Citation[]
Brilliance Audio, Inc. v. Haights Cross Communication LLC, 474 F.3d 365, 81 U.S.P.Q.2d (BNA) 1568 (6th Cir. 2007) (full-text).
Factual Background[]
Brilliance Audio, Inc. is the copyright owner of a number of sound recordings, more specifically audiobooks, and the holder of a federally-registered trademark in the “Brilliance” mark. It is in the business of producing versions of its audiobooks for retail sales (“retail editions”) and for libraries and lending institutions (“library editions”). Though the editions are packaged and marketed differently, the record does not state if there are differences in the underlying recordings.
Brilliance has brought this suit based on copyright and trademark infringement alleging that Haights is repackaging Brilliance’s retail editions and selling them as library editions. The district court dismissed the claims under a summary judgment motion citing the “first sale” exception to the infringement allegations.
Appellate Court Proceedings[]
The appellate court reversed the dismissal of Brilliance’s trademark infringement claims and affirmed summary judgment of their copyright infringement claims.
Under the "first sale" exception in trademark law, the first purchaser of a trademarked item can resell the item without being susceptible to a trademark infringement or unfair competition claim. To qualify for this exception, a reseller must adequately repackage the item so that "the public has adequate notice that the purchaser has repackaged the trademarked item" and the item sold must not be "materially different than those sold by the trademark owner." The court held that these questions were fact-based and could not be properly decided on summary judgment.
Under copyright law the owner of a copy of a work is free to resell the work subject to the exception contain in 17 U.S.C. §109(a) — The Record Rental Amendment of 1984. The appellate court cited Section 109(a) in relevant part:
| “ | Notwithstanding the provisions of subsection (a), unless authorized by the owners of a copyright in the sound recording[,] . . . and . . . in the musical works embodied therein, [] the owner of a particular phonorecords . . . may [not], for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecords . . . by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending. | ” |
The court agreed with Haights, stating that the statute applies only to sound recordings of musical works. The court found the language of the statute to be ambiguous and looked to the legislative history. Evidence of Congress contemplating an exception for sound recordings other than musical works was not found in the history and the appellate court affirmed the dismissal of the copyright infringement claims.