Copyright Infringement

An exclusive distributor of copyright owners of chocolate bars in Canada sued a former Canadian distributor for copyright infringement for using the similar artistic works that appeared on his product wrappers obtained from an unnamed source in Europe. The genuine distributor alleged that the distribution in Canada of products by former distributor constituted secondary infringement of copyright contrary to section 27(2e) of the Canadian Copyright Act, which provides that it is an infringement to import a work into Canada for sale if it would infringe a Canadian copyright. The lower courts found the case of the distributor genuine and restrained the former Canadian distributor from importing and distributing the goods.

However, the Supreme Court of Canada overturned the lower court decisions and held that the impunged works imported and distributed by the former distributor would have infringed copyright if they had been made in Canada by the persons who made them in Europe. The Supreme Court ruled that because a copyright owner could not be liable to its exclusive licensee for infringement, there was no hypothetical infringement and thus no violation of this section. Thus the Supreme Court refused to allow the owner of an exclusive copyright licence to use the copyright that subsists in the artwork on product packaging to prohibit the importation of grey market goods into Canada

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Copyright Infringement - Canada