GOOGLE INC. v. EQUUSTEK & THE SUPREME COURT OF CANADA
In the case of Google Inc. v. Equustek, the Supreme Court of Canada has upheld the grant of a preliminary injunction by the Court of Appeals of British Columbia ordering Google to de-index on a global basis websites of a party accused of passing off the plaintiff’s goods and misusing its trade secrets.
The question of the liability of intermediaries for trademark infringements by others using their facilities is becoming an issue of increasing concern. See for example, our article: https://ladasparry.wpengine.com/education-center/4694-2/ on the situation in Europe. In the present case, Equustek, a small Canadian technology company, had brought suit in British Columbia against its former distributor (Datalink) for passing off and misuse of its trade secrets. Datalink had initially contested the action but subsequently left British Columbia for an unknown destination, while continuing to maintain web pages that were indexed by Google. The British Columbia courts had issued an injunction against Datalink ordering it to cease operating or carrying on business through any website. Following this and a request by Equustek, Google had de-indexed some but not all of Datalink’s webpages so that they would not be found if they were being searched for on Google’s Canadian site, google.ca. However, they could still be found by a search for example on google.com or other country-specific Google search sites. These measures had proved ineffective to stop Datalink’s activities.
Equustek then sought an interlocutory (preliminary) injunction to enjoin Google from displaying any part of Datalink’s websites on any of its search results worldwide.
Agreeing with the lower courts, in a 7-2 decision delivered by Justice Abella on June 28, 2017, the Supreme Court of Canada upheld the grant of an injunction.
The Court noted that, under Canadian law, the grant of an interlocutory injunction was an equitable remedy requiring:
- that the party seeking the injunction had to show that there was a serious issue to be tried;
- that the party seeking the injunction would suffer irreparable harm if the injunction were not granted; and
- that the balance of convenience favored the grant of the injunction.
There was no dispute on the first or second issues, Google accepting that there was a serious issue to be tried and that Equustrek was suffering irreparable harm as a result of Datalink’s continuing sales. Google did, however, argue that the balance of convenience motivated against the grant of the injunction requested. Google’s arguments were three-fold:
- that it was immune from an injunction since it was not a party to the main dispute;
- that the injunction was improperly extraterritorial; and
- that the injunction would be a violation of the right to freedom of expression and Google’s commitment to content neutrality.
On the question of whether a non-party to the underlying law suit could be subject to an injunction, the Canadian Supreme Court referred to numerous Canadian and English decisions, including the English Cartier case (noted above in our previous article) where the courts held that injunctions could be issued against parties who were not themselves guilty of wrongdoing but who were facilitating harm. This was just such a situation. Google was aware that by failing to de-index all of Datalink’s web-sites, it was facilitating Datalink’s ongoing breach of the British Columbia courts’ orders against Datalink.
The court noted:
- The interlocutory injunction in this case flows from the necessity of Google’s assistance in order to prevent facilitation of Datalink’s ability to defy court orders and do irreparable harm to Equustek. Without injunctive relief it was clear that Google would continue to facilitate ongoing harm.
On the question of extraterritoriality, Justice Abella noted that since the Internet has no borders, the only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates – globally. Google had argued that such an order violates international comity, but had provided no evidence that compliance with the injunction would breach the laws of any country. If such evidence came to light, Google could apply to the courts for variation of the injunction to enable it to comply with such foreign law.
On the question of freedom of expression, the Court noted: “We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.” and “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.”
Google would have no difficulty in complying with the injunction and so the balance of convenience lay against it.
Justice Abella concluded:
- On balance, therefore, since the interlocutory injunction is the only effective way to mitigate harm to Equustek pending resolution of the underlying litigation, the only way, in fact, to preserve Equustek itself … and since any countervailing harm to Google is minimal to non-existent, the interlocutory injunction should be upheld.
Justices Côe and Rowe dissented largely on the basis that the injunction went beyond what was needed in the situation. From their perspective, the injunction should only have required Google to provide more information to Equustek but it should not have effectively acted as a final disposition of the case without satisfying the requirements for the grant of a permanent injunction, including full consideration of the merits. The dissenters were also concerned that the injunction might not be effective for its stated purpose and that an alternative course of action was available by proceedings in France where Datalink was known to have assets.