Did the Courts go too far in Google Inc. v Equustek Solutions Inc?
Introduction
An ominous decision indeed! The Supreme Court of Canada in the recent controversial case, Google Inc. v Equustek Solutions Inc.[1], pulled a new missile from its arsenal when they ordered a reluctant Google to carry out instructions that had far-reaching global implications on its business. This missile, cloaked as an interlocutory injunction, has been fired at Google and blood has been drawn. Google has now gone home limping, licking its wounds seeking relief from its home court.
Global conglomerate Google has been crowned the leader in Internet searches because it has monopolised the market and have extended its reach across geographical borders. It boasts 2.3 million average number of searches per second and over 3.5 billion searches per day. With over 130 trillion webpages indexed on its platform, Google continues to secure as much as 75% of global searches on the Internet.[2]
Google’s main base of operation is in the United States (US) and the Supreme Court of Canada made an order with worldwide effect dictating how the $498-billion-dollar Search Provider should offer its services. Critics scoff at the ruling citing the decision as ominous and that it affects worldwide Information Access. Oddly enough, the majority of the bench were strong in their resolve regardless of the implications of its decision. Certainly, this unprecedented decision effectively pushed the boundaries of interlocutory injunctions and their applicability to non parties to a suit. Further, this case gave birth to the question of whether or not the Supreme Court of Canada has territorial competence over a transnational corporation.
Déjà vu? It seems like lightening does indeed strike twice in the same place. The French tried something similar back in 2002 when it ordered Google’s Search Engine rival, Yahoo!, to remove offensive material from its websites as well. The issue was whether Yahoo! could be prosecuted in France[3] and whether US courts should enforce the French order.[4] This begs the question, with the increase in global trade, should Courts at the national level be able to make judgments with extraterritorial effect, especially with respect to the fact jurisprudence can differ so drastically from country to country?[5] Although a necessary evil, the Supreme Court of Canada’s decision was merely a band-aid on a wound that requires stitching.
Summary of the Facts
The Supreme Court of Canada, on June 28, 2017 in a 7:2 decision, dismissed Google’s appeal against Equustek Solutions, ordering them to globally de-index Datalink’s websites from their search results. This extraterritorial injunction compelled Google to adhere to such strictures.
The Genesis
Equustek (the plaintiff at first instance) lodged a claim against Datalink Inc., for alleged intellectual property breaches. Equustek argued that Datalink stole the design of one of its products, rebranded it and started selling it online as if Datalink was the rightful owner. Equustek believed that Google facilitated Datalink’s clandestine activities by allowing their website to be in their search results. The plaintiffs then sought the Court’s assistance seeking an injunction that would stop Google from including Datalink’s website in their search results. This they believed would have effectively prohibited Datalink from continuing the said breaches. Google acquiesced to removing specific URLs under the google.ca domain (accessible within Canada). This means that only searches conducted within Canada would be affected. This proved to be an exercise in futility because Datalink continued its clandestine activities and would simply move the content to other parts of the website. Additionally, Datalink ceased operations in Canada, and from an unknown location, utilised several other websites to continue its breaches. Equustek then sought to obtain an order from the Supreme Court of British Columbia, which would in effect prevent Google from displaying any part of the website on any of its search results worldwide. Given the challenges faced by Equustek, the Court seemed to have had enough of Datalink’s shenanigans and ordered that Google remove Datalink’s entire domain from all search results, including those accessible around the world.
Where we are now
Google (the Appellant) petitioned unsuccessfully to the Court of Appeal of British Columbia as well as the Supreme Court of Canada citing concerns regarding freedom of speech, the effectiveness of the order and also that they were not a party to the substantive claim. As such, they argued that they should be immune from the effects of the extraterritorial reach of the order. These concerns, Google believed, should have cumulatively tipped the balance against granting the order.
The Legal Reasoning
The 7:2 majority judgment considered whether Google could be ordered, pending a trial, to globally de-index websites belonging to Datalink, who was in breach of several court orders. Majority of the panel was of the view that interlocutory injunctions are equitable remedies and as such its granting is wholly discretionary. In a bid to ensure that the subject matter of the litigation would be preserved to enable relief when the case is ultimately heard on its merits, the judges contemplated:
i) the jurisdiction of the court to grant orders against non parties and
ii) the extra territorial effect of such an order.
