Copyright “misuse” as a defence in Canada: the door cracks open a bit further

This article was prepared with assistance from our summer student Elan Foorer.

In Canada, copyright owners are granted exclusive statutory rights under the Copyright Act. These include the right to control the reproduction of a work, amongst other protected uses, and provide important enforcement tools. But they are not without limits – copyright law also recognizes exceptions and defences that constrain enforcement in appropriate circumstances.

Whether those limits may include a defence based on “misuse of copyright” has been an open question in Canada. Copyright “misuse” is a defence recognized in the United States, and is based on a copyright owner having asserted its rights for an improper purpose or in a manner that reaches beyond the proper scope of copyright protection. Over a series of recent Federal Court of Canada decisions, it seems that Canadian law may be open to the viability of such a defence in the right circumstances.

Facts

Zoe International Distributing Inc. (“Zoe”) manufactures and wholesale distributes smoking accessories, and for 20+ years has distributed “roll your own” smoking products. In Federal Court litigation, Zoe asserted, amongst other claims, that the Defendants, Smoke Arsenal and Vanpak Limited, infringed its copyright in artwork appearing on smoking accessory product wrappers. In response, the Defendants asserted, inter alia, the defence of copyright misuse based on violations of the Competition Act and the Copyright Act. Zoe brought motions to strike those and other Defendants’ pleadings. The case management judge granted the motions in part, striking the Defendants’ copyright misuse defence but granting leave to amend. 

In Zoe International Distributing Inc. v. Smoke Arsenal Inc., 2026 FC 792, Zoe appealed the decisions, including the copyright misuse defence pleading, arguing it is not recognized in Canada and should have been struck without leave to amend. The Court ultimately dismissed Zoe’s appeal, observing that whether the defence of misuse of copyright in Canada exists has not been definitively ruled upon, and noting that the Federal Court has previously held that “the full merits and intricacies of the doctrine [of copyright misuse] are beyond the scope of a motion to strike” and allowed leave to amend a pleading of the defence as a result. 

The Court concluded that “misuse of copyright is a novel but arguable defence,” the defects in the Defendants’ pleadings were potentially curable, and therefore that granting leave to amend was appropriate.

Why it Matters

In striking the Defendants’ copyright misuse pleadings, the Court assessed the allegations as largely bare. Amongst other things, the Defendants had not adequately explained who within Zoe was involved in the alleged wrongdoing, how the Defendants were prevented from obtaining an adequate supply of products, where and when the conduct occurred, or why the conduct was allegedly illegal.

While the Court did not provide a final checklist for how to plead misuse of copyright in Canada, its decision suggests that, to successfully plead the defence a party must particularize the elements of the misuse as specifically as possible.

What this means for Copyright Owners and Defendants

Copyright owners should continue to ensure that enforcement positions are aligned with the scope of protection provided by the Copyright Act.  While robust enforcement is not improper, the surrounding factual and commercial context of such activities may become fodder for a misuse defence. 

For parties responding to copyright claims, misuse of copyright remains a possible fact-specific defence in Canada, likely available in certain circumstances. It should not be treated as a creating a general defence to copyright enforcement generally. 

Key Takeaway

Whether misuse of copyright is available as a defence in Canada remains an open question, but to have a shot at arguing it, one must plead it with specific material facts. It remains to be seen whether Canadian courts will recognize the defence, and how what is pleaded connects to what must ultimately be proven.

 If you would like to discuss copyright enforcement and protection, please contact a member of our Marks & Clerk Litigation and Copyright teams. 

This article is intended to provide general information only and should not be relied on as legal advice. 

Subscribe to receive more articles like this here.