Brilliance Audio, Inc. (Brilliance) (plaintiff) produced and sold audiobooks via exclusive agreements with publishers and authors. Brilliance copyrighted these audiobooks and registered “Brilliance” as a trademark. As part of its business, Brilliance produced two versions of each audiobook. One version was used for retail, and the other was used for libraries and lending institutions. Haights Cross Communications, Inc. (Haights) (defendant) was a competitor of Brilliance in the audiobook industry. Brilliance alleged that Haights was distributing for a profit Brilliance’s retail audiobooks labeled as library audiobooks. Furthermore, Brilliance claimed that Haights used Brilliance’s trademark on these repackaged audiobooks. Brilliance sued Haights for copyright infringement, trademark infringement, unfair competition under federal law, dilution, and common-law trademark infringement and unfair competition. Haights filed a Rule 12(b)(6) motion to dismiss for Brilliance’s failure to state a claim upon which relief can be granted, and the district court granted it. The district court found that the defense of first sale applied to this case. Brilliance appealed the decision.