The Supreme Court of Canada has agreed to hear two fascinating
cases that deal with jurisdictional questions arising from the
activities of parties on the internet.
As Canadian individuals and businesses engage in more and more
conduct over the internet, often with parties that do not have
physical locations in Canada, there is increasing uncertainty over
the remedies available to Canadians who are harmed by the conduct
of parties with whom they engage online. The upcoming Supreme Court
of Canada decisions will help clarify the role that Canadian courts
intend to play in enforcing Canadian laws and protecting Canadians
from harmful online business practices.
Scenario I (Equustek Solutions Inc. v. Google
Inc.): A competitor has stolen
your intellectual property, is illegally manufacturing a competing
product, and relies on search engine results to target customers.
When Google voluntarily removes the competitor's 345 URLs from
search results from Google.ca (but not Google sites in other
countries), the competitor simply creates new web pages with
different URLs, in what becomes a game of 'whack-a-mole.'
Customers in non-Canadian jurisdictions are still able to see the
search results of your competitor. Google has no physical presence
in your province. Can a Canadian court in your province order
Google to block search results outside of Canada's borders and
finally give you an adequate solution to the problems caused by
your competitor's repeated breach of your intellectual property
Current Status: The British Columbia (B.C.)
Court of Appeal granted a worldwide injunction requiring Google to
block certain infringing websites from its search results. In spite
of the fact that Google has no physical presence in B.C., the B.C.
Court of Appeal held that it had jurisdiction over Google.
Scenario II (Douez v. Facebook,
Inc.): Facebook has allegedly
used your name and photo without your consent, and you believe your
rights under your province's privacy act have been violated.
between you and Facebook must be brought in a U.S. county. You want
to be party to a class action lawsuit in your home province. Can
the provincial privacy act override the forum selection cause in
class action? Is there "strong cause" for a Canadian
court to refuse to enforce the forum selection clause that mandates
actions be brought in the U.S.?
Current Status: Contrary to the lower
court's findings, the B.C. Court of Appeal found that
B.C.'s Privacy Act did not override the forum
not "strong cause" for the court to refuse to enforce the
forum selection clause. The B.C. Court of Appeal therefore denied
the class action certification attempt by the plaintiff, as any
action had to be brought in the U.S. county specified in
Contractual versus Non-Contractual Arrangements
In Scenario I, the Supreme Court of Canada will have to consider
the jurisdictional issues that arise from the online conduct of
parties that are not bound by contractual arrangements with each
In Scenario II, the Supreme Court of Canada will have to
consider the jurisdictional issues that arise from the online
conduct of parties for which the parties' relationship is
governed by contractual arrangements. It remains to be determined
whether the Supreme Court of Canada will elect to hear the two
Concerns of Lower Court Decisions
The lower court decisions have raised a number of concerns,
the role of Canadian courts in enforcing the laws of other
countries, and conversely, the potential for other countries to be
enforcing Canada's laws;
limitations on free speech on the internet based on a
Canadian-centric view of what speech is permissible; and
reconciling the conflicting laws of different jurisdictions
versus the global content of the internet.
Clarification Expected on the Following Issues
In Scenario I, the Supreme Court of Canada is expected to
provide clarity on (i) the circumstances under which a Canadian
court may order search engine results to be blocked and any limits
that must be imposed on these orders; (ii) whether Canadian courts
have the authority to block search results outside of Canada's
borders; and (iii) the circumstances in which a litigant is
entitled to an interlocutory injunction against a non-party that
hasn't actually done anything wrong.
In Scenario II, the Supreme Court of Canada is expected to
provide further clarity on the interplay between Canadian laws and
the forum selection clauses found in contracts governing internet
We will provide an update once the Supreme Court of Canada
issues its decisions in the above cases.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).