Dr Paul Lambert summarises an important judgment of the Canadian Supreme Court and comments on its global impact
The Equustek case is a significant intellectual property internet infringement case from the Canadian Supreme Court (Google Inc v Equustek Solutions Inc, Robert Angus and Clarma Enterprises Inc, 2017 SCC 34). The rights-owner (Equustek (“E”)) was pursuing the infringer (Datalink (“D”)).
The issue in the appeal was whether Google (a third party) could be ordered, pending a trial, to globally de-index infringing websites of D, which D was using to breach several court orders. This article is confined to that aspect. (The infringement aspects are interesting of themselves; the large number of third-party intervener briefs are also pertinent.)
Webpage de-indexing ineffective
E is based in Canada and manufactures networking devices. D was originally located in Canada but during the case disappeared, moving to some unknown jurisdiction. Google asked E to obtain a court order prohibiting D from carrying on business on the internet. Google told E it would comply with such an order by removing specific webpages. Google’s policy voluntarily de-indexes individual webpages, not entire websites. E agreed to try this approach. However, the de-indexing of webpages was ineffective as D moved objectionable content to new pages within its websites, thus circumventing the court orders.
Google also limited de-indexing to google.ca searches. Potential Canadian customers could find D’s websites even if they were blocked on google.ca. Also, the majority of infringing sales were to purchasers outside Canada, so Google’s de-indexing did not have “the necessary protective effect” in the words of the Supreme Court.
E therefore successfully sought an injunction to enjoin Google from displaying any part of the D websites on any of its search results worldwide.
When granting the worldwide injunction, Fenlon J noted that Google controls between 70-75% of the global internet searches and that D’s ability to sell its counterfeit product is, in large part, contingent on Google’s search engine. Only by preventing access to D’s websites, could E be protected.
Fenlon J concluded that irreparable harm was being facilitated through Google’s search engine; that E had no alternative but to require Google to de-index the websites; that Google would not be inconvenienced; and that, for the order to be effective, the D websites had to be prevented from being displayed on all of Google’s search results, not just google.ca. She said:
to be effective, even within Canada, Google must block search results on all of its websites … [D’s] sales originate primarily in other countries, so the Court’s process cannot be protected unless the injunction ensures that searchers from any jurisdiction do not find [D’s] websites.
The Court of Appeal dismissed Google’s appeal, agreeing the in personam jurisdiction over Google and to make an order with extraterritorial effect; that courts of inherent jurisdiction could grant equitable relief against non-parties; and ordering Google was the only practical way to prevent D flouting the court’s several orders, and since there were no identifiable countervailing comity or freedom of expression concerns that would prevent the order, it upheld the order.
The Supreme Court agreed that the test for the interlocutory injunction against Google was met. Granting an interlocutory injunction is discretionary and involves a high degree of deference. The Supreme Court saw no reason to interfere with the courts below.
Google did not dispute that there was a serious claim nor that E was suffering irreparable harm from the infringements, and acknowledged that it inadvertently facilitated the harm through its search engine which led purchasers to D’s websites.
The lower courts concluded that as Google carried on business in the province through its advertising and search operations, this was sufficient to establish the existence of in personam and territorial jurisdiction. Google did not challenge those findings. It challenged instead the global reach of the resulting order, suggesting the order be limited to Canada (or google.ca) alone. The Supreme Court said that this argument “contradicts the existing jurisprudence”:
“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”. Mareva injunctions are granted with worldwide effect.
Groberman J. (at the initial appeal) “note[d] 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.”
Fenlon J (at first instance) explained the worldwide order was necessary: “The majority of [infringing] sales occur outside Canada .... to be effective, even within Canada, Google must block search results on all of its websites.”
To ensure that Google did not facilitate D’s breach of court orders, the injunction had to have worldwide effect.
