More on Euro-Excellence v. Kraft
Last Friday, the CounterfeitBlog reported on the Canadian Supreme Court's recent gray market decision in Euro-Excellence v. Kraft. The basis for the majority decision was that (i) Kraft Canada did not own the copyrights in the label designs, but only held an exclusive license; (ii) the owners of the copyrights were Kraft Canada's licensors (and parent companies); (iii) the copyright owners had manufactured and distributed the European chocolate that Kraft Canada was trying to keep out of Canada as infringing gray goods; (iv) the European chocolate label could not be deemed infringing because, under Canadian licensing law, an exclusive licensee has no right to prevent its licensor from using the licensed copyrights in Canada; and (v) Kraft Canada, therefore, could not rely on Section 27(2) of the Canadian Copyright Act to prevent the importation of the European chocolates because it applies only to imported works that would have infringed a copyright if they had been made in Canada by the persons who made them.
It should be emphasized that the outcome of this case would have been different if Kraft Canada had owned the Canadian copyrights in the label designs; i.e., if Kraft Canada's European parents had assigned their copyrights to it, rather than giving it an exclusive license. This distinction may offer a "fix" for companies in the position of Kraft Canada that would like to rely on copyright as a basis for keeping gray market versions of their products out of Canada.