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BC Court of Appeals Affirms Worldwide Injunction against Search Engine

June 15, 2015

By Sharyn Costin and Tamara Céline Winegust

The arm of the law is indeed long. In its June 11, 2015 decision, the British Columbia Court of Appeal (“BCCA”) upheld an injunction against Google, Inc. issued by the British Columbia Supreme Court (“BCSC”), requiring Google to de-index certain webpages from its search results worldwide. The decision in Equustek Solutions Inc. v. Google, Inc. 2015 BCCA 265, stemmed from a December 2012 order prohibiting former distributors of Equustek’s industrial network interface hardware—Morgan Jack and Datalink Technologies Gateway Inc.—from selling counterfeits of Equusteks’ products through various websites, in violation of Equustek’s trade secrets and other intellectual property. Following that order, Google voluntarily complied with Equustek’s request to remove specific webpages or uniform resource locations (“URLs”) from its search results, but refused to block an entire category of URLs, sometimes referred to as “mother sites”, from its search results worldwide. Equustek therefore sought an injunction to force Google to de-index the offending webpages from Google’s worldwide results. The lower court granted the injunction (see 2014 BCSC 1063, and our discussion of the decision, here), and Google appealed to the BCCA. A number of third party groups intervened, including the Canadian Civil Liberties Association and Electronic Frontier foundation.

The paramount issues on appeal were (1) whether the injunction and the U.S. company, Google, Inc., had a “real and substantial” connection to British Columbia; (2) whether the injunction could be issued against a non-party to the underlying action; and (3) whether the extraterritorial reach of the injunction complied with rules of comity. The interveners focused on whether the scope of the injunction impacted issues of freedom of speech.

First, the Court found that since the facts underlying the action against Google—i.e., the sale of counterfeit products by Morgan Jack/Datalink Technologies Gateway Inc.—had a “real and substantial” connection to British Columbia, the Court had territorial competence in any matter stemming from that underlying proceeding, such as the injunction against Google. Further, the Court agreed with the lower court judge that BC courts had in personam jurisdiction over Google, since the interactivity of Google’s services—namely that BC companies advertised on the Google search engine and that Google tracked and collected various data about users, including those in BC—meant Google was “carrying on business” in British Columbia, which gave the company a “real and substantial” connection to that province.

Second, the Court held that, as a court of inherent jurisdiction, a provincial supreme court’s jurisdiction to grant an injunction was effectively unlimited, and therefore could be made against non-parties. The Court cited a decision of the British Courts in Cartier International AG v British Sky Broadcasting, [2014] EWHC 3354 (Ch.) which similarly involved relief against Internet service providers that could be used to search for and access websites selling counterfeit products, as well as other Canadian decisions where orders were issued against non-parties to the underlying litigation.

Last, respecting the worldwide nature of its order, the Court held that its jurisdiction over Google meant that the court could make any order against it, regardless of whether such an order would affect Google’s activities outside the province: “once it is accepted that a court has in personam jurisdiction over a person, the fact that its order may affect activities in other jurisdictions is not a bar to it making an order”. The Court concluded that the only bar to such an order under principles of comity would be possible interference with the “core values” of another country, such as freedom of expression. In this case, there was no risk of such interference. Further, the Court found such worldwide orders were routinely made in other jurisdictions without being seen as unnecessarily intrusive or contrary to the interests of comity.

Weighing the factors set out in RJR Macdonald for granting an injunction, the Appeals Court agreed with the lower court judge, and dismissed Google’s appeal.

This decision is a caution to Internet service providers, search engines, and other companies operating over the Internet, that actions involving services in Canada could have worldwide repercussions on operations. Specifically, website operators who sell advertising space to Canadian companies and use cookies or other programs to gather information about visitors to its website could run the risk of being found to have a “real and substantial” connection to Canada, sufficient for a court to exercise personal jurisdiction over that company and make an order affecting that company’s operations around the world.

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Tamara Céline Winegust Tamara Céline Winegust
B.F.A., J.D.
416.957.1651  email Tamara Céline Winegust