Google v. Equustek; Jurisdiction over the global internet
In Google v. Equustek 2017 SCC 34, the Supreme Court of Canada upheld an order directing Google to block certain websites so that they did not appear on any Google search results anywhere in the world.
The case attracted a wide range of international intervenors, including the global film and music industry associations, the Associated Press, Human Rights Watch, and Wikimedia. As matters stand now, it appears to be the leading decision in the world on taking down global internet content.
Background
The plaintiffs are a small engineering technology business in British Columbia. They design and manufacture networking devices that allow complex industrial equipment, made by one manufacturer, to communicate with complex industrial equipment made by another manufacturer. For example, a brewery might buy one of the plaintiffs’ devices to get its bottling line to “talk” to its packaging machinery.
When the plaintiffs discovered that their distributor was selling what appeared to be a copycat product, they terminated the relationship and sued, claiming that the copycat product was made with stolen trade secrets. The plaintiffs also claimed that the product was marketed by unfair use of the plaintiff’s common law trademarks, and that the defendant’s product manuals violated the plaintiff’s copyright in its manuals.
The plaintiffs obtained multiple court orders directing the distributor to stop selling the impugned product, but the distributor fled the jurisdiction and continued selling on the internet, from an unknown location. The court struck out the distributor’s defence and issued a warrant for the distributor’s arrest but the plaintiff could not locate the distributor and there appeared to be nothing further the plaintiffs could do to make the distributor stop selling.[1]
The plaintiffs asked Google to help, reasoning that no online business can survive if it can’t be found on Google. The plaintiffs put Google on notice of the existing court orders, pointed out that Google was facilitating the distributor’s flouting of those orders by displaying the listed websites on its search results, and asked Google to stop. Google refused, so the plaintiffs named Google Inc. (in California) as a non-party respondent to a motion in the existing litigation.
The British Columbia Supreme Court ordered Google to stop displaying the distributor’s websites on any of Google’s search results, anywhere in the world. Madam Justice Fenlon wrote (2014 BCSC 1063):
I conclude that the Court has authority to grant an injunction against a non-party resident in a foreign jurisdiction in appropriate circumstances. The fact that an injunction has not before been made against an internet search provider such as Google is reason to tread carefully, but does not establish that the Court does not have subject matter competence. Indeed, the notion that a court may only make the orders it has made in the past is anathema to the spirit of the common law. As Newbury J. observed in Mooney No. 1 at para. 11:
… the courts must, in order to preserve the effectiveness of their judgments, adapt to new circumstances. Such adaptability has always been, and continues to be, the genius of the common law.
… The Court must adapt to the reality of e-commerce with its potential for abuse by those who would take the property of others and sell it through the borderless electronic web of the internet. I conclude that an interim injunction should be granted compelling Google to block the defendants’ websites from Google’s search results worldwide. That order is necessary to preserve the Court’s process and to ensure that the defendants cannot continue to flout the Court’s orders.[2]
The British Columbia Court of Appeal (2015 BCCA 265) and the Supreme Court of Canada (2017 SCC 34) both dismissed Google’s appeal.
This should have been the end of the story, but three weeks after losing in the Supreme Court of Canada, Google sued the plaintiffs in US Federal Court in California, seeking “a declaratory judgment that the [British Columbia order] cannot be enforced in the United States and an order enjoining that enforcement.”[3]
The plaintiffs did not respond to the US proceeding. They never intended to seek the assistance of US courts to enforce the BC court order against Google.[4] Further, the plaintiffs took the view that they were not subject to the jurisdiction of the US court. Google’s application was therefore unopposed. Google obtained the orders it sought and returned to British Columbia to ask the first instance court to vary its order, out of respect for the American decision.
The British Columbia court dismissed Google’s application (2018 BCSC 610). Mr. Justice Smith wrote:
The U.S. decision does not establish that the injunction requires Google to violate American law. That would be the case if, for example, the [distributor] obtained an order from a U.S. court requiring Google to link to their websites. But there is no suggestion that any U.S. law prohibits Google from de-indexing those websites, either in compliance with the injunction or for any other reason. Absent the injunction, Google would be free to choose whether to list those websites and the injunction restricts that choice, but injunctions frequently restrain conduct that would otherwise be prima facie lawful. A party being restricted in its ability to exercise certain rights is not the same thing as that party being required to violate the law. I interpret the words of Abella J. as being primarily limited to the latter situation.
