SCC Upholds Worldwide Google Injunction

Jul 7 2017 By Andy Chow

 

Google for blog

Last week the Supreme Court of Canada rendered its judgement in a closely watched case involving the Internet search engine giant Google (see Google Inc. v. Equustek Solutions Inc., 2017 SCC 34).

In the underlying action, Equustek alleged that the defendants Datalink and a Mr. Morgan Jack (former distributors of Equustek’s networking devices) designed and sold counterfeit products. The causes of action advanced were trademark infringement and the unlawful appropriation of trade secrets.  In earlier interlocutory proceedings, Equustek was able to secure injunctions against Datalink and Mr. Jack.  However, Datalink and Mr. Jack left the jurisdiction of the court orders (British Columbia) and continued their business from an unknown location.  Further factual and case background, a copy of some of the previous court orders obtained by Equustek, and even a copy of a warrant for the arrest of Mr. Jack can be found here.

In a 7-2 decision, the majority of the Supreme Court of Canada upheld an interlocutory injunction against Google (a non-party to the underlying litigation) prohibiting it from indexing various websites of Datalink not just in Canada and on Google’s www.google.ca search engine, but worldwide. Equustek (a small company based in Burnaby, B.C.) that had otherwise been unsuccessful in stopping Datalink’s allegedly illegal and infringing sales finally has an injunction, obtained through a David and Goliath battle against Google, that will likely be effective in limiting the irreparable harm it had suffered as a result of Datalink’s continuing sales.

Justice Abella, writing for the majority, noted that Equustek is facing a problem that “is occurring online and globally” and that “[t]he Internet has no borders – its natural habitat is global”. Equustek argued that without a global injunction, purchasers (both within Canada and foreign) could easily locate Datalink’s websites.  The majority of the Court agreed.  De-indexing search results on only www.google.ca had no realistic prospect of preventing the irreparable harm to Equustek.

In response to freedom expression arguments, Abella J. stated:

[48] This is not an order to remove speech that, on its face, engages freedom of expression values, it is an order to de-index websites that are in violation of several court orders. We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.

But what about the hardship on the innocent third party Google? Google acknowledged that it did not need to take any steps around the world and that it only needed to make changes where its search engine is controlled, something that it does with relative ease.  The majority further noted that Google has not brought any application with evidence that it would have difficulty complying with the global injunction as a result of violating the laws of another jurisdiction (such as freedom of expression laws) nor has Google brought any application seeking to vary or vacate the injunction on the basis that it has been in place for an “inordinate amount of time”.  It will be interesting to see whether Google brings any such applications in the future.

The dissent (Côté and Rowe JJ.) expressed the need for judicial restraint particularly considering that the order sought was against an innocent third party who “neither acted unlawfully, nor aided and abetted illegal action”. The dissent also viewed the global interlocutory order as essentially amounting to a final remedy and that with such an order, there would be little incentive for Equustek to proceed to trial.  In their opinion, alternate remedies to Equustek were still available including seeking to freeze Datalink’s assets in France through French courts.

Ultimately the facts and legal history (Datalink’s abandonment of the proceedings, circumvention of court orders, and continuing sales from unknown jurisdictions) favoured the granting of the worldwide de-indexing injunction against Google. Future cases will almost certainly be distinguishable.

 

Nevertheless, as a result of the Equustek decision, we expect to see an uptick in parties seeking global injunctions against Google through both Canadian and foreign courts.  Watch out Bing, Yahoo!, and Amazon, you are next on the hit list.