Canada: Worldwide De-Indexing Order Against Google Upheld By Supreme Court Of Canada

The Supreme Court of Canada released a landmark decision today ruling that Canadian common law courts have the jurisdiction to make global de-indexing orders against search engines like Google. In so, ordering, the Court in Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 underlined the breadth of courts' jurisdiction to make orders against search engines to stem illegal activities on the Internet including the sale of products manufactured using trade secrets misappropriated from innovative companies.

The decision arose from a lower court decision that ordered Google to block websites that were selling goods that violated the trade secrets of the plaintiffs. The plaintiffs obtained a default order against the defendants. But, the defendants continued to sell the offending goods over the Internet. The plaintiffs, unable to enforce their order, asked for Google's help in blocking the websites. Google voluntarily de-indexed specific URL's requested by the plaintiffs, but this "whac-a-mole" process was ineffective. When Google refused to de-index the offending websites from its search results, the plaintiffs brought a motion against Google for interim relief requiring Google to de-index the websites from all of its search engines worldwide.

Over Google's objections, in Equustek Solutions Inc. v. Jack 2014 BCSC 1063 Madam Justice Fenlon of the British Columbia Supreme Court granted the injunction. Google subsequently applied for leave to appeal the decision to the British Columbia Court of Appeal and for an order staying the enforcement of the order. In Equustek Solutions Inc. v. Google Inc., 2014 BCCA 295, the court granted Google leave to appeal the decision but refused Google's application to stay enforcement of the injunction order. Google's appeal was later dismissed by the Court of Appeal in Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265. For a summary of the prior proceedings, see Barry Sookman, Google ordered by BC court to block websites: Equustek Solutions Inc. v. Jack.

The Supreme Court of Canada, in a seven to two majority decision written by Justice Abella, affirmed the decisions below.

Google had argued that courts had no jurisdiction to make orders against it as a non-party to the litigation. It argued that any order against it should have been limited to the google.ca search engine. It also contended that the worldwide order would violate the principle of comity and rights of freedom of expression. The Court rejected each of these arguments and found that the balance of convenience favoured granting the order.

Jurisdiction to make orders against non-party search engines

The Court rejected Google's contention that no order could be made against it since the injunction in the case was not specifically directed to it. The Court rejected this argument on three grounds. First, that "injunctions may be issued 'in all cases in which it appears to the court to be just or convenient that the order should be made . . . on terms and conditions the court thinks just'". Second, if a non-party violates a court order, it can be enjoined if its conduct would obstruct the course of justice".

The third basis for granting such an order is the long-standing equitable protective jurisdiction which enables courts to make orders against entities that facilitate, even unwittingly, the commission of a wrong. This basis of jurisdiction had been recently applied by the English Court of Appeal in Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2016] EWCA Civ 658 (06 July 2016) in affirming the jurisdiction of English courts to make blocking orders against Internet Service Providers requiring them to disable access to foreign websites that offered counterfeit goods for sale.

Norwich orders are analogous and can also be used to compel non-parties to disclose information or documents in their possession required by a claimant (Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133 (H.L.), at p. 175). Norwich orders have increasingly been used in the online context by plaintiffs who allege that they are being anonymously defamed or defrauded and seek orders against Internet service providers to disclose the identity of the perpetrator (York University v. Bell Canada Enterprises (2009), 311 D.L.R. (4th) 755 (Ont. S.C.J.)). Norwich disclosure may be ordered against non-parties who are not themselves guilty of wrongdoing, but who are so involved in the wrongful acts of others that they facilitate the harm. In Norwich, this was characterized as a duty to assist the person wronged (p. 175; Cartier International AG v. British Sky Broadcasting Ltd., [2017], 1 All E.R. 700 (C.A.), at para. 53). Norwich supplies a principled rationale for granting injunctions against non-parties who facilitate wrongdoing (see Cartier, at paras. 51-55; and Warner-Lambert Co. v. Actavis Group PTC EHF, 144 B.M.L.R. 194 (Ch.)).

This approach was applied in Cartier, where the Court of Appeal of England and Wales held that injunctive relief could be awarded against five non-party Internet service providers who had not engaged in, and were not accused of any wrongful act. The Internet service providers were ordered to block the ability of their customers to access certain websites in order to avoid facilitating infringements of the plaintiff's trademarks. (See also Jaani Riordan, The Liability of Internet Intermediaries (2016), at pp. 412 and 498-99.)...

The Court found that Google facilitated access to the websites that made the illegally manufactured good available. As such there was a principled basis to make the order against it.