…
The effect of the U.S. order is that no action can be taken against Google to enforce the injunction in U.S. courts. That does not restrict the ability of this Court to protect the integrity of its own process through orders directed to parties over whom it has personal jurisdiction.
The result is that Google continues to be obliged to comply with the British Columbia Supreme Court order that it not display the distributor’s websites on its search results, anywhere in the world.
Analytical steps
Canadian courts followed the following logical steps to determine that the order against Google could be made:
- While Google Inc. was not physically in British Columbia, it was subject to the jurisdiction of British Columbia courts because of its extensive contacts with the Province. Among other points, Google Inc. contracts directly with BC-resident clients so those clients can in turn advertise their products to other BC residents.
- No one with notice of a court order is permitted to flout it or facilitate its breach, whether they are a party to the underlying litigation or not.
- The court has the power to issue orders to uphold the integrity of its own process, including existing court orders.
- By displaying the distributor’s websites on its search results, Google was facilitating the distributor’s flouting of court orders and denying the plaintiffs the benefit of those orders.
- Google has the ability to take any website off its search results, which it does regularly for its own reasons, without cost or inconvenience.
- The list of impugned websites was approved by the court – Google was only required to act on that list, not police the internet.
Having determined that the court could grant the orders sought, the judgments in Google v. Equustek raised a host of fascinating issues, not all of which were addressed directly. And some of what comes out of the case appears to have wide potential application.
Universal jurisdiction over Google
Google structured its business so that Google Inc., not Google’s local Canadian subsidiary, contracts directly with local advertising customers. If this is true elsewhere, it seems likely that Google Inc. – the search engine provider – is subject to the jurisdiction of courts in many other countries as well.
In fact, Google complained that this analysis implied a universal jurisdiction over Google in courts all over the world, but Fenlon J. rejected their complaint, reasoning that any universal jurisdiction arises from Google’s business model, not a defect in the law (2014 BSSC 1063 at para 63).
Injunctions against non-parties
Courts have the power to issue injunctions against non-parties.[5] This should not have been controversial. There is a well-established of authority in Canada related to injunctions to restrain non-party logging protestors (MacMillan Bloedel v. Simpson [1996] 2 SCR 1048), and Canadian Mareva injunctions regularly require compliance by non-party banks. Norwich Pharmacal provides a modern example of the development of this power.
A closely related point is that no cause of action against the non-party is required to found such an injunction. This seems counter-intuitive to lawyers raised in the tradition of American Cyanamid, but the Canadian courts accepted the Norwich Pharmacal formulation that a non-party who is “mixed up in” the dispute can be subject of an injunction; the fundamental question is whether it is “just and equitable” for the injunction to issue.
All three levels of court referred to the decision in Cartier International v. British Sky Broadcasting, where Arnold J. also concluded that the court can issue the injunction on the basis of the “just and convenient” jurisdiction in s. 37(1) of the UK Senior Courts Act 1981.[6] This appears identical to the jurisdiction of Canadian courts, as in BC’s Law and Equity Act.[7]
Jurisdiction over the internet
The finding of jurisdiction over Google was based on a factual record that the plaintiffs spent considerable effort to develop, in the face of some difficulty. The challenge was created in part by Google’s caution in disclosing meaningful information about its business model. For example, Google never disclosed where the servers operating its search engine were located, where the decisions were made to blacklist websites off search results, or where those decisions were put into effect.
This mattered because the case was somewhat bedevilled by a ‘meme’ that the internet is everywhere and nowhere, as if it were a separate place, and should therefore be beyond the reach of any courts. This was obvious nonsense, but it permeated much of the submissions, particularly by some of the intervenors.
The internet is not a separate place. It is a collection of users, computers, and servers which are connected to each other by various infrastructure, most of which is provided by telcos. Each of these elements is physically located in a place, and identifying those places should be useful in determining whether a local court has jurisdiction over any particular dispute.
Rule of law on the internet
The internet, of course, is ubiquitous, but this was not a case about pirated content or counterfeit handbags. It still seems remarkable that the distributor in this case could sell a sophisticated engineering technology product, to sophisticated companies, from an unknown location outside the stream of ordinary commerce.
If the distributor could carry on business this way, what other unscrupulous businesses might be able to do the same?
The lesson here is that courts must have meaningful remedies in relation to internet content. The internet cannot be lawless zone, or the rule of law is in serious jeopardy.
