The appellant, an unauthorized distributor, imported genuine Côte d'Or and Toblerone chocolate bars into Canada.
The respondent, the exclusive Canadian distributor, registered the logos on the wrappers as copyrighted artistic works and sued the appellant for secondary infringement under s. 27(2)(e) of the Copyright Act to prevent parallel importation.
The Supreme Court of Canada allowed the appeal, holding that the respondent could not use copyright law to prevent the importation of the chocolate bars.
The Court found that an exclusive licensee cannot sue the owner-licensor for copyright infringement, meaning there was no hypothetical primary infringement to ground a claim for secondary infringement.
Furthermore, the incidental presence of copyrighted logos on the wrappers did not bring the chocolate bars themselves within the protection of the Copyright Act.