To preserve Equustek's rights pending the outcome of the litigation, Tindale J.'s order of December 13, 2012 required Datalink to cease carrying on business through the Internet. Google had requested and participated in Equustek's obtaining this order, and offered to comply with it voluntarily. It is common ground that Datalink was unable to carry on business in a commercially viable way unless its websites were in Google's search results. In the absence of de-indexing these websites, as Fenlon J. specifically found, Google was facilitating Datalink's breach of Tindale J.'s order by enabling it to continue carrying on business through the Internet. By the time Fenlon J. granted the injunction against Google, Google was aware that in not de-indexing Datalink's websites, it was facilitating Datalink's ongoing breach of Tindale J.'s order, the purpose of which was to prevent irreparable harm to Equustek.

Much like a Norwich order or a Mareva injunction against a non-party, the interlocutory injunction in this case flows from the necessity of Google's assistance in order to prevent the facilitation of Datalink's ability to defy court orders and do irreparable harm to Equustek. Without the injunctive relief, it was clear that Google would continue to facilitate that ongoing harm.

Courts can make orders with extra-territorial effects

Google's next argument was that it was improper to make an interlocutory injunction with extraterritorial effects. The Court found that this argument "contradicts the existing jurisprudence". The Court confirmed longstanding precedent that when "a court has in personam jurisdiction, and where it is necessary to ensure the injunction's effectiveness, it can grant an injunction enjoining that person's conduct anywhere in the world". In reaching this conclusion, the Court referred to with approval foreign jurisprudence cited by the Court of Appeal where foreign courts had made de-indexing orders against search engines.

Groberman J.A. pointed to the international support for this approach:

I note that the courts of many other jurisdictions have found it necessary, in the context of orders against Internet abuses, to pronounce orders that have international effects. Several such cases are cited in the arguments of [International Federation of Film Producers Associations and International Federation of the Phonographic Industry], including APC v. Auchan Telecom, 11/60013, Judgment (28 November 2013) (Tribunal de Grande Instance de Paris); McKeogh v. Doe (Irish High Court, case no. 20121254P); Mosley v. Google, 11/07970, Judgment (6 November 2013) (Tribunal de Grande Instance de Paris); Max Mosley v. Google (see "Case Law, Hamburg District Court: Max Mosley v. Google Inc. online: Inform's Blog https://inforrm.wordpress.com/ 2014/02/05/case-law-hamburg-district-court-max-mosley-v-google-inc-google-go-down-again-this-time-in-hamburg-dominic-crossley/) and ECJ Google Spain SL, Google Inc. v. Agencia Española de Protección de Datos, Mario Costeja González, C-131/12 [2014], CURIA.

The Court explained why a world-wide de-indexing order against Google was justified on the facts of the case.

Fenlon J. explained why Equustek's request that the order have worldwide effect was necessary as follows:

The majority of GW1000 sales occur outside Canada. Thus, quite apart from the practical problem of endless website iterations, the option Google proposes is not equivalent to the order now sought which would compel Google to remove the [Datalink] websites from all search results generated by any of Google's websites worldwide. I therefore conclude that [Equustek does] not have an out-of-court remedy available to [it].

. . . to be effective, even within Canada, Google must block search results on all of its websites.

As a result, to ensure that Google did not facilitate Datalink's breach of court orders whose purposes were to prevent irreparable harm to Equustek, she concluded that the injunction had to have worldwide effect.

I agree. The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink's sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink's websites, and Canadian purchasers could easily find Datalink's websites even if those websites were de-indexed on google.ca. Google would still be facilitating Datalink's breach of the court's order which had prohibited it from carrying on business on the Internet. There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm.

The interlocutory 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. The order targets Datalink's websites — the list of which has been updated as Datalink has sought to thwart the injunction — and prevents them from being displayed where they do the most harm: on Google's global search results.

Nor does the injunction's worldwide effect tip the balance of convenience in Google's favour. The order does not require that Google take any steps around the world, it requires it to take steps only where its search engine is controlled. This is something Google has acknowledged it can do — and does — with relative ease. There is therefore no harm to Google which can be placed on its "inconvenience" scale arising from the global reach of the order.

Global de-indexing orders do not offend the principle of comity or rights of freedom of expression

Google argued that a global injunction violated the principle of international comity because it was an order that could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction. The Court found these arguments to be "theoretical" stating "As Fenlon J. noted, 'Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong'."

Google also contended that making such an order would violate freedom of speech rights on the Internet. The Court found that selling infringing products on the Internet did not offend any core values of freedom of expression.

And while it is always important to pay respectful attention to freedom of expression concerns, particularly when dealing with the core values of another country, I do not see freedom of expression issues being engaged in any way that tips the balance of convenience towards Google in this case. As Groberman J.A. concluded:

In the case before us, there is no realistic assertion that the judge's order will offend the sensibilities of any other nation. It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation. The order made against Google is a very limited ancillary order designed to ensure that the plaintiffs' core rights are respected.

. . . the order in this case is an interlocutory one, and one that can be varied by the court. In the unlikely event that any jurisdiction finds the order offensive to its core values, an application could be made to the court to modify the order so as to avoid the problem...

