Case Law, Canada: Equustek Solutions v Jack, worldwide injunction against Google ordering removal of websites from search results – Hugh Tomlinson QC

26 06 2014

logoIn the case of Equustek Solutions Inc. v Jack (2014 BCSC 1063) the Supreme Court of British Columbia granted a remarkable interim injunction against Google Inc ordering it to stop indexing or referencing certain websites in its search results everywhere in the world.  In the course of the judgment the Judge considered a number of issues of general importance regarding orders against third parties engaged in worldwide e-commerce.  Google has indicated it will appeal.

Background 

The plaintiffs are manufacturers of networking devices.  They claimed that the defendants had conspired with a former employee to design and manufacture a competing product using their trade secrets.  The defendants then advertised the plaintiffs’ products on their websites but delivered their own competing product when they received orders for the plaintiff’s products, engaging in “bait and switch” tactics.

The plaintiffs obtained court orders against the defendants who, although originally based in Vancouver, operated a “virtual company”, carrying on business through a complex and expanding network of websites [7].

The defendants’ websites were the subject of numerous court orders preventing the defendants from carrying on business through these websites but the defendants continued to sell their product online.

In December 2012 Google voluntarily complied with the plaintiffs’ requests to remove specific webpages or URLs from its Google.ca search results but it was unwilling to block an entire category of URLs from its search results worldwide.

The plaintiffs sought an injunction against Google Inc on the basis that its search engine facilitated the defendants’ ongoing breach of the Court’s orders.

Google argued that the Court did not have jurisdiction over either Google Inc or Google Canada because neither were present in British Columbia and because the injunction did not relate to Google doing or refraining from doing any act in British Columbia or Canada.  It went on to argue that even if the Court had jurisdiction, the order should not be made because

(i)    would amount to a worldwide order that could not be enforced and

(ii)   would constitute an unwarranted intrusion into Google’s lawful business activities as a search engine.

Judgment

Introduction

In a comprehensive judgment Fenlon J analysed the issues which arose under three headings

(i)    Does the Court have territorial competence over a worldwide internet search provider such as Google?

(ii)    If the answer to the first question is yes, should the Court decline to exercise jurisdiction on the basis that California is the more appropriate forum?

(iii)   Should the order sought be granted?

Territorial Competence

The Judge held that the action was brought to enforce the plaintiffs’ intellectual property rights in British Columbia and that it concerned a business which Google carried on in British Columbia.

E-commerce had increased the difficulty of determining whether a company is carrying on business in a particular jurisdiction.  Google submitted that it merely offered a passive website to residents of British Columbia who wished to search the internet. [47] This submission was rejected.  The Judge concluded 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 … [48]

Google collects a wide range of information as a user searches, including the user’s IP address, location, search terms, and whether the user acts on the search results offered by “clicking through” to the websites on the list [49]

In addition to its search service, Google sells advertising to British Columbia clients” [50]

… British Columbia residents who wish to advertise on Google’s webpages contract directly with Google and make payments directly to Google” [51]

The Judge rejected the submission that Google’s advertising services are completely separate from its search services.  She pointed out that Google’s business model is contextual advertising – the context being the search done using its search services, being geared to a particular searcher.  She relied on the decision in Google Spain in this context [57] to [60].

The Judge was unimpressed by Google’s submission that this analysis would give every state in the world jurisdiction over its search services:

That may be so. But if so, it flows as a natural consequence of Google doing business on a global scale, not from a flaw in the territorial competence analysis. … Further, the territorial competence analysis would not give every state unlimited jurisdiction over Google; jurisdiction will be confined to issues closely associated with the forum in accordance with private international law” [64].

 Appropriate Forum

Under this heading, the Judge considered three submissions by Google in support of the contention that California was the most appropriate forum for the action.

First, Google argued that the Court should decline jurisdiction because it had agreed to block specific websites from its search results and the plaintiffs have failed to avail themselves of that out-of-court remedy.   The Judge rejected this argument, holding that the process was wholly unsatisfactory from the plaintiffs’ perspective:

In place of the de-indexed websites, a whole host of new websites moved up the rankings to take their place. Websites can be generated automatically, resulting in an endless game of “whac-a-mole” with the plaintiffs identifying new URLs and Google deleting them. The plaintiffs argue that any scheme that depends on the deletion of individual URLs is ineffective [72].

The insufficiency of the voluntary take-down of specific websites was recognized by the Regional Court of Paris in the unreported decision Trib Gr Inst Paris, 6 November 2013, Max Mosley v. Google France SARL and Google Inc[73]

The inadequacy of this approach was heightened by the fact that Google had only removed specific URLs from searches initiated through Google.ca [75].

Second, Google argued that it had a stronger connection to California, where it had its head office.  The Judge considered the factors under this head favoured British Columbia.  The main ground relied on was Google’s contention that an order could not be enforced against it.  The Judge noted the difficulties of enforcement but suggested that other methods of enforcement apart from fines and imprisonment could be used.

Third, Google argued that an order made by a California court could be enforced.  The Judge accepted that such enforcement would be easier but this was not a decisive factor on jurisdiction.

Jurisdiction and whether the order should be granted

Google submitted that the Court did not have jurisdiction to make an order against a non-party who owes no duty to the plaintiff.

The Judge noted the jurisdiction to make orders against non-parties under the Norwich Pharmacal jurisdiction.  She went on to note the Court’s inherent jurisdiction to maintain the rule of law and to control is own process, evident in the development of the Mareva injunction (in England, now the “freezing order”) [121] to [122].

