Canada: Now You See It, Now You Dont: SCC Upholds Worldwide Injunction That Alters Google Search Results

Last Updated: July 26 2017
Article by Andrew D. Little and L.E. Trent Horne

The Supreme Court of Canada has upheld a novel injunction order against Google, requiring it to remove certain websites from worldwide search results. For litigants in Canadian courts, Google v. Equustek1 enlarges both the available pre-trial remedies, and the choice of who may be sued, to protect intellectual property rights—and perhaps other interests as well.

The decision expands current law by recognizing that an intellectual property (IP) rights holder may obtain an injunction against an innocent third party, if that party is unwittingly "facilitating" a defendant's breach of a court order designed to prevent irreparable harm to IP rights.

The question now is, what are the limits for future injunctions? The Supreme Court provides hints, but not extensive guidance. There is considerable scope for development in coming cases, in part based on what is not expressly mentioned in the Supreme Court majority's reasons.

The decision warrants attention from both IP rights holders and potential "facilitators" such as social media platforms, some commercial website operators and internet service providers.

Injunction Granted

Equustek is a technology company in British Columbia. It manufactures networking devices that allow electronic communications between complex industrial equipment. Equustek filed a lawsuit against a former distributor, Datalink, alleging that it re-labeled Equustek's products as its own, and also misused confidential information and trade secrets belonging to Equustek.

Initially, Datalink participated in the litigation and filed a defence disputing Equustek's claims. This participation was short-lived. Datalink left the jurisdiction, and disregarded court orders mandating that it return materials to Equustek and stop referring to Equustek on its websites. Through its websites, Datalink continued to sell and offer for sale products that Equustek claimed infringed its intellectual property rights.

Confronted with a recalcitrant defendant and ongoing infringement, Equustek turned to Google for help. Since Google controls between 70 to 75 percent of the global searches on the Internet, Equustek reasoned that de-listing Datalink's websites and web pages from search results would prevent potential customers from locating and purchasing Datalink's products.

After Equustek obtained an order requiring Datalink to cease doing business through any website, Google voluntarily provided some assistance. It de-indexed 345 specific web pages associated with Datalink for searches conducted on google.ca. It did not, however, de-index all of the Datalink websites or alter search results for searches conducted on google.com. The de-indexing proved to be ineffective; Datalink just started up new web pages.

While it was never alleged that Google had done anything wrong, Equustek then asked the court to grant a novel form of injunction against Google that would block the display of search results that would otherwise lead customers to any part of Datalink's websites. Worldwide. Only that, Equustek argued, would protect its business from the irreparable harm being caused by Datalink's ongoing breaches of intellectual property rights and would ensure that the court's previous orders against the defendant were effective.

The B.C. courts agreed with Equustek. The motions judge, Fenlon J., granted an order requiring Google to remove Datalink's websites from search results displayed anywhere in the world. The order was upheld by the British Columbia Court of Appeal.

The injunction order against Google was without precedent. No other Canadian court has issued an injunction requiring a foreign non-party to modify search results for Internet users both inside and outside of Canada.

Injunction Upheld

By a majority, the Supreme Court upheld the injunction. It was unanimous in its determination that this form of injunction with extraterritorial effect could be granted. Google carried on business in British Columbia through advertising and search operations; this was sufficient to establish the court's jurisdiction over it. The Court was divided (7-2) on whether such an order should have been granted in this case.

  1. The Legal Requirements to Grant a "Google Order"

In compelling cases, civil courts have created limited and specific pre-hearing remedies to assist private litigants to preserve and protect their legal rights, particularly against those who show disregard for the rule of law. These remedies include Norwich orders requiring non-parties to produce information and Mareva orders freezing assets. (These orders are discussed in more detail in our February 2016 article, seen here.)

While the pre-trial remedy in this case was exceptional, the majority of the Supreme Court did not establish a unique test or specific requirements for what is expected to become known as a "Google order". The majority's reasons, written by Justice Abella, considered the traditional test for an injunction from the RJR—MacDonald case: a serious issue to be tried; irreparable harm suffered by the plaintiff; and, whether the balance of convenience favours granting the injunction.2 In future cases, a party moving for a Google order will not be expressly required to establish that there are no reasonable alternative means of relief or that the order will be fully effective in preventing the ongoing breach of court orders or infringement intellectual property rights.