In the absence of an evidentiary foundation, and given Google's right to seek a rectifying order, it hardly seems equitable to deny Equustek the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible. We are dealing with the Internet after all, and the balance of convenience test has to take full account of its inevitable extraterritorial reach when injunctive relief is being sought against an entity like Google.

This is not an order to remove speech that, on its face, engages freedom of expression values, it is an order to de-index websites that are in violation of several court orders. We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.

The Court went further, expressing the opinion that "Even if it could be said that the injunction engages freedom of expression issues, this is far outweighed by the need to prevent the irreparable harm that would result from Google's facilitating Datalink's breach of court orders."

The balance of convenience favoured granting the order against Google

The Court, in considering the issue of balance of convenience, noted that Google already de-indexes websites to address child pornography and copyright infringements. The Court found that the balance of convenience favoured making the order against Google.

Google did not suggest that it would be inconvenienced in any material way, or would incur any significant expense, in de-indexing the Datalink websites. It acknowledges, fairly, that it can, and often does, exactly what is being asked of it in this case, that is, alter search results. It does so to avoid generating links to child pornography and websites containing "hate speech". It also complies with notices it receives under the US Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2680 (1998) to de-index content from its search results that allegedly infringes copyright, and removes websites that are subject to court orders...

This does not make Google liable for this harm. It does, however, make Google the determinative player in allowing the harm to occur. On balance, therefore, since the interlocutory injunction is the only effective way to mitigate the harm to Equustek pending the resolution of the underlying litigation, the only way, in fact, to preserve Equustek itself pending the resolution of the underlying litigation, and since any countervailing harm to Google is minimal to non-existent, the interlocutory injunction should be upheld.

Reflections on the decision

The Equustek case raised fundamental issues about the rule of law on the Internet. As commerce has migrated to the Internet, inevitably so too has illegal activity. For all its beneficial uses, the Internet is frequently used to make available all manner of illegal materials. The offenders operate under cloaks of anonymity. They flout court orders, acting as if they are above the law. Voluntary takedown requests are ignored or deteriorate into a futile game of whack-a-mole. Claimants have few if any direct means of enforcing court orders against these offenders.

The power to make orders against search engines is essential to preserving the effectiveness of law online, including to address the gamut of illegal online activities such as cyber-hacking and privacy breaches, cyber-fraud, terrorism, defamation, divulging state secrets, counterfeiting, copyright and other intellectual property infringements, and dissemination of malware. Obtaining a remedy against a search engine is often the only practical solution to enforcing rights.

Further, as illegal online conduct can take place in multiple territories simultaneously, and as courts with personal jurisdiction over a defendant have the power to adjudicate claims under foreign laws, it is vital that remedies with extraterritorial effects be available so that legal proceedings involving such wrongs do not need to be brought in every country in which illegality occurs and search engines operate.

Injunction orders against search engines are a natural evolution of courts' inherent powers, are common worldwide, and can balance the interests of claimants, search engines and the public.

The ruling by the Supreme Court is consonant with developments among Canada's trading partners that recognize the increasing necessity of making orders against online service providers and other entities that facilitate wrongdoing. In the European Union, orders against intermediaries that facilitate the dissemination of infringing content is well established. See prior blog posts of mine on this subject, Barry Sookman, Blocking orders against ISPs to combat trade-mark infringement legal says Court of Appeal in Cartier, Blocking orders against ISPs legal in the EU: UPC Telekabel Wien, Keeping The Pirate Bays at Bay: using blocking orders to curtail infringements.

In the United States, orders against online intermediaries are also common. See, for example, Hermes v. Doe, (SDNY April 30, 2012); Chanel Inc. v. Does (D. Nev., Nov. 14, 2011); ABS-CBN Corporation v Ashby, Case (Dist. Or. Aug. 8, 2014); Richemont International SA v Chen, Case (SDNY Jan. 4, 2013), ABS-CBN Corporation v Cinesilip.net 2017 WL 1628900 (S.D.Fla. May 1, 2017); Hassell v. Bird, 247 Cal. App. 4th 1336 (2016) (Injunction against Yelp to remove defamatory reviews to comply with judgment); Arista Records LLC v. Tkach, 122 F.Supp.3d 32 (SDNY) 2015) (Cloudfare bound by TRO by acting in concert under Rule 65 providing domain name registration service).

This article was first published on barrysookman.com.

____________________

* In the interest of full disclosure, my firm acted for several interveners before the Supreme Court of Canada including The International Federation of the Phonographic Industry, Music Canada, the Canadian Publishers' Council, the Association of Canadian Publishers, the International Confederation of Societies of Authors and Composers, the International Confederation of Music Publishers and the Worldwide Independent Network. The principal lawyers involved at McCarthy Tetrault were Barry Sookman, Dan Glover, and Miranda Lam.

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