Brilliance Audio, Inc. v. Haights Cross Communications, Inc.

Plaintiff-appellant Brilliance Audio (“Brilliance”) appeals from the district court’s dismissal of its claims for copyright and trademark infringement under Fed. R. Civ. P. 12(b)(6). This case presents a question that has not been considered by this or any other court – whether the record rental exception to copyright’s first sale doctrine, codified at 17 U.S.C. § 109(b)(1)(A), applies to all sound recordings, or only sound recordings of musical works. Specifically, this case asks whether the exception applies to sound recordings of literary works (known as “audiobooks” or “books on tape”). We find that it does not, and thus, the district court did not err in dismissing Brilliance’s claims for copyright infringement. We disagree, however, with the district court’s dismissal of Brilliance’s claims for trademark infringement. Following the law of our sister circuits, we conclude that two exceptions exist to the first sale doctrine under trademark law and that Brilliance’s complaint, construed broadly, has alleged that these exceptions apply in the present case. Thus, we affirm the decision of the district court in respect to the copyright claims but reverse in respect to the trademark claims.

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