The two-member minority preferred a more difficult legal test to obtain such an injunction. Justices Côté and Rowe urged restraint and caution in the use of the court's injunction powers and would not have granted the injunction in the circumstances, particularly since the order had not been shown to be effective and alternative remedies were available. Indeed, judicial restraint is a major theme throughout the minority's reasons.

  1. When is a Non-Party Exposed?

The Supreme Court provided some guidance on the critical questions of what kind of conduct a non-party would have to engage in for a Google order to be granted, and how much a non-party will have to be involved in the unlawful activity of the defendant. But the majority did not establish express limits that will bind the lower courts.

Like Justice Fenlon in British Columbia, the Supreme Court majority concluded Google was an unwitting and inadvertent "facilitator" of the harm to Equustek caused by the defendant's ongoing breach of the court's orders. Justice Abella observed that the pre-trial injunction flowed from the "necessity of Google's assistance in order to prevent the facilitation of [the defendant's] ability to defy court orders and do irreparable harm to Equustek".

What conduct makes a non-party to litigation a "facilitator" of misconduct was not discussed in the majority reasons; however, the plain meaning of the word suggests that it could include a wide range of activities. The minority judges viewed "facilitation" as too broad. It could, for example, include companies supplying Datalink with the material to produce the derivative products, the companies delivering the products, or as Google argued in its written argument, it might also include the local power company that delivers power to Datalink's physical address.

  1. A Pre-Trial or Final Remedy?

The initial Google order was granted in 2014. By the time the case reached the Supreme Court in 2017, Equustek had still not moved for default judgment or otherwise taken steps to obtain a final order as against Datalink. The minority noted that what was intended to be an interim or pre-trial order had effectively become a final order, and one that gave Equustek little incentive to move the case to a conclusion.

The majority did not view the potential duration of such an order as a bar to granting it, noting that where an interlocutory injunction has been in place for an inordinate amount of time, it is always open to a party like Google to apply to have it varied or vacated. The practical consequence is that a non-party who has been compelled to take steps to give effect to a court order may decide to take additional action to bring the proceeding to a final conclusion, in order to terminate its own obligations under the Google order.

What's Next?

It is expected that rights holders will be quick to avail themselves of this remedy. Effectively deputizing non-party search engines or websites to enforce interlocutory court orders may be more effective than pursuing a final judgment or contempt proceedings against an elusive infringer. For a plaintiff, the costs of a Google order will likely be modest compared to the expense of pursuing litigation in multiple jurisdictions.

Other kinds of legal rights or interests could be protected with a Google order, beyond intellectual property rights. The majority's reasons also noticeably expand the range of targets for the remedy to those who may only "facilitate" harm or a breach of an existing court order, but provide no guidance as to what the limits of facilitation should be.

Plaintiff's counsel may therefore ask a court to protect consumers from online fraud or misrepresentation, or to protect an individual's reputation sullied by libel or other harmful attacks. The targets of such motions could include social media platforms (e.g., Twitter and Facebook), websites with classified ads (e.g., Kijiji and Craigslist) or internet service providers. In each of these instances, the target may not have aided or abetted the misconduct in the sense of having active involvement, but may be seen as being a determinative player in allowing the harm to occur, making it the proper subject of a Google order.

It is also possible that regulatory or law enforcement agencies such as the Competition Bureau will look to use this ruling to support their mandate to protect markets and consumers from fraudulent activity emanating outside Canada.

Non-parties who wish to resist or limit requests for Google orders may find themselves in the unenviable position of picking up the cudgels of the absentee defendant and arguing that there is insufficient evidence of infringement to warrant an order. Even if the non-party takes no position on the defendant's conduct, targets of Google orders will be well served to introduce evidence as to the practical burdens that compliance would require and whether the requested order will be effective. Further, in cases such as Equustek where the plaintiff has not pursued a final judgment with alacrity, non-parties should stand ready to request time limits on the Google order, even if that means effectively taking steps to move the proceeding to a final resolution.

Footnotes

1 Google Inc. v Equustek Solutions Inc., 2017 SCC 34 (June 28, 2017).

2 RJR—MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311.

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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Authors
Andrew D. Little
L.E. Trent Horne
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