The Supreme Court of Canada has issued its decision in Google Inc v Equustek (2017 SCC 34). This is the case in which a small Canadian technology company, Equustek, asked the Canadian courts to grant an injunction against the well-known US search engine ordering it to de-index specified websites – not just on its Canadian domain google.ca, but on a worldwide basis.
The injunction was an interim order pending trial of Equustek’s action against the operator of the websites. The SCC (by a 7-2 majority) dismissed Google’s appeal and upheld the injunction.
According to taste and point of view the decision is:
(a) a victory for a small Canadian company against a US tech giant
(b) a damaging precedent for future overreaching assertions of extraterritorial jurisdiction by other nation states
(c) a narrowly decided case about interim injunctions with few broad implications
(d) a case that paid insufficient attention to its underlying territorial moorings
(e) a decision that reinforces the role that online intermediaries can and should play in combating unlawful activities
(f) a case heavily influenced by the unattractive behaviour of the operator of the impugned websites, which lays down little in the way of principle to guide future cases
(g) an uncontroversial and well-reasoned illustration of the circumstances in which a court may make orders with extraterritorial effect
(h) another nail in the coffin of worldwide freedom of expression
(i) a pointless exercise in applying national law to the inherently borderless internet.
Commentators critical and supportive (here, here, here, here, here, here and here) have begun to dissect the decision. Some reaction has been less than nuanced. One tweet asked what business a national court had upholding a global injunction, as if no national court had ever issued an injunction with extraterritorial effect before.
Courts have long considered themselves able to grant extraterritorial injunctions. However, out of concern for offending the sensibilities of other territorially sovereign states (comity) they have tended to exercise caution about the circumstances in which they should do so, about the extent of the injunction and to pay close attention to safeguards designed to minimise any possible international conflict.
The difference between Equustek and previous kinds of world-wide injunction (such as asset-freezing orders) is of course the internet. That distinction cuts both ways. In one direction (emphasised by the SCC) it may be said that a worldwide medium requires a worldwide remedy if it is to be effective. In the other direction the internet, as a cross-border vehicle for speech, amplifies and broadens the extraterritorial impact of injunctions aimed at online activity. From that perspective national courts should be more, not less, cautious about extraterritorial effects on the internet.
Comity urges sensitivity to the concerns of other states, including a state’s interest in protecting the rights of its own citizens. The British Columbia Court of Appeal judgment in Equustek adopted this description of comity in the Canadian case of Spencer v The Queen:
“Comity” in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience and to the rights of its own citizens or other persons who are under the protection of its laws ….’ (emphasis added)
However in the context of modern day international human rights we are concerned not only with the sensibilities of other states as proxies for their citizens, but with directly respecting the fundamental rights of internet users in other countries. Typically in internet cases those will be rights to privacy (as in the US Microsoft Warrant case) or freedom of expression (as in Equustek). The fundamental rights of internet users are a separate matter from the sensibilities of a nation state. To focus only on state sensitivities risks overlooking or understating the distinct interests of their citizens. (For more on this topic see my chapter in the recently published book ‘The Net and the Nation State’.)
Cases on extraterritorial injunctions tend to resolve themselves into questions not of whether a court has the power to make an extraterritorial order, but whether it should exercise that power and if so how. That is a question of discretion, involving any applicable principles on which discretion should be exercised, and voluntary jurisdictional self-restraint. When faced with a bad actor, an ugly set of facts and a demand for an effective remedy it is all the more important that a court should anxiously examine the basis for exercising its power and carefully identify and balance competing factors, even – perhaps especially – where the internet is concerned.
Whatever the future significance of the Equustek decision (a rich source of jurisprudence or a barren seed destined for obscurity) the factual background to the case is unusual and provides illuminating context for the way in which the Supreme Court of Canada approached the case. (Caveat: my comments are from the perspective of an English lawyer, with no particular knowledge of Canadian law.)
Background and context
The story starts fairly conventionally when Equustek, a manufacturer of electronic networking products, fell out with its distributor Datalink Technologies Gateways Inc (‘Datalink’), which then operated from Vancouver. Equustek claimed that for many years Datalink had been re-labelling one of Equustek’s products and passing it off as Datalink’s own; that Datalink then acquired confidential information and misused it to design and manufacture a competing product; and that Datalink then passed off the competing product by supplying it in substitution for Equustek products advertised on its websites. Equustek terminated the distribution agreement and in April 2011 started litigation in British Columbia against Datalink and its principal.
