Monday, February 5, 2007
Sixth Circuit Decides Whether First Sale Doctrine Applies in Repackaged Recordings ("Audiobooks") Cases
In Brilliance Audio v. Haights Cross Communications, the plaintiff-appellant claimed that Haights Cross Communications had infringed its copyright and trademark by repackaging Brilliance's retail audio recordings as "library editions" and then renting, leasing, and lending them. Said the Sixth Circuit, "Brilliance has never authorized Haights to engage in this activity. Brilliance also claims that Haights uses the Brilliance mark on the repackaged products, which constitutes trademark infringement and results in the misrepresentation that Haights has a relationship with Brilliance and that its activities are authorized." The District Court had dismissed the complaint, "because the defense of first sale appeared on the face of the complaint. Construing the complaint broadly, and in the light most favorable to the plaintiff, we find this ruling to be in error....[t]here are two situations in which resale of a product does not fall under the first sale exception. The first...is when the notice that the item has been repackaged is inadequate....The second...is "when an alleged infringer sells trademarked goods that are materially different than those sold by the trademark owner."...."
Examining the statute carefully, the Court concluded that "the language of [sec] 109(b)(1)(A) is not unambiguous....[T]he combination of the legislative history, the context in which the statute was passed, and the policy rationales behind both [sec] 109 and copyright law in general provide strong evidence that Congress intended to exclude only sound recordings of musical works from the first sale doctrine." The Sixth Circuit concluded that the statute should be construed narrowly and reversed the district court's dismissed of the trademark claims. It affirmed the dismissal of the copyright claims. Read the entire ruling here.