Canadian Appellate Court Orders Google To Block Website Worldwide

“This touches off a troubling jurisdictional tangle,” says David Post, a fellow at the Institute for Information Law and Policy at New York Law School and a former professor at Temple University's Beasley School of Law. “Different countries have different laws, and issuing global injunctions does not make for a sensible international order.”

The seemingly unconventional ruling stems from a conventional ' though non-entertainment ' intellectual property dispute between rival companies. Equustek Solutions, a network equipment manufacturer, alleged that Datalink Technologies was taking Equustek hardware, repackaging it and then distributing it as its own brand. It sued Datalink in Vancouver for trademark infringement and unlawful appropriation of trade secrets.

The lower court agreed with Equustek and ordered Vancouver-based Datalink to stop selling the infringing products on its websites. It also ordered Datalink to publish a notice on its sites redirecting customers to Equustek.

Datalink ignored the injunctions. In fact, it stopped responding to the court and moved its operations. It ran websites from unknown locations and continued to sell the infringing products under different names. It relied on Web search engines to direct customers to its sites. For Equustek, stopping Datalink with court orders became a futile attempt at whack-a-mole.

But Equustek wasn't giving up. If customers were finding Datalink sites via a search engine, it reasoned, why not go after the world's biggest search engine? Equustek asked the court to issue an injunction prohibiting Google from delivering search results pointing to Datalink's websites across the globe.

Google was not a party to the litigation and had not been charged with any wrongdoing in the case. But once dragged into the fight, it voluntarily delisted 345 specific URLs from the google.ca domain that directed users to the infringing products. That search engine is used by approximately 95% of Canada's residents.

But the lower court stated that that wasn't enough. It granted the requested injunction, ordering Google to delist the sites worldwide. This meant that the offending sites would have to be removed not only from google.ca, but also from google.com, google.co.uk, google.fr, google.co.jp and hundreds of other country-specific search engine domains owned by the company.

Not surprisingly, Google appealed. It stated that the injunction went beyond the jurisdiction of the court. It also argued the injunction improperly operated against an innocent nonparty to the litigation and had an impermissible extraterritorial reach. But the Court of Appeal for British Columbia disagreed.

International Claims

“It's a slippery slope,” Post says about the appellate ruling. “Are more countries going to feel empowered to issue worldwide injunctions against Google and other search engines? Will they mandate global online censorship?”

While countries do at times make extraterritorial legal claims, they usually can't enforce them unless the person or company has a presence or assets in that country. Google argued to the court that because it had no physical operations and no employees in British Columbia, it could not be subject to an injunction issued by the province's courts. The judges, however, disagreed, saying that Google gathers data in British Columbia and sells advertising to users and companies in the province.

“The ramifications of this logic are huge,” says Vera Renieri, a staff attorney at the EFF, which submitted a brief as an intervenor on behalf of Google. “Based on the court's reasoning, there is no place on earth that Google would not be subject to a jurisdiction.”

Google also argued that courts cannot exercise authority over its international operations using their domestic laws ' that to do so would lead to restrictive and conflicting orders. “Google raises the specter of it being subjected to restrictive orders from courts in all parts of the world, each concerned with its own domestic law,” Justice Harvey Groberman wrote for the appellate panel. “I agree with the chambers judge that it is the worldwide nature of Google's business and not any defect in the law that gives rise to that possibility.”

The idealized view of cyberspace has not existed for a long time. Countries increasingly demand that search engines remove sites for various reasons. Under the Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860 (1998) in the United States, search engines can be ordered to take down infringing content. In France, Yahoo Inc. was sued for displaying Nazi artifacts on its auction site because displaying Nazi paraphernalia is against French law. Yahoo, which had operations in France that could be shut down if it didn't comply, agreed to ban the sale of Nazi items there.

But legal scholars are seeing what they consider an alarming trend ' that more and more courts across the globe feel emboldened to issue extraterritorial orders. The European Court of Justice, for example, has ruled that search engines such as Google can be forced to take down links in all of Europe if individuals believe they infringe their privacy rights, even if the information is factual and in the public record. More recently, regulators in France have ruled that under the “Right to Be Forgotten” law, Google, upon request, must remove links to certain sites worldwide.

“The idea that courts issue orders with extraterritorial jurisdiction is not new,” says Richard Stobbe, an attorney at Field Law in Calgary, Canada, and the editor of ipblog.ca, a blog that focuses on intellectual property, copyright, trademarks and Internet law in Canada. “But this is a first for Canada, and you have to wonder where it will lead.”

EFF's Renieri believes that when other countries see Canada exercise extraterritorial legal claims, they will follow. “The most restrictive laws will become de facto law,” she says. “It will become a race to the bottom.”

The International Federation of Film Producers Associations (FIAPG) and the International Federation of the Phonographic Industry (IFPI) ' groups that represent the global film and television production and music recording industries ' were intervenors in the British Columbia case. They argued that the order against nonparty Google was legal and correct.

Lisa Shuchman is a Reporter for Corporate Counsel magazine, an ALM sibling of Entertainment Law & Finance.

Almost 20 years ago, John Perry Barlow, the essayist, Grateful Dead lyricist and Electronic Frontier Foundation (EFF) founder, declared that governments had no sovereignty in cyberspace. “Your legal concepts of property, expression, identity, movement and context do not apply to us,” he wrote in his Declaration of Independence of Cyberspace, which went viral when published in 1996. “They are all based on matter, and there is no matter here.”