Initially Datalink defended the proceedings. However the complexion of the dispute changed in 2012 with Datalink abandoning its defence, skipping the jurisdiction, setting up numerous shell companies, operating multiple websites and breaching various orders made by the Canadian courts.
Whatever may have been the merits (or not) of its original defence, Datalink now exhibited the demeanour of a fugitive from justice. Among the injunctions granted against Datalink during 2012 was an order freezing Datalink’s assets worldwide. In September 2012 Equustek applied for Datalink and its principal to be found in contempt of court. The Canadian court issued a warrant for the arrest of the principal.
The defences of two of the defendants were struck out in June 2012 for failure to comply with court orders (and the third in March 2013). As the first instance judge (Fenlon J.) observed they were therefore presumed to admit the allegations against them. Although Equustek was given permission in June 2012 to apply for final judgment against Datalink it did not do so. As a consequence the interim orders made by the Canadian court continued in force.
Despite all this Datalink continued, according to the Supreme Court judgment, to carry on business from an unknown location, selling its impugned product on its websites to customers all over the world.
Google entered the picture in September 2012 when Equustek asked it to de-index the Datalink websites. Google refused, following which Equustek applied for an order requiring it to do so.
Google then told Equustek that if it obtained an order against Datalink prohibiting it from carrying on business on the internet, Google would remove specific webpages (but not, in accordance with its internal policy, entire websites).
Shortly afterwards, in December 2012, Equustek (supported by Google) obtained from the Canadian court an injunction against Datalink ordering it to “cease operating or carrying on business through any website“. The SCC judgment does not state in terms whether this injunction was itself worldwide. However in the context of Datalink having moved its activities outside Canada, it would be unsurprising if the order were understood to include Datalink websites operated from outside Canada, and not limited to the .ca domain. In any event that is the implication of statements in the judgments that Datalink’s activities outside Canada had breached that order.
Parenthetically, a previous judgment of the Canadian Supreme Court (Pro Swing) counsels the need to be explicit about the territorial scope of injunctions when dealing with the internet and territorially defined rights such as trade marks:
“The Internet component does not transform the US trademark protection into a worldwide one. …
Extraterritoriality and comity cannot serve as a substitute for a lack of worldwide trademark protection. The Internet poses new challenges to trademark holders, but equitable jurisdiction cannot solve all their problems. In the future, when considering cases that are likely to result in proceedings in a foreign jurisdiction, judges will no doubt be alerted to the need to be clear as regards territoriality. Until now, this was not an issue because judgments enforcing trademark rights through injunctive relief were, by nature, not exportable.”
Following the December 2012 order against Datalink Google voluntarily removed specific webpages from its .ca search results. Equustek became aware of the limitation to google.ca in May 2013 as the result of cross-examining a Google witness (1st instance judgment ).
The order against Datalink requiring it to cease carrying on business on the internet was, as the dissenting judgment in the Supreme Court points out, wider than Equustek’s underlying claim against Datalink. That claim was for relief against specific aspects of Datalink’s business: using Equustek’s trade marks and free-riding on the goodwill of any Equustek product on any website, disparaging or in any way referring to Equustek products, distributing certain manuals and displaying images of Equustek’s products on any website; and selling a named line of products alleged to have been created by the theft (sic) of Equustek’s trade secrets.
But in the application against Google the effective complaint about Datalink moved away from Equustek’s underlying infringement claims. The basis of the decision to grant an order against Google was that Datalink, by continuing business on the internet, was breaching the existing wide interim injunction – an order obtained with the support of Google and which, the Supreme Court says [SCC 34], Google had offered to comply with voluntarily. Third parties with notice of an interim injunction can be treated as if bound by it [SCC 29, 33]. The claim for a de-indexing injunction against Google was therefore for an order piggybacked on a pre-existing broad and, it seems, worldwide injunction against Datalink.
The significance of the order requiring Datalink to cease carrying on business on the internet can be seen at all three judicial levels. Fenlon J. at first instance said that the plaintiffs sought the injunction against Google to prevent continued and flagrant breaches of the court’s orders in the underlying action [1st inst. 86]. The BC Court of Appeal described the injunction claimed against Google as ‘ancillary relief designed to ensure that orders already granted against the defendants are effective’ (emphasis added) [BCCA 2].
The Supreme Court emphasised that in the absence of de-indexing the sites Google was facilitating Datalink’s breach of the order “by enabling it to carry on business through the Internet” (emphasis added). [SCC 34] The de-indexing injunction against Google was said to flow from the necessity of Google’s assistance to prevent the facilitation of Datalink’s ‘ability to defy court orders and do irreparable harm to Equustek’ (emphasis added) [SCC 35].
