The British Columbia Court of Appeal released its highly anticipated decision in Equustek Solutions Inc. v. Google Inc.[1] on June 11, 2015. The Court of Appeal upheld the right of an aggrieved party to obtain an injunction against an internet search engine, such as Google, from including offending websites and domains in its search results worldwide. One can immediately fathom a wide range of online misconduct whereby an aggrieved party could apply for a similar injunction against a search engine including defamation, trademark and copyright infringement, infringement of privacy, and other unlawful activities on the internet.
One must be aware that the injunction granted was interlocutory, meaning that the order could be varied by the Court upon application by an interested party and is limited in time until conclusion of the underlying proceedings or otherwise ordered by the Court.
Facts
The defendants at one time were distributors of the plaintiff’s specialty products, network interface hardware. The relationship soured when the plaintiffs discovered the defendants were selling and distributing their own competing product, utilizing trade secrets of the plaintiff, and passing off the counterfeit product to unsuspecting clients.
Upon this discovery the plaintiffs successfully commenced an action for passing off. The Court ordered the defendants to cease advertising the plaintiffs’ products on their websites and redirect customers to the plaintiffs’ website, as well as disclose their customers to the plaintiffs. The defendants failed to comply with the Order, moved their operations out of Vancouver offshore to an unknown location, and quit defending the action in British Columbia. The defendants abandoned the proceedings.
Google’s Involvement
To counter the evasive actions of the defendant the plaintiffs approached Google and requested the search engine to cease indexing the defendant’s known domains, and remove the domains from Google’s search results. Google denied the request and instead agreed to remove 345 specific URLs from its search results. Further, the removal of the URLs was limited to Google.ca. The defendants responded simply by moving the offending webpages to different URLs within their domain. The battle transformed into a child’s game of Wack-a-Mole.
Thereafter the plaintiffs successfully obtained an interlocutory injunction requiring Google to cease indexing the domains and websites of the defendants in its search results worldwide.[2] This corrective action went further than previous remedies offered by the court. The plaintiffs presented evidence showing that every time Google delisted a listing the defendants simply moved the content to another URL within their domain. Further, the defendants were successfully marketing and selling the counterfeit goods to international buyers beyond the borders of Google.ca. These buyers were accessing the infringing content using their domestic Google search engine.[3] This Order is what Google appealed to the B.C. Court of Appeal.
Court of Appeal Decision
The Court of Appeal dismissed Google’s appeal. Google argued that the Order was beyond the jurisdiction of the Court, that the Court improperly made an Order against an innocent non-party to the litigation, and that the Order had an impermissible extraterritorial reach as it required delisting of the search results worldwide.
With respect to territorial competence the Court dismissed this issue quickly noting that since the Court had territorial competence over the underlying action, the Court also had territorial competence over the injunction application.
The Court then went on to examine whether Google is substantially connected to the jurisdiction of British Columbia such that the Court could assume in personam (meaning directed toward a person) jurisdiction over the search engine. In personam jurisdiction is routinely assumed over businesses and companies by examining the location of the behaviour in dispute. When one attempts to examine the behaviour in dispute of online activities the exercise becomes more difficult. The Court noted that passive websites alone would not give it jurisdiction, nor would the additional fact that the website advertises in the jurisdiction. The Court requires more for it to assume in personam jurisdiction; however it noted that drawing the line is a constant struggle in the new global digital economy.
The Court relied on three findings that led it to find in personam jurisdiction over Google:
- Google’s website is not passive. When one enters a search query the auto-complete function suggests a selection of search queries based on the user’s previous searches and trending searches in the local area.[4]
- Google sold advertising to clients located in British Columbia. The Court differentiated this business operation, which creates revenue for Google, from the case where Google advertises its services in the jurisdiction.
- Further, Google relies on users’ data to deliver its service. The Court found that the gathering of information through proprietary web crawler software (known as “Googlebot”) takes place in the jurisdiction of British Columbia. An integral part of Google’s business (user data mining) takes place within the jurisdiction. The collection of user data is key to Google’s analytics for providing high quality search results, therefore the business conducted in B.C. was the same as the business targeted in the injunction.
One should note that the Court in rendering its decision focussed on reducing the harm suffered by the plaintiff’s business which is located within the jurisdiction even if it required a remedy that would have a worldwide effect.
The Court rejected Google’s assertion that principles of comity and judicial pragmatism should limit the extraterritorial reach of the injunction. Google argued that the Court would not be able to enforce the world wide injunction and for reasons of comity the Court should refrain from directing the activities of persons in other jurisdictions as it would expect courts in other jurisdictions to reciprocate such principles. The Court relied on the finding of in personam jurisdiction. Once found, the fact that the order may affect activities in other jurisdictions is not a bar to making such an order.
Impact
Court orders with extra-territorial reach are the new reality for remedying illegal behaviour online. As Google increasingly becomes central to e-commerce by connecting the market to online stores Brand owners can take solace following this sensible decision by the Court. Counterfeiters and Brand pirates will now have a more difficult time ignoring the law of the land while seeking refuge on the Internet.
The applications of this decision are endless. One can imagine many instances where offending content should be removed from the internet but hosts are reluctant to co-operate. [5] If one can show that the offending content is unlawful and such content should be removed from the Internet, this decision offers a remedy by which such an order can be enforced effectively.
Freedom of speech advocates fear the possible abuse of this remedy, and rightly so. In the present case freedom of speech was not at issue. The defendants improperly used confidential information and marketed counterfeit goods, infringing the intellectual property of the plaintiffs.
Given the jurisdictional issues that arise due to the borderless nature of the Internet and e-commerce there is no doubt in the author’s mind that the Supreme Court will take a long look at this case and ultimately affirm the jurisdictional principles articulated by the Court of Appeal.
[1] The Court of Appeal’s full decision can be accessed here http://www.canlii.org/en/bc/bcca/doc/2015/2015bcca265/2015bcca265.html.
[2] Equustek Solutions Inc. v. Jack, 2014 BSSC 1036 (CanLII)
[3] Such domestic Google search engines include Google.com (USA) and Google.com.mx (Mexico).
[4] In Germany, Google was held liable for defamation due to the auto-complete function. The Court found it was Google’s responsibility to block libelous words that appear next to a name via the auto-complete function if Google has previously been alerted to the defamatory words. Please see http://searchengineland.com/germany-says-google-must-block-libelous-words-added-with-autocomplete-function-159436.
[5] Such as The Right to Be Forgotten case where Google was ordered by the European Court of Justice to remove links upon request that are inadequate, irrelevant, no longer relevant or excessive. Please see http://ec.europa.eu/justice/data-protection/article-29/documentation/opinion-recommendation/files/2014/wp225_en.pdf. It is important to note that Google is only required to delist the offending results in Europe and not worldwide.
Daniel Nashid
Barrister & Solicitor
416.892.2509
[email protected]