The jurisdiction of the court to grant orders against non parties
The courts relied on the reasoning of Norwich Pharmacal Co. v. Customs and Excise Commissioners[6] in supporting its own view that the court has jurisdiction and there has been judicial pronouncement which makes it pellucid that interlocutory orders can be granted against non parties. This view was bolstered by Cartier International AG v British Sky Broadcasting Ltd.[7] The Court then cited RJR — MacDonald Inc. v. Canada (Attorney General),[8] which sets out a three prong test in determining whether a court should exercise its discretion:
i) is there a serious case to be tried,
ii) would the person suffer irreparable harm if the injunction were not granted and
iii) is there a balance of convenience in granting or denying the injunction.
The effect of the test was ultimately to determine whether the granting of an injunction is just and equitable in all the circumstances surrounding the case.
The Court said that much like a Norwich order or a Mareva[9] injunction against a non-party, the interlocutory injunction in this case flows from the necessity of Google’s assistance in order to prevent the facilitation of Datalink’s ability to defy court orders and do irreparable harm to Equustek. Without the injunctive relief, it was clear that Google would continue to facilitate that ongoing harm. It is submitted that notwithstanding the courts reasoning, removing the sites from the search results does not prevent actual access to Datalink’s websites. Some argue that the courts perhaps needed a crash course on how the Internet actually works.
Extraterritorial effect of the injunction
The next bane of Google concerns the impropriety of issuing the said injunction attended by extraterritorial effect. Google maintained that it was highly improper for a court so constituted to grant the order. The Courts rejected this and stated that Google operated in the jurisdiction via advertising and search operations and that those activities were sufficient to establish the in personam and territorial jurisdictions which of note, was unchallenged by Google. Google instead took several issues citing inter alia that the global reach of the resulting order and as such maintained that the only appropriate injunction in the circumstances had to be limited to Canada (or google.ca) alone. These arguments were again rejected as the Court was of the view that where it has in personam jurisdiction, the Court had a duty to ensure the injunction’s effectiveness thus, they can grant an injunction enjoining that person’s conduct anywhere in the world. The Court was of the view, citing Impulsora Turistica de Occidente, S.A. de C.V. v. Transat Tours Canada Inc.[10], that it is necessary to prevent the irreparable harm that flows from Datalink carrying on business on the Internet, a business which would be commercially impossible without Google’s facilitation. The order targets Datalink’s websites and prevents them from being displayed where they do the most harm: on Google’s global search results.
Google further challenged this by stating that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction. The court fired back and said they were unable to see freedom of expression issues being engaged in anyway that tips the balance towards Google. They also dismissed the arguments that the injunction was a permanent one and that the length of the injunction by itself does not change its character from a state of temporariness to one of permanence. They said in any case, Google was not prohibited from making an application to have the order varied or vacated.
Legal Significance of the Case
Other than the fact that the giant tech company Google is a party to this case, of particular note is the amount of interveners that were allowed in this case. According to the 2010 Osgoode study, under Chief Justice McLachlin’s regime (2000 – 2008), the Court has allowed an average of 176 interventions per calendar year. The highest average number of interveners allowed during the period was in 2005, with a number of 46 for that year alone.[11] Fast forward to 2017, it’s only August and this case alone has over 30 interveners. Even the landmark case of Canada (AG) v Bedford fell short of this number. This is clearly a matter that potentially has far reaching implications.
Despite the level of interest surrounding this case, perhaps the real risk is the possibility of opening the floodgates of litigation concerning non parties and extraterritorial injunctions. Further, given the borderless nature of the Internet, it follows that a sovereign court’s order which in effect, extends globally, will be criticised as other countries may be minded to do the same; thus enforcing their own jurisprudence with respect to the Internet. The conundrum that was before the Canadian courts was whether there was a cause of action and an attendant remedy available to the plaintiff and if so, what was the most appropriate and effective remedy available to the plaintiff.
By flexing its muscles the Court, in this Intellectual Property infringement case, sought to ensure that Google no longer “facilitated the ongoing irreparable harm experienced by Equutek Ltd.” The Courts took the view that in order to ensure the interlocutory injunction was effective, the order must be applied where Google operates, globally. Notwithstanding that the order can be qualified, i.e. this is a prima facie case of illegal activity, this is effectively one state trying to regulate another; the resultant effect tending in the realm of violations of International comity. Nonetheless, it is a good example of the Court’s being creative in granting a remedy to an aggrieved party. After all, the Court has always played referee when it comes to determining how far is too far and on a balance of probabilities, which interest should be prioritized.