The specifics of Equustek’s underlying complaints against Datalink and (pertinently, in a case where the appropriateness of a worldwide injunction was in issue) the extent to which they may have been based on territorially limited Canadian rights received relatively little attention.
The fact that an underlying claim is territorially limited does not mean that interim ancillary relief must be similarly limited. Otherwise it would not be possible to grant a worldwide asset-freezing injunction in a case based on a territorially limited right. However, as the minority judgment pointed out, a de-indexing injunction differs from an asset freezing injunction (the rationale for which is to maintain the integrity of the court’s process [1st instance 132]) in that it enforces a plaintiff’s asserted substantive rights [SCC 72].
In principle any consideration of whether to grant a worldwide de-indexing injunction against an intermediary ought therefore to take into account the nature and territorial extent of the claims made and rights asserted against the alleged wrongdoer. All the interests potentially affected by the grant of the injunction can then be identified and weighed.
It does not necessarily follow that if the SCC had approached these issues differently the outcome would have changed significantly, or indeed at all. This was after all an appeal against an exercise of the court’s discretion, which is entitled to a high degree of deference [SCC 22]. And the underlying defendant’s flouting of court orders was always likely to weigh heavily.
Nevertheless, the minority two judges of the SCC considered that the majority seven judges had not exercised sufficient judicial restraint. They would not have made the order at all. At any event a closer analysis of extraterritoriality might provided a more detailed foundation on which to consider different factual situations in future cases.
The SCC’s reasoning
My focus is on three aspects of the SCC’s reasoning:
- The range of interests engaged by an extraterritorial de-indexing injunction
- Territoriality of underlying claims against Datalink; and
- Approach to freedom of speech rights.
Interests engaged by a worldwide de-indexing injunction
The SCC discussed worldwide injunctions against offline intermediaries and domestic injunctions against online intermediaries such as ISP site blocking orders. These precedents, however, do not fully address the issues that arise with a global de-indexing injunction against a search engine.
Under existing caselaw ancillary orders may be granted that affect offline intermediaries such as banks. Such an order can cover freezing of a defendant’s assets and disclosure of information identifying bank accounts and about their contents. Both elements can be granted on a worldwide basis. A third party such a bank can be required to assist.
The courts have been at pains both to respect the position of the intermediary as a party not accused of wrongdoing and to minimise the possibility of conflict with foreign law. Thus the standard form English worldwide asset freezing injunction contains several safeguards:
- The Babanaft proviso. The order is only to affect a third party in a foreign country to the extent that the order is declared enforceable by, or is enforced by, a court in that country.
- An undertaking by the applicant not, without the permission of the court, to seek to enforce the order in any country outside England and Wales.
- The Baltic proviso. Nothing in the order, in respect of assets located outside England and Wales, prevents any third party (whether within or outside the jurisdiction) from complying with what it reasonably believes to be its obligation, contractual or otherwise, under the laws and obligations of the country or state in which those assets are situated; and any orders of the courts of that country or state.
These provisions achieve three things. The Babanaft proviso minimises potential comity and conflict of law problems by making the order conditional on enforcement in the foreign court; the undertaking enables the English court to prevent the applicant taking oppressive enforcement action in a foreign country; and the Baltic proviso recognises that even a third party within England and Wales (such as a London bank with a foreign branch where an account is held) ought not to be compelled to do something contrary to foreign law or court order.
The banking system, like the internet, is international. But the courts have recognised, even faced with hard cases such as alleged fraud, the need to pay careful attention to balancing the various state and non-state interests involved.
Asset freezing orders affect fewer interests than does a worldwide de-indexing injunction. A freezing injunction typically affects only the claimant, the defendant and its assets, any third party (such as a bank) that may be holding that defendant’s assets, and potentially the sovereignty of any state in which those assets may be held.
A worldwide de-indexing injunction against a search engine engages a new category: the millions of people around the world who would otherwise be able to seek out the material. This is novel territory, engaging a different kind of interest: freedom of speech at scale.