The courts in the Canadian province of British Columbia beg to differ. A recent ruling by the Court of Appeal for British Columbia affirmed a lower court decision ordering Google Inc. to block certain websites from its search engine ' not just in British Columbia but worldwide. Equustek Solutions Inc. v. Jack, [2015] B.C.A.C. TBEd. JN.039.

The ruling, the first of its kind in Canada and one with international significance for entertainment industry content owners and users, raises questions about the power that courts can wield over the Internet ' a question that is also being raised in other parts of the world. It challenges notions of free speech, extraterritoriality and an open Internet. And it raises the possibility that intellectual property owners will file more lawsuits in British Columbia as it develops a reputation as a venue willing to exercise its authority beyond its provincial borders.

“This touches off a troubling jurisdictional tangle,” says David Post, a fellow at the Institute for Information Law and Policy at New York Law School and a former professor at Temple University's Beasley School of Law. “Different countries have different laws, and issuing global injunctions does not make for a sensible international order.”

The seemingly unconventional ruling stems from a conventional ' though non-entertainment ' intellectual property dispute between rival companies. Equustek Solutions, a network equipment manufacturer, alleged that Datalink Technologies was taking Equustek hardware, repackaging it and then distributing it as its own brand. It sued Datalink in Vancouver for trademark infringement and unlawful appropriation of trade secrets.

The lower court agreed with Equustek and ordered Vancouver-based Datalink to stop selling the infringing products on its websites. It also ordered Datalink to publish a notice on its sites redirecting customers to Equustek.

Datalink ignored the injunctions. In fact, it stopped responding to the court and moved its operations. It ran websites from unknown locations and continued to sell the infringing products under different names. It relied on Web search engines to direct customers to its sites. For Equustek, stopping Datalink with court orders became a futile attempt at whack-a-mole.

But Equustek wasn't giving up. If customers were finding Datalink sites via a search engine, it reasoned, why not go after the world's biggest search engine? Equustek asked the court to issue an injunction prohibiting Google from delivering search results pointing to Datalink's websites across the globe.

Google was not a party to the litigation and had not been charged with any wrongdoing in the case. But once dragged into the fight, it voluntarily delisted 345 specific URLs from the google.ca domain that directed users to the infringing products. That search engine is used by approximately 95% of Canada's residents.

But the lower court stated that that wasn't enough. It granted the requested injunction, ordering Google to delist the sites worldwide. This meant that the offending sites would have to be removed not only from google.ca, but also from google.com, google.co.uk, google.fr, google.co.jp and hundreds of other country-specific search engine domains owned by the company.

Not surprisingly, Google appealed. It stated that the injunction went beyond the jurisdiction of the court. It also argued the injunction improperly operated against an innocent nonparty to the litigation and had an impermissible extraterritorial reach. But the Court of Appeal for British Columbia disagreed.

International Claims

“It's a slippery slope,” Post says about the appellate ruling. “Are more countries going to feel empowered to issue worldwide injunctions against Google and other search engines? Will they mandate global online censorship?”

While countries do at times make extraterritorial legal claims, they usually can't enforce them unless the person or company has a presence or assets in that country. Google argued to the court that because it had no physical operations and no employees in British Columbia, it could not be subject to an injunction issued by the province's courts. The judges, however, disagreed, saying that Google gathers data in British Columbia and sells advertising to users and companies in the province.

“The ramifications of this logic are huge,” says Vera Renieri, a staff attorney at the EFF, which submitted a brief as an intervenor on behalf of Google. “Based on the court's reasoning, there is no place on earth that Google would not be subject to a jurisdiction.”

Google also argued that courts cannot exercise authority over its international operations using their domestic laws ' that to do so would lead to restrictive and conflicting orders. “Google raises the specter of it being subjected to restrictive orders from courts in all parts of the world, each concerned with its own domestic law,” Justice Harvey Groberman wrote for the appellate panel. “I agree with the chambers judge that it is the worldwide nature of Google's business and not any defect in the law that gives rise to that possibility.”

The idealized view of cyberspace has not existed for a long time. Countries increasingly demand that search engines remove sites for various reasons. Under the Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860 (1998) in the United States, search engines can be ordered to take down infringing content. In France, Yahoo Inc. was sued for displaying Nazi artifacts on its auction site because displaying Nazi paraphernalia is against French law. Yahoo, which had operations in France that could be shut down if it didn't comply, agreed to ban the sale of Nazi items there.

But legal scholars are seeing what they consider an alarming trend ' that more and more courts across the globe feel emboldened to issue extraterritorial orders. The European Court of Justice, for example, has ruled that search engines such as Google can be forced to take down links in all of Europe if individuals believe they infringe their privacy rights, even if the information is factual and in the public record. More recently, regulators in France have ruled that under the “Right to Be Forgotten” law, Google, upon request, must remove links to certain sites worldwide.

“The idea that courts issue orders with extraterritorial jurisdiction is not new,” says Richard Stobbe, an attorney at Field Law in Calgary, Canada, and the editor of ipblog.ca, a blog that focuses on intellectual property, copyright, trademarks and Internet law in Canada. “But this is a first for Canada, and you have to wonder where it will lead.”

EFF's Renieri believes that when other countries see Canada exercise extraterritorial legal claims, they will follow. “The most restrictive laws will become de facto law,” she says. “It will become a race to the bottom.”

The International Federation of Film Producers Associations (FIAPG) and the International Federation of the Phonographic Industry (IFPI) ' groups that represent the global film and television production and music recording industries ' were intervenors in the British Columbia case. They argued that the order against nonparty Google was legal and correct.

Lisa Shuchman is a Reporter for Corporate Counsel magazine, an ALM sibling of Entertainment Law & Finance.