Given that the Supreme Court of Canada’s decision is final and binding, Google has no further recourse in Canada. We wait to see how Canadian Courts will apply this new precedent. It will also be quite interesting to see if, as a result of the many criticisms and the potential broader social and political implications of this judgment, the Supreme Court will be forced to overrule itself.
Commentary
It is submitted that the court ought not to have ventured down this treacherous path. Interlocutory injunctions have always been characterized as being draconian in nature[12] and have also been criticized as being nuclear weapons and having chilling effects[13] on the rights of an ordinary reasonable man. Not only that, this recent decision has now given shape to a monstrous beast that should be chained.
It is my considered view that the decision laid down in the Google case is unsafe and could possibly set a very dangerous precedent, especially with respect to Access to Information. The Court has over-extended itself and now the horse is no longer in the stable having sugar cubes. By deciding in the manner in which they have – the horse has broken the fence and has now been let loose to roam untrodden, dark and dreary meadows.
Which Cowboy State will step up and tame this wild borderless Internet?
Is it even possible for a State to regulate the Internet, which in its strictest sense has no unique location? Google maintains that one country should not have the right to impose its rules on the citizens of other countries. Indeed, what may be deemed illegal in one country may be held to be legal in another and it is because of these dynamics, countries should not be able to have extraterritorial reach. Further, in the same way that newspaper companies can make editorial decisions about what news story to print or what goes on the front page, search engine operators, arguably, should enjoy this same privilege – i.e. determine which of the trillions of web pages on the Internet to display in search results. To compel a search engine provider to remove one of its content would be analogous to compelling the Times Magazine to remove a story from its papers that might offend or even shock the conscience of other governments around the world. Should those countries, then, be able to petition the court to grant extraterritorial orders preventing the Times Magazine. This could go to the heart of an egregious violation of citizens’ inherent rights.
Regulate the Internet?
The matter before the Canadian court was rife with controversy, especially since they ventured into new territory. However, despite the world’s prying eyes on how this matter will progress, this case is not entirely novel. Back in 2002, The French also tried to stretch the bounds of a somewhat analogous order. In Yahoo!, Inc. v. La Ligue Racisme ET, L’antisemitisme, Yahoo! sued the French Association who was granted an order requiring Yahoo to remove entirely or at least block French citizens’ access to Nazi material displayed or offered for sale on Yahoo!’s US websites. The California District Court held that the French order could not be enforced in the US because it would “chill Yahoo!’s First Amendments (Freedom of Expression) rights”. Even though the US Court of Appeal reversed the District Court’s decision (ruling that the French’s order could extend to US soil), the law is still not settled on how to treat with Cyber related issues that transcends geographical borders. This is yet another example of how countries around the world struggle to exercise their laws in Cyberspace. It also demonstrates how the Law tends to play “catch-up” on a number of issues, especially those that touch and concern technology. Perhaps, flowing from the case, the world should seize the opportunity for respective governments to engage in discussions with a view to have uniformed laws to treat with these issues.
Is the Court the right forum to oversee Technological matters that evolve so quickly?
Google advised Equustek that they had already de-indexed 345 specific web pages associated with Datalink. Given that Datalink continued to create new websites, and constantly moved pages to different parts of the website, the Google Order was amended at least seven times in a bid to capture Datalink’s new websites. It is true that one of the considerations for granting injunctions is whether the prohibited act will require supervision. Indeed, the Courts has no business in micromanaging and supervising orders. Equustek would essentially have to seek the court’s assistance every time this happened. This, arguably, is tantamount to the court supervising an order and the Courts have no business with these types of Orders. Moreover, technology changes so rapidly, the Court’s ability to effectively police attendant issues could somewhat be thwarted.
Was this even a sensible course of action?
The Court held that in order to be effective, even within Canada, Google must block search results on all of its websites. They were also of the view that Datalink’s sales originate 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. If it is that the Court’s objective is truly to ensure that searchers from any jurisdiction do not find Datalink’s websites, it is submitted that the utility of the Order is, at best, questionable. The two judges in their dissenting opinions were spot on when they reiterated the fact that Datalink’s websites could still be accessed even without utilizing Google’s Search Engine. Datalink’s website is still accessible, even today, through other search engines, social media, emailed links or just mere word of mouth. Even though Google is the leader in the Search Engine arena, it is essentially a point of reference to websites on the Internet and ordering Google to de-index Datalink’s websites does not adequately address the core matter at hand. This is a complicated issue that goes beyond a mere band aid; it requires some stitches.
