel] and is now on its way to the Supreme Court of the United States for final determination") (remarks of Sen. Moses), a characterization with which no one took issue.
If anything, the most outspoken supporters of § 526 characterized it as even more limited than Katzel for they seemed to have been operating under the mistaken impression that the French producer in Katzel was itself importing Java in competition with Bourjois and in violation of its agreement. Thus, several proponents, like Senator Sutherland, repeatedly described the "only aim" of § 526 as the "prevent[ion] [of] a palpable fraud," 62 Cong. Rec. 11603 (1922), or the protection of domestic firms that purchase trademarks from foreign manufacturers, which then "deliberately violate the property rights of those to whom they have sold these trade-marks by *305 shipping over to this country goods under those identical trade-marks." Ibid.[4]
The Court of Appeals read an exchange between Senators Lenroot and McCumber to suggest that § 526 could have been understood to go further than necessary merely to overrule Katzel on its facts.[5] The exchange began with Senator *306 Lenroot's inquiry whether § 526 would protect from parallel imports a foreign manufacturer whose "American agents . . . register a trade-mark . . . here in the United States," 62 Cong. Rec. at 11605 (emphasis added), to which Senator McCumber gave the following opaque response:
"[I]f there has been no transfer of trade-mark, that presents an entirely different question. But suppose the trade-mark is owned exclusively by an American firm or corporation. The mere fact of a foreigner having a trade-mark and registering that trade-mark in the United States, and selling the goods in the United States through an agency, of course, would not be affected by this provision." Ibid. (emphasis added).
Dissatisfied with the response, Senator Lenroot rephrased the question: whether the foreign owner of "an international trade-mark . . . , registered by an American, with American domicile" could preclude parallel importation of the product "without the written consent of the [foreign firm], or their agent domiciled here in America." Ibid. (emphasis added). Time ran out before Senator McCumber could answer.
I disagree with both the inference that the Court of Appeals drew from Senator Lenroot's question and its reading of the answer. In the first place, the question, in either formulation, does not suggest that "Senator Lenroot . . . was concerned that foreign corporations could obtain the statutory monopoly simply by incorporating an American subsidiary." COPIAT, 252 U. S. App. D. C., at 350, 790 F. 2d, at 911 (emphasis added). It refers only to the possibility of a foreign company "hav[ing] an agent" (not necessarily "incorporating a subsidiary") in the United States to "register" (not necessarily to "own") the foreign trademark. The question *307 seems to have been directed to the inadvertent omission, subsequently remedied by the Conference Committee, of the requirement that the trademark be "owned by a citizen of, or by a corporation . . . created . . . within the United States."
Secondly, even if I could accept the conclusion that Senator Lenroot initially read § 526 as permitting a foreign firm to invoke § 526 merely through the artifice of creating a subsidiary, Senator McCumber's response laid to rest any such fear. He reiterated what had been said repeatedly: Section 526 would apply only to a situation in which there has been a "transfer" presumably at arm's length of the trade-mark; and only where the trademark "is owned exclusively by an American" presumably an exclusively American firm. Thus, even if both Senators meant "subsidiary" when they used the word "agent," Senator McCumber's answer squarely negated any suggestion that § 526 would apply; such a situation, "of course, would not be affected by this provision."
C
The sliver of legislative history on which the Court of Appeals relied most heavily in support of its reading of § 526 was the following statement in the Conference Report:
"A recent decision of the circuit court of appeals holds that existing law does not prevent the importation of merchandise bearing the same trade-mark as merchandise of the United States, if the imported merchandise is genuine and if there is no fraud upon the public. [Section 526] makes such importation unlawful without the consent of the owner of the American trade-mark, in order to protect the American manufacturer or producer.. . ." H. R. Conf. Rep. No. 1223, 67th Cong., 2d Sess., at 158.
The Court of Appeals read the statement that § 526 "makes such importation unlawful" as meaning that § 526 would prevent the importation of any merchandise bearing a United *308 States trademark, so long as the imported merchandise is genuine and there is no fraud on the public, even though the holder of the United States trademark is affiliated with the manufacturer. That is, concededly, a plausible reading of that brief passage. But cf. Atwood, Import Restrictions on Trademarked Merchandise The Role of the United States Bureau of Customs, 59 Trademark Rep. 301, 304 (1969) (describing Conference Report as "evidence of the misunderstanding of the facts of the Katzel case"). More plausible, though, is that the first sentence quoted above merely described the well-established legal theory that compelled the result in Katzel, and the second sentence, declaring the unlawfulness of "such importation" referred to the type of importation at issue in Katzel i. e., parallel importation of goods bearing a United States trademark purchased by an independent domestic company from a foreign manufacturer. Only if the second sentence were so limited would § 526 "protect the American manufacturer or producer," as the Conference Report itself says it does, for (as thi