On June 11, 2015, the B.C. Court of Appeal released its highly anticipated decision in Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265. This landmark decision upholds the right of an aggrieved party to obtain an injunction to prevent an internet search engine, in this case Google, from including offending websites in search results. This decision is expected to have wide-ranging ramifications for battling illegal conduct on the internet, including in respect of defamation, trademark infringement and passing off, copyright infringement, invasions of privacy, and other forms of unlawful activities on the internet. David Wotherspoon and Daniel Byma of Fasken Martineau acted for the Electronic Frontier Foundation, one of the interveners in the appeal.
The plaintiff commenced an action in passing off, alleging that the defendants were selling counterfeit versions of the plaintiff's network interface products. The defendants sold the impugned products on various websites. They relied on internet search engines, including Google, to direct potential customers to their websites.
Google voluntarily agreed to remove 345 webpages from search results on Google.ca. However, the plaintiff asserted that this was insufficient, because the defendants simply moved the offending content to new webpages on their websites, and the majority of online sales are to purchasers located outside of Canada (who would not be searching on Google.ca).
Equustek sought an interim injunction restraining Google from including the defendants' websites in Google search results worldwide. This was a novel approach—not only because Google was not a party to the litigation and was a non-resident corporation, but also because the order sought would restrain search results across jurisdictional boundaries.
The lower court ruled, in Equustek Solutions Inc. v. Jack, 2014 BCSC 1063, in pertinent part, that: "Within 14 days of the date of this judgment, Google Inc. is to cease indexing or referencing in search results on its internet search engines the websites listed in Schedule A, including all of the subpages and subdirectories of the listed websites, until the conclusion of the trial of this action or further order of this court." Google appealed from the order.
The Appeal Decision
The issues on appeal were whether the B.C. courts had jurisdiction to make an order against a non-party non-resident corporation, and whether the courts had jurisdiction to restrain the non-party's behaviour outside of Canada.
The Court of Appeal ruled that under the Court Jurisdiction and Proceedings Transfer Act, territorial competence over the action between Equustek and the defendants was enough to establish that B.C. courts had jurisdiction to issue the injunction application against Google. In addition, it was found that court had in personam jurisdiction over Google. The court concluded that Google does business in B.C. based on: Google's activities in gathering data in B.C., distributing targeted advertising to B.C. users, and selling advertising space to B.C. businesses. In addition, Google's services were found to be closely connected to the substance of the lawsuit as the defendants relied on the search engine to direct potential customers to their websites.
Google argued that if B.C. courts exercised jurisdiction over Google's search services, then courts around the world could similarly claim jurisdiction. The court stated that "it is the world-wide nature of Google's business and not any defect in the law that gives rise to that possibility". In response to Google's position that the extraterritorial reach of the injunction violated principles of comity, the court stated that there was no realistic assertion that a limited order removing the defendant's websites from Google search results pending trial would offend the core values and sensibilities of other nations. As there was no suggestion that the orders made against the defendant constituted an inappropriate intrusion on free speech, it followed that the ancillary order against Google likewise did not violate freedom of expression.
Implications of the Decision
Equustek Solutions Inc. v. Jack is a historic decision and is expected to have far-reaching implications. With the global reach of the internet and e-commerce, the power to enforce rights in respect of harmful conduct emanating from outside of Canada is a matter of vital significance to many organizations and individuals. Although it remains to be seen whether a permanent injunction could be obtained to prevent a search engine from including offending websites in search results, the decision may provide plaintiffs with an effective means to mitigate the harms that can be caused by domestic and foreign-based defendants through the internet.
The decision may provide plaintiffs in other cases with a means to mitigate the harmful effects of websites which contain defamatory material, sensitive or embarrassing personal information published without consent, or sites which constitute, or facilitate, infringements of intellectual property or other rights. The case has been watched for some time because of its potential to introduce in Canada a right akin to the 'right to be forgotten (PDF)' which has emerged in the EU.
On the other hand, the decision does raise important and challenging questions in respect of freedom of expression, the role and responsibilities of internet intermediaries (such as search engines), and the jurisdiction of the courts. It is not difficult to imagine scenarios in which a foreign court order may have adverse effects for Canadian organizations and individuals. For example, if, in a foreign proceeding, a litigant alleges that a Canadian entity is infringing their rights under the laws of that jurisdiction, and the court orders Google to exclude from its search results websites relating to the Canadian company, the Canadian company could suffer harm in a scenario where it may not have violated any Canadian laws or even have defended itself in the foreign court.
Equustek Solutions Inc. v. Jack presents issues which would appear to be ripe for consideration by the Supreme Court of Canada and it is expected that leave to appeal will be sought.
This bulletin was written with the collaboration of Clara Rozee.