Litigation & Dispute Resolution
On June 13, 2014, the British Columbia Supreme Court ordered Google Inc. to remove all of a company’s websites from its search results. Equustek Solutions Inc. v. Jack (Equustek) marks the first time a Canadian court has ever made such an order, which resulted in an injunction against a non-party that will have global ramifications. The case follows in the footsteps of European decisions, also involving Google, where courts have been asked to assume jurisdiction over Google’s search services and order the removal of impermissible results.
The plaintiffs in Equustek manufactured computer networking devices. They claimed that the defendants in the main action stole trade secrets while working for the plaintiffs and used these trade secrets to develop and sell their own products online. The defendants had flagrantly disobeyed various court orders since the commencement of the main action, including an order prohibiting them from carrying on business online.
Google was not a party to the main action. Insofar as the defendants’ websites were listed on Google’s search engine, however, Google was facilitating the defendants’ ongoing breach of the court’s orders. Google had previously complied with the plaintiffs’ request to remove specific links to the defendants’ websites from Google.ca, but was unwilling to block all of the defendants’ websites from coming up in any search, conducted on any Google website, from any location.
The plaintiffs sought an interim injunction against Google preventing them from including the defendants’ websites in search results. Google opposed the order on the grounds that the court did not have jurisdiction to grant the order because Google is not a B.C. entity and the injunction sought did not relate to Google doing or refraining from doing anything in either British Columbia or Canada.
The B.C. Supreme Court first had to assess whether it had territorial competence over Google, a worldwide search provider. After analyzing the applicable provisions in the Court Jurisdiction and Proceedings Transfer Act, the court found that it did have the jurisdiction to grant the injunction. One important factor the court looked at to determine its territorial competence was whether Google was “carrying on business in the province.” Although Google is incorporated in Delaware and operates out of California, it sells advertising to B.C. clients. Google attempted to argue that its advertising and search services were distinct; however, the court found that these services are inextricably linked, since Google’s search engine provides the forum for the ads and Google’s ad revenue pays for its search engine.
Once the court determined that it had jurisdiction to grant the order sought, it had to determine whether it should, in fact, exercise that jurisdiction. Google asserted that the court could not grant the injunction because Google was a non-party and the order would have a worldwide effect. All parties agreed that a Canadian court had never made such an order.
Equustek mentions previous actions against Google commenced in other jurisdictions: Google Spain SL and Google Inc. v. Agencia Española de Protección de Datos (AEPD) and Mario Costeja González and Max Mosely v. Google France SARL and Google Inc. In the former case, Google was asked to remove an individual’s personal information from its search results. In the latter case, Google was asked to stop indexing photographs in its search results. