The Queen v. St. John Shipbuilding & Dry Dock Co. Ltd., 80 DTC 6272, [1980] CTC 352 (FCA) -- summary under Article 12

Thurlow, C.J. stated (p. 6275) that "'royalties' ... connotes a payment calculated by reference to the use or to the production or revenue or profits from the use of the rights granted" and that "neither 'rentals' nor 'royalties', in the ordinary connotation ... includes a lump sum payment for the use of or for the privilege of using property indefinitely." Accordingly, lump sum payments made by a Canadian shipbuilder for technical data contained on tapes pursuant to non-exclusive licence that placed no relevant restrictions as to how many times or over what period of time the shipbuilder could use the data in its own operations, did not represent "rentals and royalties" for purposes of paragraph 6(a) of the Protocol to the 1942 Canada-U.S. Convention.