Facts

Following the decision last month in which Google Inc. (“Google”) was ordered by the European Union’s Court of Justice to “forget” certain personal information[1], the Supreme Court of British Columbia (the “Court”) issued an interim injunction on June 13, 2014 against Google to remove certain websites from its worldwide Internet search engines. This interim injunction is part of an underlying action launched by Equustek Solutions Inc., a company that manufactures and sells complex industrial networking devices, (“Plaintiff”) against Datalinks and related companies (“Defendants”).

In the underlying action, the Plaintiff claimed that the Defendants, while distributing the Plaintiff’s products, stole some of its trade secrets in order to design and manufacture competing products. Despite several Court orders prohibiting the Defendants from selling the competing products, they continued offering it through a complex network of websites.

Neither Google nor Google Canada Corporation (“Google Canada”) were parties to the underlying action. Google Canada had voluntarily agreed to remove specific webpages or URLs from its search engine. However, Google was not willing to block/delete an entire category of URLs from its worldwide search engines, albeit Google did acknowledge that it had the ability to do so. The Plaintiff’s position was that an interim injunction should be granted against Google because its search engines facilitate the Defendants’ ongoing breach of the Court’s orders by leading customers to the Defendants’ websites.

Issues

The application by Plaintiffs for injunctive relief raised three main issues:

  1. Does the Court have territorial jurisdiction over a worldwide Internet search provider, such as Google?
  2. If the answer to the first question is affirmative, should the Court decline to exercise its jurisdiction on the basis that California is the more appropriate forum?
  3. Should the order sought by the Plaintiff be granted?

Territorial Jurisdiction

The Court notably applied section 10 (a) and (h) of the Court Jurisdiction and Proceedings Transfer Act[2]  and stated that the interim injunction sought concerns a business that Google carries on in British Columbia, although neither Google nor Google Canada has a place of business in British Columbia. Google argued that simply operating on the Internet does not subject it to the Court’s territorial jurisdiction. In response, the Court explained that Google’s Internet search websites are not passive information sites, and that Google actively provides search services to British Columbia residents.

In addition, Google sells advertising to British Columbia residents. As it did before the European Court of Justice inGoogle v. AEPD, Google argued that the Court cannot assume jurisdiction over its search services, because its advertising and search services are completely unrelated. The Court dismissed this argument, stating that the two parts of Google’s businesses are inextricable linked – neither service can stand alone. Hence, the Court found that Google does do business (including providing search services) in British Columbia. The Court therefore ruled that it had territorial jurisdiction over Google to issue the interim injunctive order sought.

Appropriate Forum

The Court concluded that California was not the more appropriate forum for determining whether injunctive relief should be granted in the circumstances. The Court established that the Plaintiff had no out-of-court remedy available to it since Google refused to remove the Defendants’ webpages from its worldwide search engines and such a removal is the only efficient means to enforce the Court orders. Indeed, the Defendants’ blocked websites appeared on searches performed in any country other than Canada and appeared in Canada when the search was performed using a Google website other than Google.ca (Google.com, Google.fr, etc.).

Also, although the Court accepted that Google had a strong presence in and connection to California,  after examining the criteria of section 11(2) of the CJPTA, the Court decided that Google’s connection to California in the circumstances did not justify a forum change. Lastly, since Google provided no evidence regarding California law, the Court rejected its argument that an injunctive order made in California would be better enforced than one issued in British Columbia.

Order Sought

The Court had to determine whether it had subject matter jurisdiction. Google argued that the Court lacked jurisdiction because the Plaintiff’s order was sought against a non-party and would require the Court to make an order with worldwide effect. The Court rejected this submission and applied section 39 of the Law and Equity Act[3] to confirm its broad power to grant injunctions.

The Court underlined that the developments of Mareva injunctions illustrated the willingness of courts to use their equitable jurisdiction against non-parties, even when such orders against non-parties apply extra-territorially. Therefore, despite Google’s arguments invoking that an injunction has never been made against an Internet search provider, Google did not prove that the Court lacked subject matter jurisdiction.

On this issue, Google made four main arguments against granting injunctive relief:

First, as Google provides an essential tool for navigating hundreds of trillions of webpages on the Internet, Google argued that it cannot in any practical way monitor content or settle disputes over content, namely because of the vast volume of content, because content on websites is constantly changing and because Google cannot determine whether information in content is inaccurate or lawful. The Court rejected this argument since the injunction order would merely require Google to remove all of the Defendants’ websites from its searches, which is only a slight expansion of what Google voluntarily agreed to do when removing individual URLs.

Second, Google argued that it would be unjust to grant the injunction because an order to de-index entire websites with no regard to content would constitute undue censorship. The Court did not find this argument persuasive since Google. already de-indexed other kinds of sites that were subject to court orders. Moreover, Google employed staff that were dedicated to removing sites from Google’s search results, either because of the content and/or because of court orders.

Third, Google argued that the Court should not make an order that would affect searches worldwide because this could require Google to contravene laws in other jurisdictions. However, Google did not prove that an order requiring it to block the Defendants’ websites would contravene California law, or the law of any other state or country. Google admitted that most countries would indeed recognize intellectual property rights and consider the selling of pirated products as illegal.

Fourth, Google argued that the injunction order was too broad and submitted that if it were to be granted, it should be limited to Google.ca. However, the Court ruled that such a limited injunctive order would be ineffective since users can easily have access  to Defendants’ websites through other countries’ Google search pages.  Moreover, it is Google that provides the Internet search services and not Google.ca.

The Court balanced the interests of Google and the irreparable harm suffered by the Plaintiff and noted that Google was “an innocent bystander but it [was] unwittingly facilitating the defendants’ ongoing breaches of this Court’s orders.”[4] The Court also underlined that Google acknowledged that it could do what was asked of it and did not establish that it would be materially inconvenienced or that it would be costly for Google to do so.

The injunctive relief was therefore granted, as it was the most practical way for the Defendants’ illegal sales through the Internet to be stopped.

Significance

This case provides guidance regarding the circumstances under which a Canadian court will assert territorial jurisdiction over a business that carries out its business over the Internet.

Note that Google has indicated that it will appeal the decision to British Columbia’s Court of Appeal.