Leave to Appeal to SCC: Google Inc v Equustek Solutions Inc (BCCA)
March 7, 2016
On February 18, 2016, the Supreme Court of Canada granted Google Inc’s (“Google”) application for leave to appeal from the British Columbia Court of Appeal in Equustek Solutions Inc v Jack, 2015 BCCA 265, which upheld an order requiring Google to de-index certain webpages from its search results worldwide.
In December 2012, Equustek Solutions Inc (“ESI”) was granted an order prohibiting Morgan Jack and Datalink Technologies Gateway Inc (“the Defendants”) from selling counterfeit ESI products through various websites. Operating entirely as a virtual company, the Defendants refused to comply with court orders to shut down their websites. Google voluntarily removed specific URLs requested by ESI, but only on <www.google.ca> and not <google.com>.
ESI sought an injunction in 2014 to prevent the Defendants’ websites being listed in search results by requiring Google to block, worldwide, an entire category of URLs. Google argued British Columbia lacked jurisdiction as Google is neither in British Columbia, nor does the injunction relate to activities within British Columbia. Even if the Court did have jurisdiction, the injunction would amount to a worldwide order that cannot be enforced, and it would intrude into Google’s lawful business as a search engine.
The British Columbia Supreme Court issued the injunction.1 British Columbia Courts had jurisdictional competence: Google had “real and substantial connection” to British Columbia as this matter concerns a business carried on in British Columbia, and the matter pertains to property rights (specifically IP rights) in British Columbia. While advertising alone in a particular jurisdiction alone is insufficient to grant territorial competence, Google was not advertising their own company, but was engaged with customers when providing to them user-specific advertising. Whether California being a more convenient forum is also irrelevant as jurisdiction and forum non conveniens are two different issues.
Regarding authority, the Court can issue an injunction with extra-territorial effect, not an extra-territorial reach, against a non-party where it is just or convenient to do so. The test for an injunction with a worldwide effect for a non-party should be similar to the test for a Mareva injunction: a strong prima facie case and a balancing of the interests of both parties. ESI has both a very strong case (Defendants have been presumed to have admitted the allegations), and are suffering irreparable harm by the Defendants’ ongoing on-line sales. However, Google would suffer no material inconvenience following this injunction since they were asked to remove specific sites from a specific person, not monitor multitudes of websites. Also, taking down these sites is no more a form of censorship than taking down sites that contain hate speech or illegal pornography.
In determining whether the injunction should be upheld, the British Columbia Court of Appeal considered whether (1) Google had a “real and substantial” connection to British Columbia; (2) the injunction could be issued against a non-party to the underlying action; and (3) the extraterritorial reach of the injunction complied with rules of comity.
Territorial jurisdiction could be established based on the overall action, and not the single motion. The facts underlying the action had a “real and substantial” connection to British Columbia, so the Court had territorial competence over Google in any matter stemming from that underlying proceeding. The Court also had in personam jurisdiction over Google as Google carried on business in British Columbia, performing key functions like obtaining data. Secondly, Courts can make orders against non-parties (e.g. subpoenas to witnesses, summonses for jury duty, and orders garnishing wages). As a court of inherent jurisdiction, a province’s Supreme Court’s jurisdiction to grant an injunction is effectively unlimited, so an injunction could be ordered against a non-party to the underlying action. Finally, courts may have in personam jurisdiction over non-residents in a variety of situations. Once jurisdiction is established, an order is not barred simply because it may affect activities in other jurisdictions. Although comity and enforceability must be taken into account, they do not create a blanket rule preventing orders affecting activities in other jurisdictions. The only comity issue argued pertained to freedom of speech, and the actions requested of Google did not rise to the level of “offend[ing] the sensibilities of any other nation”.
The issue of national importance in this case arises from the importance of global search engines to seek information from on-line sources. While the situation faced by ESI has been compared to “whack-a-mole”, making shutting down of the Defendants’ actual websites a non-viable option, search engines like Google are understandably reticent to be roped in to other party’s disputes. The Supreme Court’s guidance as to the circumstances in which Canadian Courts can require search engines to block search results will have to balance access to information and IP holder’s rights.
1 2014 BCSC 1063.
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