In the ordinary course, once a local court takes jurisdiction over an international dispute, we would expect that court to take jurisdiction over all aspect of that dispute. Google argued that the internet should be treated differently – that in order to obtain relief in relation to internet content, the plaintiffs should have to sue in every relevant country in the world. In response, the plaintiffs claimed that such a rule would render meaningful relief beyond the reach of any but the most powerful litigants, and as such would jeopardize the court’s authority and the rule of law.
The Supreme Court of Canada rejected Google’s arguments:
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 [the distributor’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….
The interlocutory injunction in this case is necessary to prevent the irreparable harm that flows from [the distributor] carrying on business on the Internet, a business which would be commercially impossible without Google’s facilitation. The order targets [the distributor’s] websites — the list of which has been updated as [the distributor] has sought to thwart the injunction — and prevents them from being displayed where they do the most harm: on Google’s global search results.
…
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”.
…
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.
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.
Comity and freedom of expression
This sets up what became the central tension in the case – whether an order in relation to global internet content offends the principle of comity, in particular because of different ideas about expression.
Resolving this question was complicated by another meme that bedevilled the case – the idea that any attempt to control the internet must always be a restriction on freedom expression. Some interveners even went so far as to argue that all internet content was worthy of constitutional protection.
All three levels of court in Canada rejected this idea. Abella J. in Supreme Court of Canada noted, somewhat dryly, that:
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.
The internet is commonly described as “borderless” but all this really means is that it can be instantaneously accessed from anywhere. Whether this ubiquity strains the theory underpinning normal private international law rules on jurisdiction is an open question that none of the courts attempted to answer in Google v. Equustek.
The courts’ caution is understandable. The question did not have to be addressed because most of the plaintiffs’ claim was based on common law intellectual property rights that are consistent with widely held international standards:
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 recognize intellectual property rights and view the selling of pirated products as a legal wrong.[8]
Other cases will not be so easy – internet defamation, or the right to be forgotten, on which there is not a similar international consensus. In fact, the Supreme Court of Canada struggled with an internet defamation case only a year after Google v. Equustek. In Haaretz v. Goldhar 2018 SCC 28, the plaintiff brought a defamation claim in Ontario against an Israeli newspaper that was not published in Canada but was read online. Ontario courts upheld the plaintiff’s right to sue the newspaper in Ontario, but the Supreme Court of Canada ruled that Ontario courts should have found Israel as the forum conveniens. While the result is understandable, the court split into five factions and no clear guidance emerges from the decisions
Race to the bottom?
Google and some of the intervenors also argued that Canadian courts making global orders in relation to internet content would lead to other, perhaps less ‘civilized’ courts making more objectionable orders, on topics that are the legitimate matters of expression.
This was clever rhetoric but really just amounted to saying that Google should not be subject to the rule of law in Canada lest it be subject to the rule of law in other countries where it carries on business. Where Google carries on business is a matter for Google to decide, but like any other multinational it must comply with local laws and subject itself to the jurisdiction of local courts in the markets where it operates. If a local court makes an order Google does not like, Google must make the same choice that any other business would face – comply or abandon that market.
In any event, the Canadian courts did not give credence to Google’s “race to the bottom” submissions.
Robbie Fleming[9]
Robert Fleming Lawyers, Vancouver
[1] There are a number of other defendants, including former employees of the plaintiffs, who have not defaulted and continue to defend the case. This meant that the plaintiffs were not able to bring their claim against the distributor to a final judgment before seeking the order against Google.
[2] 2014 BCSC 1063 paras 133 and 159
[3] Order Granting Google’s Motion for Preliminary Injunctive Relief, November 2, 2017, in US District Court for the Northern District of California (San Jose), Case 5:17-cv-04207-EJD, at page 2, lines 25ff
[4] The plaintiffs disavowed this possibility during the hearing at the Supreme Court of Canada.
[5] 2017 SCC 34, paras 28 – 35
[6] Cartier International v. British Sky Broadcasting [2014] EWHC 3354 (Ch) per Arnold J. at paras 92 – 111, aff’d [2016] EWCA Civ. 658
[7] 2015 BCCA 265 at para 74
[8] Per Fenlon J (2014 BCSC 1063) at para 144. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) Article 39 requires signatories to provide “the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices”.
[9] Mr. Fleming was counsel for Equustek throughout.