In Equustek the first instance judge Fenlon J. considered whether a Baltic proviso should be inserted in the order, but decided it was not necessary:
“In the present case, Google is before this Court and does not suggest that an order requiring it to block the defendants’ websites would offend California law, or indeed the law of any state or country from which a search could be conducted. Google acknowledges that most countries will likely recognise intellectual property rights and view the selling of pirated products as a legal wrong.” [1st inst. 144]…
“Google was named in this application, served with materials, and attended the hearing. It is not therefore necessary to craft terms anticipating possible conflicts Google could face in complying with the interim injunction. No terms of this kind have been requested by Google and I see no basis on the record before me to expect such difficulties.” [1st inst. 160]
The BC Court of Appeal added that “in the unlikely event that any jurisdiction finds the order offensive to its core values, an application could be made to court to modify the order so as to avoid the problem.” [BCCA 94]
The SCC similarly relied on Google’s ability to apply to modify the order:
“If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly. To date, Google has made no such application” [SCC 46]
“In the absence of an evidentiary foundation, and given Google’s right to seek a rectifying order, it hardly seems equitable to deny Equustek the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible. We are dealing with the Internet after all, and the balance of convenience test has to take full account of its inevitable extraterritorial reach when injunctive relief is being sought against an entity like Google.” (emphasis added) [SCC 47]
Unlike the Babanaft and Baltic provisos this places the burden on the third party to demonstrate that compliance with the injunction would place it in conflict with another state’s laws, rather than crafting the injunction so as to minimise the risk of the third party being placed in that position in the first place. Of course asset freezing orders have to anticipate in a vacuum potential difficulties for third parties, since they are made without the presence of the third party in court. In Equustek Google was, as Fenlon J commented, before the court. Whether that is a good basis on which to shift the burden to the third party is a question that will no doubt be revisited in future cases.
The SCC was sceptical of the possibility of conflicts with other jurisdictions’ laws. First it observed that there was no harm to Google because it did not have to take steps around the world, but only where its search engine was controlled. [SCC 43]
It went on:
“Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction is, with respect, theoretical. As Fenlon J. noted, ‘Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong.‘” [SCC 44]
The passage refers to comity. It does not address the new element introduced by a worldwide de-indexing injunction, namely potential interference with freedom of speech rights of individual internet users in other countries. This is different from the question of whether the injunction might require the search engine to violate the law of another state. It is quite possible for a search engine’s compliance with an injunction to inhibit users’ access to a website (and thus engage their freedom of speech rights) in another country without the search engine itself contravening the law of that country.
Nor does the passage distinguish between the abstract concept of a state recognising intellectual property rights and the question of what specific rights Equustek may or may not have possessed outside Canada, to which I now turn.
Territoriality of underlying claims
As to territoriality of Equustek’s underlying claims, one of the claims was for passing off. A claim for passing off has to be supported by goodwill, which is territorial. A Canadian company doing business in Canada will own goodwill in Canada, plus in any other countries in which it does business. The geographic extent of the plaintiff’s business determines the geographic extent of its rights. The plaintiff does not automatically have worldwide rights.
Equustek’s other main claim against Datalink was for breach of confidence. Unlike passing off that, at least in English law, is not in its nature a territorially delimited right. It is an equitable obligation owed personally rather than something in the nature of a property right. On the assumption that most countries recognise breach of confidence as a cause of action, that might provide a stronger foundation for a worldwide remedy than for passing off.
The SCC did not analyse these separate causes of action, no doubt because its emphasis was on breach of the court order preventing Datalink from carrying on business on the internet rather than on Equustek’s underlying claims against Datalink.
Instead the SCC concentrated on the harm that Datalink’s various internet-based wrongdoings were causing to Equustek on a worldwide basis, with no analysis of the geographical extent of Equustek’s business or rights:
“The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink’s sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink’s websites, and Canadian purchasers could easily find Datalink’s websites even if those websites were de-indexed on google.ca. Google would still be facilitating Datalink’s breach of the court’s order which had prohibited it from carrying on business on the Internet.” [SCC 41]
This passage justifies the worldwide nature of the injunction on two separate and distinct grounds.
The first is that purchasers outside Canada could continue to purchase from Datalink’s websites. The SCC tells us (, ) that the majority of Datalink’s sales were to purchasers outside Canada. The first instance judge said that Datalink’s sales originated primarily in other countries, “so the court’s process cannot be protected unless the injunction ensures that searchers from any jurisdiction do not find [Datalink’s] websites”. [SCC 19]
Whilst from one perspective this factual context may be seen as reinforcing the need for extraterritorial relief, from another the intention to prevent searchers from countries other than Canada accessing Datalink’s sites raises the question whether any of Equustek’s rights were territorially limited and whether it had any rights outside Canada.
