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This information is taken directly from the court opinion. It is not taken out of context nor is it altered.

From Sebastian v Longs Drug Stores, 53 F.3d 1073 (9th Cir 1994) Sebastian argues the "first sale" doctrine does not apply when resale by the first purchaser under the producer's trademark creates a likelihood of consumer confusion. Sebastian asserts that a survey it commissioned indicates that Longs's action of stocking and reselling Sebastian products bearing the collective mark has in fact confused consumers "into believing [falsely] that there is some type of affiliation, association, or approval between Longs and Sebastian...."Sebastian's premise is false. The "first sale" rule is not rendered inapplicable merely because consumers erroneously believe the reseller is affiliated with or authorized by the producer. It is the essence of the "first sale" doctrine that a purchaser who does no more than stock, display, and resell a producer's product under the producer's trademark violates no right conferred upon the producer by the Lanham Act. When a purchaser resells a trademarked article under the producer's trademark, and nothing more, there is no actionable misrepresentation under the statute. The Fifth Circuit's decision in Matrix Essentials v. Emporium Drug Mart, 988 F.2d 587 (5th Cir.1993), and this circuit's decision in NEC Electronics v. CAL Circuit Abco, 810 F.2d 1506 (9th Cir.1987), undercut Sebastian's argument. Matrix, like Sebastian, wished to channel the resale of its trademarked hair products through professional salons. Matrix placed labels on some containers reading "Sold Only in Professional Salons." Matrix sued Emporium Drug Mart for reselling Matrix hair products purchased in the open market, arguing that "by stocking Matrix products, Emporium is deceiving the public into believing that Matrix has authorized Emporium to do so." Id. at 590. The Fifth Circuit rejected Matrix's argument, stating, "[a]bsent more culpable conduct on the part of the seller, we are unwilling to find misrepresentation in the mere act of putting a manufacturer's product on one's shelf and offering it for sale." Id. at 593. In reaching this conclusion, the Fifth Circuit relied in part upon this court's holding in NEC, which applied the "first sale" doctrine despite the district court's finding "that some purchasers ... mistakenly thought their chips were protected by [the producer's] servicing and warranties." NEC, 810 F.2d at 1508.