She concluded that

“the Court has authority to grant an injunction against a non-party resident in a foreign jurisdiction in appropriate circumstances. 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”. [133]

Having decided that there was jurisdiction, the Judge considered four arguments advanced by Google against the making of an order.

First, Google argued that it could not, as a practical matter monitor content “because it cannot determine whether information is inaccurate or lawful; and because content on websites is constantly changing so even if Google could form judgments about the content of sites on its index at any given moment, those judgments would be obsolete moments later” [136]  However, the Judge noted that the order sought would not require Google to monitor the content of the defendant’s websites but, rather, to remove those websites from its searches.

Secondly, Google submitted “it would be unjust to make the order sought because de-indexing entire websites without regard to content of the specific URLs would constitute undue censorship[138].  The Judge did not find this argument persuasive

“Google acknowledges that it alters search results to avoid generating links to child pornography and “hate speech” websites. It recognizes its corporate responsibility in this regard, employing 47 full-time employees worldwide who, like Mr. Smith, take down specific websites, including websites subject to court order. Excluding the defendant’s prohibited websites from search results is in keeping with Google’s approach to blocking websites subject to court order” [139].

Third, Google argued that the Court should not make an order that could affect searches worldwide because this would put it in the impossible situation of being ordered to do something that could require it to contravene the law in another jurisdiction [139].

The Judge accepted that this was a proper concern – but said it could be address by inserting a proviso which would excuse the non-party from compliance with the order if to so would breach local laws (in Mareva cases called a “Baltic” proviso).

Fourth, Google argued that the order was too broad and should be limited to Google.ca. The Judge noted that

“although Google has a website for each country to which searches made within that country default, users can override that default and access other country’s Google websites. For example, even if the defendants’ websites were blocked from searches conducted through www.google.ca, Canadian users can go to www.google.co.uk or www.google.fr and obtain results including the defendants’ websites. On the record before me it appears that to be effective, even within Canada, Google must block search results on all of its websites” [148].

Google relied on the case of Max Mosley v Google France SARL – in which the Court accepted Google’s argument that the removal of certain images should be restricted to searches that could be conducted from within France [149].  However, the Judge noted that this was based on the fact that the images were a breach of French law but not that of other countries.

The Judge then considered the balancing of the interests of Google and those of the plaintiffs.  She noted that the factors identified in Norwich Pharmacal were of assistance.  She noted that

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” [156].

The fundamental question was whether the grant of an injunction was just and equitable.  She noted that

“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”. [159]

The order granted was, therefore as follows:

“Within 14 days of the date of this judgment, Google Inc. is to cease indexing or referencing in search results on its internet search engines the websites contained in Schedule A to the notice of application” [161].

Comment

This is a fascinating and far reaching decision of, potentially, very wide application.  It remains to be seen whether it will become a template for further orders in Canada and other jurisdictions.  As already mentioned, in accordance with its usual approach to orders of this kind Google has indicated that it intends to appeal.

The decision on whether the court had jurisdiction over Google was based on a range of factors which, in England, would be considered under the rubric of “service out of the jurisdiction”.  It is difficult to see how an English Court could have permitted “service out of the jurisdiction” on the facts of this case.  The claimant would have to argue that the order being sought was for an injunction “ordering the defendant to do or refrain from doing an act within the jurisdiction” PD 6B, para 3.1(2).  It might be thought that difficulty with that approach in this particular case is that it appeared to be accepted that the order concerns acts to be carried out “outside” the jurisdiction.  It could, however, be argued what was being sought was a prohibitory injunction to prevent the publication of search results in the jurisdiction.  It is, therefore, possible that under English procedural rules, jurisdiction could be established.  In contrast to the position in British Columbia, this could not be done by showing that Google Inc “carried out business” in the jurisdiction.

The jurisdiction to make the order is more interesting.  Although the claimant had no cause of action against Google it is clearly established that a Court can grant interim injunctive relief to prevent frustration of its process by a defendant.  This is the doctrinal basis of the Mareva injunction and can, arguably, be extended to injunctions of this kind.   As with a Mareva injunction, a worldwide order can be made against a defendant within the court’s jurisdiction – with a proviso to protect against conflicts with the law in other jurisdictions.

In deciding whether to make the order the Judge rejected a number of arguments which have been advanced by Google in other jurisdictions against making general orders requiring it not to index or reference particular websites.   In particular, she refused to make what would be an artificial limitation to Google.ca – all the different versions of the Google search engine are accessible in every country and, in order to be effective, “de-indexing” must cover every version of the Google search engine.

It has been suggested that the implications of this decision are very disturbing.  For example, Michael Geist argues that:

“if a Canadian court has the power to limit access to information for the globe, presumably other courts would as well. While the court does not grapple with this possibility, what happens if a Russian court orders Google to remove gay and lesbian sites from its database? Or if Iran orders it remove Israeli sites from the database? The possibilities are endless since local rules of freedom of expression often differ from country to country”

But such risks exist already – and will continue to do so whatever Canadian courts decide.  If a Russian or Iranian court made an order of the type envisaged, doubtless Google would refuse to comply.  Different considerations apply to orders made after full legal argument (Google was represented in this case by two Senior Counsel) in countries where there are fair trial rights, independent judges and other rule of law protections.  If, after full argument and appeals, the Canadian courts uphold this order it is difficult to see how Google could properly resist complying with it.  It is difficult to disagree with the Judge’s basic point is that Google engages in e-commerce in British Columbia and must, ultimately, comply with local laws.

 


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