For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Sunday, 22 June 2014

Why whac-a-mole if you can whac-a-search engine? Interim injunctions and the right to be forgotten

The “right to be forgotten” is in the news again, this time in Canada where the British Columbia Supreme Court has been flexing its jurisdictional muscles. This report is brought to you by Scott MacKendrick (Partner, Bereskin & Parr LLP), who reveals that the court has been taking note of recent case law of the Court of Justice of the European Union. Explains Scott:

The Long Arm of Canadian Law

In a ground-breaking decision (Equustek Solutions Inc. v Jack et al, 2014 BCSC 1063) the British Columbia Supreme Court has issued an interim injunction against a third party, Google, ordering it to stop indexing or referencing certain websites in its search results, not just in Canada but everywhere. 
Equustek brought trade secret and passing off proceedings against the Jack defendants, alleging the theft of trade secrets relating to its network devices, and the advertising of Equustek’s products as if they were their own, thus engaging in “bait and switch” tactics. Although Equustek obtained initial court orders against the Jack defendants, Equustek saw itself engaged in a game of “Whac-a-mole” with the Jack defendants who, operating as a virtual company, ignored the court orders and carried on business through “a complex and ever expanding network of websites”. 

Google was not a party to the proceedings, but it voluntarily complied with Equustek’s initial court orders to remove specific webpages and URLs from its google.ca search results.  Google was unwilling, however, to block an entire category of URLs, sometimes referred to as “mother sites”, from its search results worldwide. 
Equustek then sought a third party interim injunction against Google, taking the position that Google’s search engine facilitated the Jack defendants’ ongoing breach of one of the initial court orders by leading customers to the defendants’ virtual business websites. 
British Columbia: a great place to go
if you want to be forgotten ...
Google responded that the British Columbia Supreme Court did not have jurisdiction over it because it was not present in British Columbia and because the application for an injunction did 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. 
Madam Justice Fenlon found that the court had territorial jurisdiction over Google, referring to the recent Court of Justice of the European Union “right to be forgotten” decision [Case C-131/12 Google Spain, noted on this weblog here and here]: 
I conclude that Google’s internet search websites are not passive information sites. As a user begins to type a few letters or a word of their query, Google anticipates the request and offers a menu of suggested potential search queries. Those offerings are based on that particular user’s previous searches as well as the phrases or keywords most commonly queried by all users.
Google submits that its advertising services are completely separate from its search services, and cannot justify the Court assuming jurisdiction over Google’s search services. With respect, I do not agree … 
First, Google’s business model is contextual advertising; the “context” is the search done using Google’s search services. Ads are linked to either the subject matter of the search, or the history of the person searching. Google does not charge users of its search services. Rather, it sells space on its websites to advertisers whose ads are displayed alongside the search results generated by a user’s query. 
These ads can relate to the topics searched. … 
These ads can also be unrelated to the content of the search, but geared to a particular searcher. … 
Google made the same argument that its ad and search services are unrelated in submissions to the European Court of Justice in Google Spain SL and Google Inc. v Agencia Española de Protección de Datos (AEPD) and Mario Costeja González ... 
The European Court of Justice concluded at para.56: 
… the activities of the operator of the search engine [Google] and those of its establishment situated in the Member State [Google Spain] concerned are inextricably linked since the activities relating to the advertising space constitute the means of rendering the search engine at issue economically profitable and that engine is, at the same time, the means enabling those activities to be performed. 
… I too conclude that the two parts of Google’s business are inextricably linked; neither service can stand alone.” 
Justice Fenlon also found that the court had jurisdictional competence to make a blocking order notwithstanding its extraterritorial effect: 
“Second, whether the advertising activity conducted in British Columbia is the same as the activity which the plaintiff seeks to enjoin is not germane to the territorial competence analysis. The difference between the advertising business and the search business to be enjoined goes to the strength of the connection between the matter and British Columbia. It could thus be a factor when assessing whether British Columbia is the appropriate forum, but it does not affect this court’s territorial competence. Once the Court has in personam jurisdiction, it has it for all purposes.” 
The general Canadian rule is against granting third party injunctions.  Despite the lack of precedent for this injunction, Justice Fenlon found that she had subject-matter competence: 
“The fact that an injunction has not before been made against an internet search provider such as Google is reason to tread carefully, but does not establish that the Court does not have subject matter competence. Indeed, the notion that a court may only make the orders it has made in the past is anathema to the spirit of the common law.” 
Having found jurisdiction, jurisdictional competence and subject matter competence, Justice Fenlon found that the “Whac-a-mole” facts and court order breaches compelled her to the injunction sought, notwithstanding Google’s innocence in the matter: 

“Google is an innocent bystander but it is unwittingly facilitating the defendants’ ongoing breaches of this Court’s orders. There is no other practical way for the defendants’ website sales to be stopped. There is no other practical way to remove the defendants’ websites from Google’s search results.
 The Court must adapt to the reality of e-commerce with its potential for abuse by those who would take the property of others and sell it through the borderless electronic web of the internet. I conclude that an interim injunction should be granted compelling Google to block the defendants’ websites from Google’s search results worldwide. That order is necessary to preserve the Court’s process and to ensure that the defendants cannot continue to flout the Court’s orders.” 
Whether this decision remains entirely fact-specific and fact-unique, or whether it becomes a template for future court orders in Canada or elsewhere in other cases, remains to be seen.  Google has indicated that it intends to appeal.
This Kat will be watching closely for the outcome of any appeal, as well as for the result of the litigation over the substantive issues. Merpel marvels at the fact that a litigant such as Google can enjoy jurisdiction over most of planet Earth as a sort of de facto default, while courts have to make quite an effort to cast a judicial shadow that exceeds the terrestrial borders of their respective jurisdictions.

1 comment:

James Wagner said...

In the main action the Defendants have defaulted and as such the allegations made against them (theft of trade secrets, incorporation of same into their competing products)were deemed to be true for the purposes of this injunction application.

This injunction isn't entirely novel. There have been injunctions against non parties, including some with an extraterritorial reach, from Canadian Courts before through Mareva injunctions (themselves based on earlier UK precedent). For example, 'do not conduct X type transactions with person Y'.

The impact of this injunction is interesting in that its consequences will impact a much larger group (anyone in the world searching for the Defendants products using google) and most of those impacted by the injunction may not ever be made aware of its existence), whereas many previous extraterritorial injunctions required knowledge of the injunction before having an impact.


There is some justification for this new injunction in this case (the Defendants clearly were subject to BC's jurisdiction and the actions Google had taken prior to the injunction were insufficient to allow the Court to enforce its jurisdiction on the Defendants), the net consequences are to enforce BC's trade secret law (and Canadian IP law generally) onto the Defendants in any jurisdiction around the world they might wish to operate in.

There are definitely some freedom of expression and net neutrality issues raised by this decision.

As a barrister and solicitor in BC, I think the reasoning demonstrates an understanding of these issues, an attempt to balance them, and that BC's laws are generally respectful of territorial sovereignty. I am also glad to have another mechanism to provide protection to clients who are having their intellectual property rights infringed.

I am however concerned that this decision could be used as a precedent for undeserved injunctions in the future, and the consequences should other jurisdictions implement similar injunctions without providing the protections offered in BC.



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