In an earlier post we discussed the use of copyright to control product distribution. In the 2005 case of Euro Excellence, Inc. v. Kraft Canada Inc., the Federal Court of Appeal upheld an injunction against an unauthorized distributor of “grey market” Toblerone chocolate bars, based on an innovative claim of copyright infringement. Under that decision, copyright seemed to provide a useful tool against parallel importers, where legitimate products are imported into a territory outside the official manufacturer’s supply chain. Trade-mark law does not provide any help in this area after the decision in Coca-Cola v. Pardhan, another Federal Court of Appeal decision. Copyright however seemed suitable to the task.
The case was appealed up to the Supreme Court of Canada and in its convoluted decision (Euro-Excellence Inc. v. Kraft Canada Inc., 2007 SCC 37), the Court now appears to have removed copyright as a tool in parallel importation cases. The majority agreed that copyright protection should extend to product labels and agreed that if a work is entitled to copyright protection, then it should be protected like any work, without an analysis of whether the work is “incidental” or whether the copyright holder has a “legitimate economic interest”. But the majority decision also made it clear that copyright is no longer a viable option for manufacturers in parallel import or “grey market” cases in Canada where the local distributor relies on an exclusive license to prevent importation.
Calgary - 12:30 MST