In Equustek Solutions Inc. v Google Inc.,1 the British Columbia Court of Appeal upheld the Supreme Court’s jurisdiction to issue an injunction with worldwide effect forcing Google to remove search results for websites promoting the sale of counterfeit goods. One might be tempted to conclude that simply collecting and indexing data on Canadian residents is enough to establish the jurisdiction of Canadian courts. But that is not what the court said.

The court assumed jurisdiction over Google based upon the localized and personalized nature of both the search results and the ads displayed to BC residents.

The plaintiffs design, manufacture and sell industrial network interface hardware. The defendants are former distributors of the plaintiffs’ product, who allegedly infringed the plaintiffs’ intellectual property rights numerous times, including by passing off the plaintiffs’ product as their own and advertising the plaintiffs’ product for sale but fulfilling orders with their competing product. After a number of court orders were issued against the plaintiffs curtailing their unlawful activities in Canada, they left Canada and began filling orders exclusively through websites hosted outside Canada.

Only Canadian search results blocked

Google, upon the plaintiffs’ request, voluntarily blocked the listing of defendants’ webpages from google.ca search results, but refused to block results on its sites for other countries, including the US google.com site. Plaintiffs therefore sought an injunction to force Google to delete a number of websites (not simply webpages) from its worldwide search results.

General jurisdiction of BC courts

The Court of Appeal determined that because the underlying action was clearly within the Supreme Court of BC’s competence, it had the jurisdiction necessary to issue an injunction. Additionally, it concluded “[th]ere is a real and substantial connection between British Columbia and the facts on which the proceeding against that person is based”2 justifying jurisdiction to issue an injunction.

Google’s connection to BC

The court determined that although Google had no servers, offices or staff in British Columbia, its sale of advertising to BC clients and its data collection through the Googlebot web crawler was an integral part of Google’s global operations that exposed it to restrictive orders from courts in all parts of the world. The court rejected Google’s argument that orders directed against non-parties are restricted to the “contempt exception,” i.e., where non-parties deliberately flout injunctions made against a party.

Freedom of expression outside Canada

The only comity concern articulated in the case was with respect to perceived interference with freedom of expression in other countries. The court held that because the defendants’ advertising and sales violated plaintiffs’ intellectual property rights, it was unlikely that the restrictive order would offend the sensibilities of any other nation. Moreover, Internet-related orders with international effects emanating from other jurisdictions are not perceived as contrary to the interests of comity.

Online commerce and extra-territorial injunctions

The pressure for injunctions with extra-territorial effect is mounting in this age of global, Internet-based business and widespread access to personal information. The “right to be forgotten” in Europe is but one attempt to balance individual rights with freedom of expression. Most recently, the French Commission Nationale de l’Informatique et des Libertés (CNIL) issued an order requiring Google to implement delisting requests on its search engines worldwide. Such a sweeping order appears to ignore the concept of comity and its impact on freedom of expression in other countries. A more in-depth discussion of privacy, access to information and the “right to be forgotten” by an international panel of Norton Rose Fulbright lawyers can be viewed here.

Take-aways

  • A person or company “doing business” in Canada, is potentially subject to the courts’ jurisdiction.
  • Internet-based businesses providing products or services to persons resident in Canada may be subject to Canadian courts’ jurisdiction even though they have no staff or other presence in the country.
  • Non-parties, including Internet service providers and data processors, may be subject to restrictive orders where a justiciable issue exists, including intellectual property infringement.
  • The potential impacts of such restraining orders on freedom of expression are not necessarily a bar to their issuance, especially where other means to impede the illegal action are limited.