Further, one of the pillars of interlocutory injunctions is that there are no alternative remedies available to the claimant. The two dissenting judges noted that Equustek had several options to explore. One of which was to seek relief at the Internet Service Provider (ISP) level. Indeed, in Cartier, the court held that ISPs could block access to trademark-infringing websites because “it is via the ISPs’ services” that customers view and purchase the infringing material. The other option was to bring an application in the French courts to seize Datalink’s alleged assets. If it is that the Court’s goal is to be pragmatic in its decision, this is arguably a more logical step to take. The focus could have been a monetary one and if Equustek attempted to cut off Datalink’s financial supply, they would have effectively debilitated them. This would perhaps have been a more sensible approach rather than petitioning a court to block Datalink’s site in a list of search results. Datalink could essentially create a new domain tomorrow and they are back in business. This is another reason why the final decision failed to adequately address the matter at hand.
Additionally, the Court noted that carrying out the order would not have cost Google a thing, especially given its $498-billion-dollar conglomerate status[14]. However, other businesses including smaller ones may not have the financial fortitude to withstand such an order – especially if the order granted directly touches and concerns small scale services that impact their bottom line.
What next?
Although the Supreme Court judges overstepped, they should be applauded for making this bold step; making an unprecedented decision where Cyberspace is concerned. The courts have been criticised for being too conservative and erring on the side of caution. Now, they have decided on a matter that has been somewhat taboo and the question is What’s next? For far too long the world has been comfortable with the notion that the Internet is “borderless”, but this isn’t enough; more has to be done. Although they pushed the boundaries in this case, it was a necessary evil to not only provide some semblance of equitable relief for Equustek but also to initiate much needed discussions on this notion of the Internet being “borderless”. Governments around the world need to start having discussions at the International level to see if there can be a uniform way to treat with these issues.
Going forward, it will be quite interesting to see how this Google case plays out in the US Courts. In fact, Google has already filed its motion for preliminary injunctive relief in the Northern District Court of California, scheduled to be heard on September 14, 2017.[15] If the judges rule that the Supreme Court of Canada order has no effect on US soil, will the Supreme Court of Canada have to renegade on its recent ruling or will the US court’s decision be seen as an overruling of the Canadian court’s decision? Interesting times ahead. Perhaps now is the time we finally rip the band-aid off and in the true spirit of International comity stitch this wound once and for all.
[1] 2017 SCC 34
[2] 2017 SCC 34
[3] Yahoo! Auction facilitated the buying and selling of items via online auction. Items included up to 1,200 Nazi artifacts. Although the is protected by the 1st Amendments of the US Constitution, The sale of Nazi items violates Article R645-1 of the French Penal Code. See Article R645-1, C. PEN. (for a translation of Article R645-1 of the French Penal Code, see https://www.lapres.net/html/codpen.html
[4] Yahoo!, Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 169 F. Supp. 2d 1181, 2001 U.S. Dist. LEXIS 18378, 30 Media L. Rep. 1001 (N.D. Cal. Nov. 7, 2001)
[5] For example, in Yahoo!’s case, the sale of Nazi items is protected by the First Amendment of the United States Constitution. "Congress shall make no law respecting an establishment or religion, or prohibiting the free exercise thereof, of abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." U.S. CONST. amend. I
[6] [1974] A.C. 133
[7] [2016] EWCA Civ 658
[8] [1994] 1 S.C.R. 311
[9] Mareva Compania Naviera SA v. International Bulkcarriers SA, [1975] 2 Lloyd’s Rep. 509
[10] [2007] 1 S.C.R. 867, at para. 6
[11] Alarie, B., Green, Andrew J. Interventions at the Supreme Court of Canada: Accuracy, Affiliation, and Acceptance. Osgoode Hall Law Journal. Volume 48, Number 3/4. Table 1: Appeals and Interventions, 2000-2008. Pg. 396
[12] Colston, C. Principles of Intellectual Property Law. Cavendish Publishing, September 20, 1999
[13] Master of the Rolls. Report of the Committee on Super-Injunctions: Super-injunctions, Anonymised Injunctions and Open Justice. Accessed: https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/super-injunction-report-20052011.pdf
[14] La Monica, P. Google is worth more than Apple again. Accessed: https://money.cnn.com/2016/05/12/investing/apple-google-alphabet-most-valuable/
[15] Electronic Frontier Foundation. Google's Motion for Preliminary Injunction - Google v. Equustek, N.D. Cal. Accessed: https://www.eff.org/document/googles-motion-preliminary-injunction-google-v-equustek-nd-cal