June 19, 2014
Equustek Solutions Inc. et al v. Morgan Jack et al 2014 BCSC 1063
The B.C. Supreme Court has ordered Google to block certain websites from its search results worldwide.
In a trade secret and passing off lawsuit, the defendants were previously ordered not to sell their electronic devices through websites by the B.C. Court. The defendants, operating entirely as a virtual company, did not comply with such court orders and continued carrying on business through a complex and ever expanding network of websites. While not a party to the proceedings, Google voluntarily removed specific websites from its Google.ca, Canada-specific search results; however, Google was unwilling to block an entire category of URLs (sometimes referred to as “mother sites”), from its search results worldwide. As a result, the defendants’ Datalink websites continued to come up in searches on other Google sites accessible by Canadians.
This led the plaintiff to seek a third party interim injunction against Google, taking the position that Google’s search engine facilitates the defendants’ ongoing breach of one of the initial court orders by leading customers to the defendants’ virtual business websites.
Google responded that the B.C. Court does not have jurisdiction over it because it is not present in British Columbia, and because the application for an injunction does not relate to Google doing or refraining from doing anything in either British Columbia or Canada. Google argued that even if the Court did have jurisdiction, the order sought should not be made: (i) because it would amount to a worldwide order that could not be enforced; and (ii) because it would constitute an unwarranted intrusion into Google’s lawful business activities as a search engine.
The case raises two interesting questions: (i) Does the B.C. Court have territorial competence over a worldwide internet search provider?; and (ii) Should Google be ordered not to generate and show search results that provide hyperlinks to the Datalink websites which advertise and sell infringing products?
The B.C. Court decided it had the power to grant injunction against Google since it considered that Google had a real and substantial connection with B.C. and was within the Court’s territorial jurisdiction. While advertising in a jurisdiction alone is generally not sufficient to grant territorial competence, Google is not advertising its own business, but rather going beyond by engaging with customers and providing them with user-specific, non-Google brand advertising. Additionally, Google sells ad space to B.C. businesses and had previously sold ad space to the defendants, and as result, was carrying on business in B.C.
Foreign “passive” websites have traditionally been off-limits for Canadian courts. However, the B.C. judge held that Google was an active not passive participant given Google’s customized search results based, in part, on Google’s past experience with that searcher.
The B.C. judge decided that although Google was an innocent bystander, it was unwittingly facilitating the defendants’ ongoing breaches of the Court’s orders. Moreover, there was no other practical way for the Datalink websites’ sales to be stopped, and no other way to remove those websites from Google’s search results.
It remains to be seen whether this decision remains entirely fact-specific, or has far reaching implications in respect of future court orders in Canada. Google has indicated that it will appeal the decision.
The potential reach of this decision should be noted by brand owners seeking to give practical effect to existing court orders that are difficult to enforce online. Normally, a Canadian court will not assume jurisdiction over a foreign company unless it has a significant connection to Canada. With jurisdiction extending to Google, the B.C. Court has indicated that there is risk of legal liability in any jurisdiction, and certainly in Canada, to companies engaging in worldwide business activities through online reach. Further, while the B.C. Court finds Google an “innocent bystander” in this case, the decision nonetheless recognizes Google’s unwitting involvement in, and enabling of, the infringing activities of the defendants. It remains to be seen if this can lead to Canadian law giving effect to secondary liability for trademark infringement in the context of online usage, which has not been the case to date. It also remains to be seen how and if this will impact Google’s current AdWord Policy in Canada, which only provides a take-down mechanism for third-party advertisements which display the complainant’s trademarks in the text of the ad, rather than use of the complainant’s trademarks as key terms to generate ads when conducting searches on Google.
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