The arm of the law is indeed long. In its June 11, 2015
decision, the British Columbia Court of Appeal ("BCCA")
upheld an injunction against Google, Inc. issued by the British
Columbia Supreme Court ("BCSC"), requiring Google to
de-index certain webpages from its search results worldwide. The
decision in Equustek Solutions Inc. v. Google, Inc. 2015
BCCA 265, stemmed from a December 2012 order prohibiting former
distributors of Equustek's industrial network interface
hardware—Morgan Jack and Datalink Technologies Gateway
Inc.—from selling counterfeits of Equusteks' products
through various websites, in violation of Equustek's trade
secrets and other intellectual property. Following that order,
Google voluntarily complied with Equustek's request to remove
specific webpages or uniform resource locations ("URLs")
from its Google.ca search results, but refused to block an entire
category of URLs, sometimes referred to as "mother
sites", from its search results worldwide. Equustek therefore
sought an injunction to force Google to de-index the offending
webpages from Google's worldwide results. The lower court
granted the injunction (see 2014 BCSC 1063, and our discussion of
the decision, here), and Google appealed to the BCCA. A
number of third party groups intervened, including the Canadian
Civil Liberties Association and Electronic Frontier foundation.
The paramount issues on appeal were (1) whether the injunction
and the U.S. company, Google, Inc., had a "real and
substantial" connection to British Columbia; (2) whether the
injunction could be issued against a non-party to the underlying
action; and (3) whether the extraterritorial reach of the
injunction complied with rules of comity. The interveners focused
on whether the scope of the injunction impacted issues of freedom
First, the Court found that since the facts underlying the
action against Google—i.e., the sale of counterfeit products
by Morgan Jack/Datalink Technologies Gateway Inc.—had a
"real and substantial" connection to British Columbia,
the Court had territorial competence in any matter stemming from
that underlying proceeding, such as the injunction against Google.
Further, the Court agreed with the lower court judge that BC courts
had in personam jurisdiction over Google, since the
interactivity of Google's services—namely that BC
companies advertised on the Google search engine and that Google
tracked and collected various data about users, including those in
BC—meant Google was "carrying on business" in
British Columbia, which gave the company a "real and
substantial" connection to that province.
Second, the Court held that, as a court of inherent
jurisdiction, a provincial supreme court's jurisdiction to
grant an injunction was effectively unlimited, and therefore could
be made against non-parties. The Court cited a decision of the
British Courts in Cartier International AG v British Sky
Broadcasting,  EWHC 3354 (Ch.) which similarly involved
relief against Internet service providers that could be used to
search for and access websites selling counterfeit products, as
well as other Canadian decisions where orders were issued against
non-parties to the underlying litigation.
Last, respecting the worldwide nature of its order, the Court
held that its jurisdiction over Google meant that the court could
make any order against it, regardless of whether such an order
would affect Google's activities outside the province:
"once it is accepted that a court has in personam
jurisdiction over a person, the fact that its order may affect
activities in other jurisdictions is not a bar to it making an
order". The Court concluded that the only bar to such an order
under principles of comity would be possible interference with the
"core values" of another country, such as freedom of
expression. In this case, there was no risk of such interference.
Further, the Court found such worldwide orders were routinely made
in other jurisdictions without being seen as unnecessarily
intrusive or contrary to the interests of comity.
Weighing the factors set out in RJR Macdonald for
granting an injunction, the Appeals Court agreed with the lower
court judge, and dismissed Google's appeal.
This decision is a caution to Internet service providers, search
engines, and other companies operating over the Internet, that
actions involving services in Canada could have worldwide
repercussions on operations. Specifically, website operators who
other programs to gather information about visitors to its website
could run the risk of being found to have a "real and
substantial" connection to Canada, sufficient for a court to
exercise personal jurisdiction over that company and make an order
effecting that company's operations around the world.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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