On June 28, the Supreme Court of Canada (SCC) released its decision in Google Inc. v. Equustek Solutions Inc.1 This is an appeal brought by Google from a decision of the British Columbia Court of Appeal, which granted an interlocutory injunction ordering Google to globally remove certain websites from its search engine. Equustek had alleged in the underlying action that these websites were selling goods that infringed its intellectual property.
Equustek, the plaintiff in the underlying action, is a British Columbia company that makes networking equipment for industrial machinery.2 Datalink, the defendant in the underlying action, acted as Equustek's distributor until it allegedly began to re-label one of Equustek's products as its own and ultimately used Equustek's trade secrets to design and manufacture a competing product. Datalink sold its competing product online and customers were able to find Datalink's website by searching on Google.3
Equustek obtained several injunctions against Datalink. Datalink did not comply. When Google, at Equustek's request, voluntarily began removing individual Datalink webpages from its Canadian website, google.ca (a process known as "de-indexing"), Datalink would move its content to other pages on its website.4
In accordance with an internal policy and out of concern for implications on freedom of expression, Google refused to de-index the entire Datalink website and refused to make any de-indexing effective outside Canada, meaning that the Datalink's material that is subject to an injunction could be found on google.com, google.co.uk, etc. It could also be located on other search engines or accessed directly.
Even though Google was not a party to the underlying action, Equustek sought an injunction against Google, ordering it to de-list all Datalink websites globally.5 The British Columbia Supreme Court granted that ruling and the British Columbia Court of Appeal upheld it.
Decision of the Supreme Court of Canada
The SCC, by a seven judge majority, upheld the global injunction. Two judges dissented.
Google had argued that the injunction should not have been granted. It asserted that as a non-party to the underlying dispute, it should be immune to the injunction, that a worldwide order is improper and that freedom of expression concerns militate against the order. These arguments were rejected by the majority of the SCC.
Injunctions against Non-Parties
The majority held that there was no bar to ordering injunctions against non-parties. The test is the same as ordering an injunction against a party.6 Non-parties are bound by a court's orders just as are parties.7 Google's assistance was found to be necessary to prevent the facilitation of Datalink's defiance of court orders doing irreparable harm to Equustek.8 This made the order appropriate against Google as a non-party.
Injunctions with Extraterritorial Effects
The majority also held that an injunction was appropriate against Google's global operations—meaning de-indexing from all of Google's sites all over the world. Because Datalink's customers were located all over the world, restricting the injunction to Canada alone would render it incapable of preventing harm to Equustek.9 Key to the majority's consideration was the fact that there was no evidence that the extraterritorial effect of the injunction would pose any significant cost or administrative burden on Google—Google could make this change centrally and regularly de-indexes other types of websites such as those containing child pornography, hate speech, and copyrighted material.10
The Court also rejected arguments surrounding comity: that such an injunction was not obtainable in certain foreign jurisdiction and/or would violate laws in those jurisdictions. The Court held, in the absence of evidence specific actual conflict, comity was not a concern.11
Freedom of Expression
The majority of the SCC held that it is very unlikely that the order offends freedom of expression sensibilities, given that the websites in issue were in violation of several court orders. Any concern that this injunction engages freedom of expression is "far outweighed" by the need to prevent irreparable harm to the owner of the intellectual property and is justified.12
The majority found that a worldwide injunction is the "only effective way to mitigate harm to Equustek,"13 and is not outweighed by the issues raised by Google. As a result, it upheld the order of the lower courts.
1 Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 ("Equustek").
2 Equustek, para. 2.
3 Equustek, paras. 2-3, 8, 11-12.
4 Equustek, para. 15.
5 Equustek, para. 16.
6 Equustek, para. 28.
7 Equustek, paras. 28-29.
8 Equustek, para. 35.
9 Equustek, para. 41.
10 Equustek, para. 43, 50.
11 Equustek, para. 44.
12 Equustek, paras. 45-49.
13 Equustek, para. 53.
To discuss these issues, please contact the author(s).
This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.
For permission to republish this or any other publication, contact Janelle Weed.
© 2017 by Torys LLP.
All rights reserved.