None of the three judgments (first instance, BC Court of Appeal, Supreme Court) contains an explanation of whether Equustek claimed to have rights worldwide, and if so what rights. (One of the previous judgments in the underlying litigation between Equustek and Datalink refers to a predecessor company of Datalink having at some time previously distributed Equustek’s products in Canada and the USA.)
The closest is a comment by Fenlon J. at first instance that the French case of Max Mosley was distinguishable on the basis that publication of the images in that case was a breach of the French penal code and was not a breach of the laws of other countries. The implication is that in Equustek there was a breach of other countries’ laws. If Equustek did have a worldwide business and rights outside Canada that is not made clear in the judgments.
There may also be an implication from the suggestion in the SCC judgment that Equustek was being harmed worldwide that Equustek had business or underlying rights worldwide. But nowhere is that made explicit.
The second ground on which the passage quoted above justifies the worldwide nature of the injunction is that purchasers inside Canada could easily find Datalink’s sites on Google search domains other than .ca. At first instance Fenlon J. also concluded that to be effective even within Canada Google had to block search results on all its websites. [SCC 40]
This ground is implicitly based only on Equustek’s domestic rights in Canada. That could raise the question of how far a court should strive to prevent local users’ access to a foreign website without first considering whether such a site is targeted at its country. There is a trend in intellectual property to hold that a foreign site does not by virtue of its visibility alone substantively infringe (say) a domestic trade mark. Targeting the jurisdiction is also required.
More generally, an application for an extraterritorial de-indexing injunction based purely on domestic rights is likely to be treated with more circumspection than one underpinned by an express showing of worldwide rights.
Approach to freedom of speech rights
The third aspect of the SCC judgment of particular interest is its approach to freedom of expression.
The SCC, while acknowledging the significance of freedom of expression, in this case saw it as weakly engaged:
“And while it is always important to pay respectful attention to freedom of expression concerns, particularly when dealing with the core values of another country, I do not see freedom of expression issues being engaged in any way that tips the balance of convenience towards Google in this case.” [SCC 45]
How did the SCC reach this conclusion?
The SCC effectively sidelined the question of individual freedom of speech rights by equating freedom of speech with comity. It endorsed the reasoning of the BC Court of Appeal, which had said:
“In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation. It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation.” [BCCA 93]
However this passage frames a fundamental rights question (would this remedy engage the freedom of speech rights of internet users in country X?) as a purely state-centric comity issue (would this remedy offend the sensibilities of State X?).
The SCC appears to address that comity question by asking not whether Equustek had any relevant rights in other countries, but whether at some abstract level another state might be offended by a Canadian court enforcing the plaintiff’s intellectual property rights.
This brings us back to the point that intellectual property rights are mostly local, not global. A UK right is separate from a US right and so on. For many IP rights (particularly trade marks and patents) we cannot assume that because someone owns a right in country A it owns a corresponding right in country B. Often they do not. Some IP rights (such as copyright) do come closer to being global, since states party to international treaties undertake to grant automatic reciprocal rights to other states’ nationals. Even then the content and scope of the rights will differ from one country to another.
So if, for instance, Equustek had trade mark rights or goodwill only in Canada (which, to repeat, the SCC judgment does not discuss) then the grant of a worldwide de-indexing injunction would inhibit users in other countries from accessing sites which, as a matter of the trade mark law of those countries, they would be entitled to see. That would strongly engage their individual freedom of expression rights. Even viewed purely as a comity question, might that not offend the sensibilities of that state?
The territorial nature of most IP rights also provides perspective for the comment of the SCC that it hardly seemed equitable to put the onus on Equustek to demonstrate, country by country, where an extraterritorial order is legally permissible.
If a plaintiff seeks a worldwide order against a non-wrongdoer third party that engages the fundamental rights of millions of internet users around the world, why (it might be asked) should it not have to make some kind of showing that it has rights in those other countries that could underpin the grant of such relief?
It must be acknowledged (again) that the territoriality of trade marks and passing off is a different matter from territoriality of breach of confidence. One can envisage arguments that breach of confidence, as a personally owed equitable obligation, might require less of a showing of rights in other countries than the inherently territorial passing off.
However the SCC judgment undertakes no analysis of that kind, perhaps because (as already discussed) the real foundation of the de-indexing injunction against Google was not Equustek’s underlying claims against Datalink at all, but the broad and apparently worldwide order against Datalink to cease carrying on business through any website.