The Supreme Court agreed. “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.” The Supreme Court noted that the majority of D’s sales take place outside Canada. If the injunction was restricted to Canada or to google.ca, as Google suggested, “the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from D’s websites, and Canadian purchasers could easily find D’s websites even if those websites were de-indexed on google.ca.” Google would be facilitating D’s breach of court’s order. “There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm”.
The order was targeting D’s websites being displayed where they did the most harm, on Google’s global search results.
No significant disadvantage to Google
The injunction’s worldwide effect did not tip the balance of convenience in Google’s favour. The order “does not require … 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 was therefore, the Supreme Court said, “no harm to Google which can be placed on its ‘inconvenience’ scale arising from the global reach of the order.”
The Supreme Court did not see “how this interferes with what Google refers to as its content neutral character.” The injunction did not require Google to monitor content on the internet, nor was it a finding of liability against Google for facilitating access to the impugned websites. As for the balance of convenience, “the only obligation the interlocutory injunction creates is for Google to de-index the D websites.” The Supreme Court also repeated that the order, as Fenlon J observed, was “only a slight expansion on the removal of individual URLs, which Google agreed to do voluntarily”.
Google did not suggest that it would be inconvenienced materially or financially in de-indexing. It acknowledges, fairly, that it can, and often does, exactly what was being asked of it in this case, that was, 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 to de-index content that allegedly infringes copyright, and removes websites that are subject to court orders.
Google search was how D has been able to continue harming E in breach of several court orders. Google was the determinative player in allowing the harm to occur. Any countervailing harm to Google was minimal to non-existent.
Third-country issues and freedom of expression
Regarding issues in other jurisdictions, the Supreme Court said that “Google’s argument that a global injunction violates international comity because it is possible that the order 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 is, with respect, theoretical.” Previously, Fenlon J noted “Google acknowledges that most countries will likely recognise intellectual property rights and view the selling of pirated products as a legal wrong.”
The Supreme Court did not see freedom of expression issues being engaged in “any” way that tipped the balance of convenience towards Google in this case. Groberman J previously concluded in the initial appeal:
In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation .... 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.
The Supreme Court noted that if Google had evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it could apply to the courts to vary the interlocutory order accordingly. “Google … made no such application.”
In the absence of any evidence and given Google’s ability to seek an amended order, it was not equitable to deny E 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 value.” It was an order to de-index website listings that violated several court orders. “We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.”
Even if the injunction engaged freedom of expression issues, “this is far outweighed by the need to prevent the irreparable harm that would result from Google’s facilitating D’s breach of court orders.”
There were two minority judgments. While these are not examined in this short note, they appear to take a rigid procedural perspective, appear technologically dated in this author’s perspective, and lean against there being an effective remedy rather than in favour of Google per se.
This is a significant judgment for intellectual property owners as it provides avenues where there may be a particularly problems in terms of cooperation, identification and location.
E first had to engage a series of related orders on different occasions. Other potential rightsowners might consider similar orders as may, or may not, be appropriate.
While the case relates to intellectual property, the benefit of de-indexing per se and de-indexing on a worldwide basis is relevant to other areas beyond intellectual property, e.g. fake news, personal medical records, other personal data, revenge porn, data breach materials, hacked content. The discussion will continue, and internationally. Indeed, since the Supreme Court hearing, Google has announced that it will be de-listing personal medical data, and various entities appear to be dealing with fake news. Service providers and police authorities have also been looking more at revenge porn issues and similar online abuse issues.
However, the premise remains and is increasingly recognised that internet de-indexing is an important and sometimes necessary avenue. In addition, this case highlights the need in appropriate circumstances for a worldwide order for effect or maximum protective effect. One issue the case does not address is that of liability. Many will argue that this dovetails the predicted decision in Google Spain. Justifiably the headline infringement de-indexing issue will take the limelight, but there are also other issues to consider in the decision.
Dr Paul Lambert - consultant ([email protected]) and author The Data Protection Officer: Profession, Rules and Role (Routledge, Taylor & Francis).