In an unprecedented Canadian legal decision, the BC Court of Appeal upheld an injunction requiring Google, who was not a party to the BC lawsuit, to remove from its worldwide search engine an expansive list of websites, including entire domains, operated by the defendant to the lawsuit.
This decision opens the door for litigants in BC to enjoin third parties who are subject to the jurisdiction of BC, such as Google, from displaying online content which infringes a plaintiff's intellectual property or other rights worldwide.
The defendants, former distributors of the plaintiffs' product, allegedly acquired confidential information and trade secrets of the plaintiff, promoted and distributed the plaintiffs' products as their own, and later sold their own competing products created from those trade secrets, using the plaintiffs' trade-marks. The plaintiffs obtained orders prohibiting this infringing conduct.
In defiance of the court orders, the defendants continued their activities, and ceased responding to communications in the litigation. When Google voluntarily removed some of the defendant's URLs from search results on google.ca (their Canadian website) the defendant simply moved the same content to new pages which they made available through other national versions of Google, such as google.com.
The BC Supreme Court granted an injunction against Google prohibiting Google from delivering search results pointing to the defendants' websites, concluding that it had territorial jurisdiction over the injunction application pursuant to BC's Court Jurisdiction and Proceedings Transfer Act, SBC 2003, c 28 ("CJPTA") because a real and substantial connection existed between the injunction application and BC. The court concluded the connection existed both because Google was carrying on business in BC (pursuant to s. 10(h)), and the proceeding was commenced to enforce a right over property in British Columbia (pursuant to s. 10(a)).
Key to this conclusion was the judge's finding that Google actively collected information from BC residents, targeted advertising to users in BC, and entered into advertising contracts with entities in BC.
The Court of Appeal upheld the injunction, but did so on a slightly different basis.
Where the Supreme Court had considered only whether there was a real and substantial connection between the injunction application and BC, the Court of Appeal concluded that it is necessary to take a two-step approach in such cases.
First it is necessary to determine whether a real and substantial connection exists between the entire action and BC, not simply any particular application, such as an injunction application. With little comment, the Court of Appeal accepted this requirement was met in this case.
If this first requirement is met, it is then necessary to consider whether the court has in personam jurisdiction (or jurisdiction over a specific person or entity) over the party the order seeks to bind, in this case Google. Based on the same facts considered by the trial judge in finding a real and substantial connection—that Google collected information from BC users, targeted BC users, and it contracted with BC businesses—the Court of Appeal concluded that it had in personam jurisdiction to make an order which bound Google.
Remedial jurisdiction of the Court – just because they can, doesn't mean they will
The Court of Appeal set up one further barrier to any party seeking such a broad order: "where an order with only domestic consequences will accomplish all that is necessary, a more expansive order should not be made."(para. 106).
In practice, this will likely mean that any party seeking an international response will need to show that a defendant's actions have avoided, or would avoid, the effect of merely national response. In Equustek, for example, the defendants had taken steps to promote the placement of its website on Google's search engines, and had moved the infringing content between webpages, a situation which the plaintiff described as a game of "whack-a-mole".
Going forward – non-parties and in personam jurisdiction
One potentially significant effect of the Court of Appeal's decision is the division between the authority to hear a particular case—which will depend upon the existence of territorial jurisdiction based on a real and substantial connection with that case—and the authority to grant an order against a person or entity that is not a party to the lawsuit—which will depend on the court's in personam jurisdiction over that party.
This distinction is even more noteworthy given that none of the conduct which the court relied upon to find in personam jurisdiction over Google was specific to this case. Instead, jurisdiction was founded on what appeared to be Google's standard practice. In effect, this means that Google will continue to be subject to third party orders in any case over which the BC Courts have jurisdiction.
Given that territorial competence issues are often resolved between plaintiffs and defendants—and prior to the involvement of third parties like Google—this may mean that similar injunctions will be granted more frequently. At the least, it will mean that the case-specific issues—the territorial jurisdiction of the court over a proceeding—may be resolved before any third party even becomes involved.
Other CJPTA provinces – application elsewhere in Canada
It will also be fascinating to see if the other provinces which have adopted legislation based upon the Uniform Law Conference of Canada's model law 1 (the foundation for the BC CJPTA) will come to a similar conclusion when faced with similar requests for injunctive relief.
While obviously not determinative, it stands to reason that the same interpretive principles should apply to legislation based upon the same model. If so, the Equustek injunction may find itself taking root across Canada.
1 Court Jurisdiction and Proceedings Transfer Act, SNS 2003 (2d Sess), c 2 (Nova Scotia); The Court Jurisdiction and Proceedings Transfer Act, SS 1997, c C-41.1 (Saskatchewan).
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