Indeed the BC Court of Appeal, commenting on freedom of expression concerns raised not only by Google but also by intervenors the Canadian Civil Liberties Association and the Electronic Frontier Foundation, said:
“The order made in this case is an ancillary order designed to give force to earlier orders prohibiting the defendants from marketing their product. Those orders were made after thorough consideration of the strength of the plaintiffs’ and defendants’ cases. Google does not suggest that the orders made against the defendants were inappropriate, nor do the intervenors suggest that those orders constituted an inappropriate intrusion on freedom of speech.” (emphasis added) [BCCA 109]
Nevertheless, in terms of justifying the impact of the claimed relief on freedom of speech rights of internet users in other countries it might be thought that in such a case the more relevant consideration is not the breadth of a pre-existing order made against the defendant by the domestic court, but whether the plaintiff has underlying rights in those countries capable of justifying the interference.
The SCC went further and said that the de-indexing order did not engage freedom of expression values at all:
“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.” [SCC 48]
Whatever the position in Canadian law, as a matter of international human rights law this passage elides the concepts of engagement and balancing of fundamental rights. The de-indexing order inhibits the ability of users to access and read the websites in question. That plainly engages the right of freedom of expression. For copyright that is established by the European Court of Human Rights Ashby decision.
The question of whether the interests of the plaintiff should outweigh an infringer’s (or in this case an internet user’s) right of free expression is a matter of necessity, proportionality and balancing the respective rights. Only exceptionally would an infringer’s right to freedom of expression outweigh that of the IP rightsowner (although it is possible). But that does not mean that the right of freedom of expression is not engaged. Once engaged, the need to justify the interference leads inexorably to the question of what, if any, rights, Equustek may have owned in countries in which users’ access to Datalink’s sites would be inhibited.
The SCC did go on to say that “Even if it could be said that the injunction engages freedom of expression issues, this is far outweighed by the need to prevent the irreparable harm that would result from Google’s facilitating Datalink’s breach of court orders.” [SCC 49] It is difficult to comment on this since the SCC evaluated the weight of the freedom of expression issues not in terms of the possible effect on individual users, but as a matter of state sensibilities.
In contrast, Fenlon J. at first instance identified the interests of internet users as a relevant factor in assessing the balance of convenience. Again this was with emphasis on the prexisting broad Canadian court order against Datalink rather than what underlying rights Equustek might have had in other countries:
“To this list of considerations I would add the degree to which interests of those other than the applicant and the identified non-party could be affected – here potential purchasers will not be able to find and buy the defendant’s products as easily, but that is as it should be in light of the existing court orders prohibiting the defendants from selling the GW1000 and related products.” (emphasis added) [1st inst. 155]
The dissenting judgment
The SCC upheld the de-indexing injunction by a 7-2 majority. The minority identified five factors that in their view told in favour of exercising judicial restraint and declining to make the order. Among the concerns they identified was lack of effectiveness, in that Datalink’s websites could be found by other means whether Google searches listed them or not. This suggested restraint in granting the de-indexing injunction. Effectiveness was also related to worldwide effect, in that “the quest for elusive effectiveness led to the [de-indexing order] having worldwide effect.” While the worldwide effect of the order did not make it more effective, it could raise questions of comity.
The minority were also concerned that although in form an application for interim relief, in substance it would effectively be a permanent injunction against a party that had neither acted unlawfully nor aided and abetted illegal action. It gave Equustek broader relief than it has claimed substantively against Datalink. The order was mandatory and would require court supervision (for instance in updating the list of websites to be de-indexed). The minority also considered that Equustek had alternative remedies available against Datalink in another jurisdiction.
Overall the minority considered that the majority had slipped too easily outside the constraints of settled doctrine and practice.
The path that led to the SCC judgment was factually convoluted and dominated by the behaviour of the underlying defendant. The central role played by the pre-existing, apparently worldwide, order requiring Datalink to cease doing business on the internet is striking. If for no other reason, the case may come to be seen as one very much on its own facts.
Where an apparent bad actor thumbs its nose at the court’s authority it is perhaps unsurprising that if a well-resourced global intermediary is haled into court, apparently able to take steps to mitigate damage to the plaintiff at little inconvenience to itself, the tribunal may (if satisfied that it has the power) be inclined to enlist its assistance.
Nevertheless if a future court should contemplate a similar order then a more detailed identification of the rights and interests involved, analysis of any territorial aspects of those rights and consideration of the freedom of speech rights of internet users separate from the sensibilities of states may be key to arriving at an appropriate outcome.
This post originally appeared on the Cyberleagle blog and is reproduced with permission and thanks.