The taxpayer, which was a distributor of software licensed to it by a non-resident, was entitled to exemption for royalties paid by it to the licensor given that each time it or its sub-distributors earned revenue from the software (through entering into a software sublicence agreement) there was a reproduction of the software.
After noting the broad meaning in the phrase "in respect of" Garon C.J. stated (at p. 934):
"The words 'a copyright in respect of the production or reproduction of any ... work' must therefore be given a broad meaning and would, in my view, encompass any other right connected with the right to produce or reproduce the work, including the right to distribute the work."
He also noted (at p. 935) that s. 212(i)(d)(vi) "exempts from Part XIII tax payments relating to the right to produce or reproduce among other things, a literary work but it does not embrace the right 'to use' for instance, the literary work by the payer for its own internal purposes and not with a view of selling the Software to third parties."