The Supreme Court of Canada has granted leave to hear an
important case respecting the ability of Canadian courts to enjoin
the behaviour of organizations with respect to their operations
outside of Canada.
On February 18, 2016, the Supreme Court of Canada granted Google Inc. leave to
appeal the judgment of the British Columbia Court of Appeal in Equustek Solutions Inc. v. Google
Inc., in which the BCCA upheld an interlocutory
injunction prohibiting Google from including specific websites in
its search results worldwide.
The plaintiff's request for the injunction against Google
arose from a lawsuit in which the plaintiff alleged that the
defendant was passing off its goods as those of the plaintiff.
After the plaintiff commenced the proceeding, the defendant left
BC while still selling the knock-off goods over the internet,
relying on search results to reach customers. The plaintiff
alleged that it lacked an effective way of stopping the
defendant's conduct, and sought an interlocutory injunction
prohibiting Google from displaying the defendants' websites in
its search results anywhere in the world. The Supreme Court
of British Columbia deemed the injunction necessary to ensure that
the orders against the defendants were effective, and granted the
Google appealed, arguing that the injunction represented an
impermissible exercise of extra-territorial jurisdiction;
improperly ensnared an innocent third-party (Google); and exceeded
the Court's jurisdiction. Google also argued that the
injunction violated Google and the public's right to freedom of
The BCCA rejected every one of Google's arguments:
The Court found that it had jurisdiction over Google, both
because the underlying action was connected to BC and because
Google conducted business in BC (in response to Google's
concern that this meant that Google conducted business everywhere,
the Court responded that if so, it was because of Google's
business model and was therefore Google's problem);
The Court found that it had the right to act globally, both
based on historical precedent, and because doing so would not
offend international comity;
The Court found that the fact that Google was a third-party
didn't allow it to avoid the Court's reach, based on
precedent related to Norwich orders (whereby
third‑parties are ordered to provide assistance to the
The Court dismissed Google's arguments related to free
speech, asserting that speech designed to allow the infringement of
intellectual property would rarely be protected.
In seeking leave to appeal, Google generally argued that the
BCCA did not focus sufficiently on the public interest,
particularly in respect of freedom of speech. Beyond that,
Google highlighted three issues raised by the BCCA decision.
When should a court be able to block search results, given the
importance of freedom of expression, and what limits should be
Do Canadian courts have the authority to block
extra-jurisdictional search results?
When is a litigant entitled to an interlocutory injunction
against an innocent third-party? Should the current approach
to granting injunctions against parties to litigation be properly
applicable to non-parties to the litigation?
It is not clear why the SCC granted leave; however, it is
interesting to note that the BCCA decision came out before the
SCC's decision in Chevron Corp. v.
Yaiguaje, in which the SCC considered the scope
of Canadian courts' jurisdiction (albeit in the context of an
action to enforce a judgment). It is possible that the SCC
will take the Google appeal as an opportunity to further clarify
Chevron; it is also possible that the SCC simply sees a
need to craft jurisdictional guidance for the internet age.
Whatever the result, both intellectual property owners and
internet-based organizations will be watching closely.
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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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