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.

19 February, 2016

Plain and Simple - Australia Wins Plain Packaging Challenge in Asia

Plain Packaging, the initiative to effectively remove all identifying markings (one could say the only distinctive features in tobacco), is a debate that has been raging on for years, with both sides voicing very valid concerns. Australia has been on the forefront of plain packaging, passing the Tobacco Plain Packaging Act 2011 over 5 years ago, and the Act has not been without its challenges. Currently there still are suspended proceedings at the WTO, initiated by Ukraine, over the legality of the Act (discussed, prior to the suspension, here); however, this has not been the only battleground the Act has been fought over in.

In a recent action in the Permanent Court of Arbitration, Philip Morris Asia Limited (Hong Kong) challenged the legislation under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments, which sets certain rules for both countries in relation to foreign investments from those countries. These are, inter alia, that "[e]ach Contracting Party shall encourage and create favourable conditions for investors of the other Contracting Party to make investments in its area" and that "[i]nvestors of either Contracting Party shall not be deprived of their investments nor subjected to measures having effect equivalent to such deprivation in the area of the other Contracting Party except under due process of law". The latter of the two is the more important argument, as Philip Morris argued that Australia infringed this Article (Article 6) through its plain packaging law. Additionally Philip Morris argued that the law did not treat their investment fairly and equally (as mandated by Article 2(2)).

Without discussing the merits of Philip Morris' case, Australia argued a lack of proper jurisdiction for the Court of Arbitration, as, among other factors, Philip Morris Asia had only acquired the full shareholding of their Australian counterpart after the introduction of the legislation, leaving them fully aware and accepting of the potential negative influence on their investment by the law's passing.

The Tribunal decided on this late last year (with the decision not having been published as of yet, due to confidentiality reasons, which this writer was waiting for) that it did not have jurisdiction to hear the case, and dismissed Philip Morris Asia's case.

The decision, albeit very low in substance of the intellectual property laws that underpin plain packaging, is an interesting one, and a worthwhile illustration of the power of international trade agreements. The Transatlantic Trade and Investment Partnership (TTIP) and the controversy surrounding it only makes this more pronounced, which could, potentially, afford similar routes for corporations to challenges laws that make like difficult for them. In any event, this writer found the case interesting, although underwhelming in its substance, and would have liked to see things debated in more length as to the actual law and its possible infringement of the Agreement.

Source: Sydney Morning Herald

10 February, 2016

Rights Resurrected - The Use of Abandoned IP Rights

Intellectual property, much like many other forms of property, can become either useless or worthless to a rights holder, even if that would not be the case as it stands when the rights are let go or forgotten. A good example of this is the recent re-emergence of Crystal Pepsi; a clear Pepsi cola drink that was sold during the 1990s. Pepsi had registered the name Crystal Pepsi as a trademark, which it promptly abandoned when the drink failed to become popular. Due to a surge in demand, Pepsi reintroduced the product, and would, arguably, use the previous goodwill associated with the product to protect it (and they did successfully register the trademark again late last year). This begs the question, can you use any abandoned rights you may have in your goods or services, or any other works?


Copyright, by its nature, is automatic, and requires no real action on part of the copyright holder. This means that a lack of use does not impact the rights given to the author of any given work, and thus copyright cannot be 'abandoned' through inactivity. In the US the situation is slightly different, and although rights are afforded through common law, one should still register their copyright in order to fully benefit from the federal protection afforded to authors (although a lack of registration does not lead to an 'abandonment' of rights).

In the UK there is no express provision for the abandonment of copyright, and therefore there is no real case of copyright revival, but one could argue that the copyright holder, in ignoring his rights and allowing for the free use and sharing of his works, could be 'abandoning' their rights to the works. One still has to appreciate that the copyright holder can at any time reassert their rights, and thus the copyright in the works is newly resurrected (although, as evident from the above, was never gone to begin with).

Our cousins in the United States do accept the abandonment of copyrights in works. The current law was explained in Capitol Records, Inc v Naxos of America, Inc, where the Court of Appeals set out that "...[the] abandonment of copyright requires (1) an intent by the copyright holder to surrender rights in the work; and (2) an overt act evidencing that intent". Arguably this could be achieved through a statement or the issuance of a public domain licence, or even through another act that shows a clear intent to abandon the rights you have in any given work (although inaction as to the works' protection would not necessarily be enough). It is unclear whether the rights holder could relinquish their rights post-abandonment, but arguably the parties who have used those works during the period of abandonment would clearly be protected.


As illustrated by the above example involving Pepsi, it is very possible to abandon a trademark and re-apply for it (i.e. an alternative), potentially re-appropriating that mark. What is more relevant in the context of trademarks is the potential loss of goodwill, especially in relation to passing off as a common law right, rather than a right under the Trade Marks Act 1994.

Rodney refused to abandon any invention (Source: Gunshow)
In the case of Star Industrial Co Limited v Yap Kwee Kor the Privy Council considered this question, and reiterated the existing tangible connection between a company and its goodwill; however, the latter cannot exist in a vacuum outside of the company's business activities. If a company, with intention, abandons the goodwill in a given product or company, it cannot use it after the fact. This is not as clear as that, however, as in Maslyukov v Diageo Distilling Limited Justice Arnold saw that "...the test is whether the relevant business has been abandoned so as to destroy the goodwill. Mere cessation of business is not enough... [a] cessation of production of goods or provision of services does not necessarily mean that there has been a cessation of business capable of sustaining goodwill". What his judgment seems to illustrate is a need for an active component of abandonment, rather than just a mere stoppage in trading or production, indicating clearly and without a doubt the company wished to abandon all goodwill in the relevant goods or services.

One can 're-appropriate' goodwill in goods even after the end of their production, provided that some actions have been taken to preserve that goodwill (e.g. conducting business in the area of commerce, retention of the subsidiary or corporate entity that held those rights etc.) and no active efforts have been made to truly abandon those rights. This would enable the party to assert those rights under common law in passing off, as if those rights had never been 'abandoned'.


One can abandon a patent, or an application for a patent, at any time. This would entail either not paying the requisite maintenance fees on the patent (automatically lapsing the patent), or otherwise surrendering the rights to the invention. This is not, however, the end, as it is possible to seek the restoration of the patent within 13 months of it lapsing, although only in the case of 'unintentional' lack of payment of fees. Once the patent has fully lapsed the rights to the patent expire, and there is no way to reclaim those rights (unlike in copyright or under passing off).

As is clear abandoning the rights in your intellectual property might not pay dividends, although does give the rights holder the flexibility to avoid additional legal costs or fees associated with the rights and asserting them. Nevertheless, it still might be possible to relinquish the rights you have abandoned, in very limited circumstances. This writer is a staunch believer in the retention of ones rights, but has to concede that this might not be the best option for every rights holder.