25 February, 2016

Retrospective - Worldwide Injunctions on Search Results

Most of us, this writer included, take Internet search engines for granted, especially the research power they provide. Google, Yahoo and Bing offer a battery of tools to find nearly anything you'd want online, however, many of us would not be able to envision a world where their capabilities are restricted. The freedom of the Internet is one of its cornerstones, but it does cast a dark shadow through the very same freedom, for example, offering an avenue for those who wish to share, download and sell illegal materials with relative ease. In the same vein, those protecting their rights (or their online exposure, in lieu of any IP rights) undoubtedly would want to limit the capabilities offered by search engines, whether rightfully so or not. The question of injunctions over search results came to ahead in British Columbia, Canada, nearly two years ago, in a case that will be ultimately decided on by the Supreme Court of Canada in the near future.

The case of Equustek Solutions Inc. v Jack dealt with Equustek Solutions' technology that allows for industrial equipment made by two separate manufacturers to communicate with each other in a variety of ways. The defendants, Morgan Jack, Andrew Crawford, John Doe and Lee Ingraham (and their company Datalink), acted as distributors for Equustek's technology, ultimately conspiring to develop a competing piece of technology called the "GW1000", using their trade secrets attained through their role as distributors. Additionally, Equustek asserted that the competing technology used their logo and name, passing it off as the same (or similar) as the original. The use of the logo and the name (an the sale of GW1000) was conducted online by the defendants on their own website, selling the original product but switching it for their own equivalent once a sale had been concluded. Google, as a third-party, had nothing to do with the sale of the product, but they did display the infringing website as a part of their search results; however, refused to altogether block the defendants' website, voluntarily complying with only a part of the request made by Equustek. The plaintiff then sought a court order for the removal of the website from Google's search results altogether globally.

The Supreme Court of British Columbia then had to answer three questions: (i) Does this Court have territorial competence over a worldwide internet search provider such as Google?; (ii) if the answer to the first question is yes, should this Court decline to exercise jurisdiction on the basis that California is the more appropriate forum?; and (iii) Should the order sought be granted?

Roger Smith was preparing for the inevitable shut down of the Internet
The first question dealt with territorial competence, and whether the Court could rule in a worldwide capacity, especially against a US entity in Google Inc. (and its Canadian subsidiary). The starting point under Canadian law is to establish "...the existence of defined connections between the territory or legal system... and a party to the proceeding or the facts on which the proceeding is based". This, however, is assessed on a balance of probabilities based on submitted evidence, rather than a stricter evaluation of a connection. Due to the heart of the case being the misuse of intellectual property in British Columbia by Datalink, and the business therein, there would be a connection between the region and the proceedings (creating territorial competence under the Court Jurisdiction and Proceedings Transfer Act). Going against this, Google's operation of a website accessible in British Columbia would not, in itself, be enough to establish a firm connection. In the end, Justice Fenlon saw that, in the Court's assessment, Google had a connection with the jurisdiction through its advertising activities in British Columbia, and the active provision of tailored search results therein as well.

As jurisdiction was established, the Court moved onto the question of whether British Columbia would be the appropriate forum, or whether the Court would determine California to be more appropriate, as is allowed under section 11(1) of the CJPTA.

Justice Fenlon deemed that there was no out of court relief available to Equustek, as Google's takedown system was seen as inadequate and not an appropriate remedy to protect any future infringement or sale of infringing goods by the defendants. This established a firmer need to conduct the proceedings in British Columbia, but was not the only consideration contemplated by the Court, as section 11(2) of the CJPTA imposed further factors for considerations. While Justice Fenlon dealt with the majority of the factors briefly, however, she considered the likelihood of enforcement of an order in California at more length. What this writer has to note is the potential negative ramifications of this, and the excessive reach the reach of the question of jurisdiction. Justice Fenlon saw things differently, as, in her mind: "...[the order potentially] would give every state in the world jurisdiction over Google’s search services. That may be so. But if so, it flows as a natural consequence of Google doing business on a global scale". In the end the Court deemed that Google failed to prove that California would be the more appropriate forum for the dispute, and moved onto the final question on whether the order can be granted.

The final question hinged on two aspects: whether an order can be granted against a non-party (with Google being a third-party to the dispute), and whether this order should be made against Google in a worldwide capacity.

There are certain exceptions under Canadian law that allow for the making of an order against a third-party, namely if they have knowledge of a court order and deliberately disobey it, or if that order is necessary for the aiding of fact finding or the administration of justice in any given matter.

As Google were notified by the Court of an order to take down the websites in question, the first exception potentially applied. Although not deliberately done, Google had not complied with the order before the Court of Appeal proceedings due to an administrative oversight. Justice Fenlon also confirmed that the Court could potentially grant a Mareva order (a freezing injunction) in this instance under the second exception to enforce the order against Google. Concluding the Court's position in their ability to grant this order against Google, Justice Fenlon saw that: "...the Court has authority to grant an injunction against a non-party resident in a foreign jurisdiction in appropriate circumstances. The fact that an injunction has not before been made against an internet search provider such as Google is reason to tread carefully, but does not establish that the Court does not have subject matter competence".

The last question on whether the order ultimately should be granted remained as the Court's last point of contention.

The Court considered Google's submissions on why the order should not be granted, which focused on Google's role as a passive third-party and the sheer volume of material it indexes, making it difficult or nigh impossible to police it all effectively and efficiently. Additionally the removal of the websites (or websites in general) under an order would be tantamount to censorship, and that the order sought would be way too broad.

Justice Fenlon disagreed with Google, approving the order. In her judgment, the order would not require Google to monitor its online content or activities, but to simply comply with the order to remove the websites from its services. Google also have complied with the removal of offensive or other illegal content, such as child pornography, doing so at their own behest, clearly showcasing that the removal of the websites would not be censorship or go above and beyond what the service usually does. She also distinguished the potential effect of the order from the purpose of the order itself, even if it gives worldwide effect. The impact of an order is a valid consideration, however, it does not in itself prevent or affect the Court's ability to issue one (and often, this worldwide effect is needed, as in this instance). This would have to be assessed in the light of "...a strong prima facie... or a good arguable case... to cross the threshold, and then to balance the interests of the two parties, having regard to all the relevant factors in each case, to reach a just and convenient result". As Equustek clearly suffered irreparable damage due to the inclusion of the results, and subsequent sale of the goods, the order was deemed to be equitable under the circumstances.

The Court, as said above, issued the order, with Justice Fenlon summarizing the Court's final position succinctly: "The Court must adapt to the reality of e-commerce with its potential for abuse by those who would take the property of others and sell it through the borderless electronic web of the internet. I conclude that an interim injunction should be granted compelling Google to block the defendants’ websites from Google’s search results worldwide. That order is necessary to preserve the Court’s process and to ensure that the defendants cannot continue to flout the Court’s orders".

The case is an incredibly interesting one, with the up-coming Supreme Court decision adding an extra dimension of importance to this saga. The removal of search results is clearly a big point of contention, and should the Supreme Court follow the decision of the Supreme Court of British Columbia, Canada could become the next destination for intellectual property rights holders to better enforce their rights on the Internet. Although the decision will not necessarily change the Internet as we know it, it can have a major impact on the freedom in it (for better or worse) and this writer keenly awaits the decision of the Canadian Supreme Court.

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