The Supreme Court of Canada has granted leave to appeal from Equustek Solutions Inc. v. Google Inc., a decision that affirmed a global restraining order against Google Inc. (Google) and Google Canada Corporation (Google Canada), despite neither entity being physically located in Canada or being a party to the main action. 

BACKGROUND 

In the main action, the plaintiff manufacturer of computer networking devices claimed that the defendants had stolen trade secrets and used these secrets to develop their own products online. The defendants initially carried on business in B.C., but eventually marketed their products through a variety of websites, ignoring various court orders to stop doing business online.

While Google was not a party to the main action, the defendants’ websites were listed on its search engine. Google initially complied with the plaintiffs’ request to remove specific web pages (or URLs) from searches originating from Canada (through Google.ca), but it was unwilling to categorically block the defendants’ websites appearing in any search results, done from any Google website, from any location in the world.

The plaintiffs subsequently sought an injunction against Google preventing them from including the defendants’ websites in its search results.

B.C. SUPREME COURT

In Equustek Solutions Inc. v. Jack, the B.C. Supreme Court ordered Google Inc. and Google Canada to remove all of a company’s websites from its search results. Although Google is incorporated in Delaware and operates out of California, the chambers judge of the B.C. Supreme Court determined it had territorial competence over Google, noting that Google carried on business in B.C. The chambers judge applied the standard test for granting an injunction to Google, a third party, ruling that Google would not be inconvenienced to a large degree if an injunction were granted, while the plaintiffs had suffered irreparable harm from the defendants’ conduct, which Google had inadvertently facilitated.

As noted in our June 2014 Blakes Bulletin: Can’t Search This: B.C. Court Grants Global Restraining Order Against Google, this decision was the first time a Canadian court had made such an order against a non-party with global implications. 

COURT OF APPEAL

The B.C. Court of Appeal dismissed Google and Google Canada’s appeal from the order of the B.C. Supreme Court. As discussed in our June 2015 Blakes Bulletin: Still Can’t Search This: B.C. Court of Appeal Affirms Global Restraining Order Against Google​, the Court of Appeal noted that the B.C. Supreme Court’s territorial jurisdiction over the underlying subject matter of the dispute was sufficient to provide it with competence over the injunction application, a potentially significant expansion of the courts’ power over non-resident, non-parties. The Court of Appeal also agreed with the B.C. Supreme Court’s decision that B.C. courts had jurisdiction over Google itself, noting that Google carried business in B.C. through its advertising, search and proprietary information activities. 

Since the lower court had jurisdiction over Google in this case, the Court of Appeal held that there was no bar to granting an injunction on the basis that the court’s order may impact activities in other jurisdictions. However, the Court of Appeal agreed with the intervenor Canadian Civil Liberties Association’s submission that B.C. courts must not grant orders with extra-territorial effects that have a realistic possibility of offending another state’s core values on freedom of expression. On the facts of this case, though, the Court of Appeal held there was nothing impacting foreign freedom of speech or lawful activity.

IMPLICATIONS 

On further appeal, the Supreme Court of Canada will have the opportunity to clarify a number of important issues arising from these decisions, including the test courts are to apply for injunctions directed against non-parties (especially non-resident parties) and how courts are to factor comity concerns in to orders that will have an impact on the fundamental values of other countries.