The Supreme Court of Canada has ordered Google to continue removing an alleged counterfeiter’s websites from its search results regardless of where in the world those results appear or what local version of the search engine is being used.

This landmark decision marks the end of a case (in Canada) that has rumbled on since 2012. Google has, however, commenced proceedings in the United States for an order that would, in effect, prohibit it from complying with the Canadian decision. Brand owners, copyright owners and online service providers should all be aware of what the outcome of this dispute does, and does not, mean for their businesses.

Background

Equustek, a Canadian technology company, commenced proceedings against one of its distributors, Datalink, in 2012, alleging that Datalink was selling counterfeit versions of its products online. Despite orders pending trial that Datalink should not sell the allegedly infringing items and that it should not carry on business online, Equustek found it difficult to get offending websites removed from Google’s search results. Google removed search results for over 300 web pages associated with Datalink, but only from google.ca, the Canadian version of its search engine. Canadian consumers could continue to find Datalink’s allegedly infringing goods and import them into Canada, simply by using google.com instead of google.ca.

Equustek eventually sought a global injunction against Google. It argued that although Google was an unwilling participant in Datalink’s ongoing breaches of existing orders, its services were nonetheless determinative in facilitating those breaches and, accordingly, the only way to give effect to the original orders against Datalink was to delist their pages from all versions of the Google website. The courts granted the global injunction sought by Equustek and Google appealed to the Supreme Court of Canada.

The decision

By a 7-2 majority, the Court upheld the global injunction. In its ruling, it said:

  • “This is not an order to remove speech that, on its face, engages freedom of expression values… we have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.”
  • “The injunction in this case is necessary to prevent the irreparable harm that flows from Datalink carrying on business on the internet, a business which would be commercially impossible without Google’s facilitation.”

In short, Canada’s courts concluded that the global nature of e-commerce meant that Equustek’s counterfeit problem required a global solution.

Implications of the decision

This decision throws another bone into the global dogfight about who can be ordered to take down websites that sell (or, pending trial, are alleged to sell) counterfeit products or otherwise infringe IP rights. It is not, however, as simple a fix to online infringement as some reports may at first have suggested. First, the order prohibiting Datalink from ‘operating or carrying on business through any website’ was very broad: a narrower order may not be facilitated by mere intermediary services quite so easily. Secondly, the Supreme Court’s decision was based on the need to provide for adequate protection against infringements taking place within Canada: the decision may have been different if Datalink had geo-blocked Canada, thereby ceasing any arguably infringing activity within Canada and possibly pre-empting the Supreme Court’s worldwide blocking injunction. Finally, although the Supreme Court of Canada was at pains to point out that the injunction did not impinge on known boundaries of freedom of expression, and although it identified trends in jurisprudence from other jurisdictions to support its decision to uphold the worldwide blocking order, Google has now sought a declaration from a federal court in California that it cannot comply with the Canadian order without violating the First Amendment of the US Constitution. In other words, even a worldwide injunction can be blocked in relevant territories. We will watch this latest development with interest.

The role and responsibilities of intermediaries in IP owners’ fights against online counterfeiting and infringing activity remain uncertain and continue to be shaped by practice as well as by legal decisions such as that handed down by the Supreme Court of Canada.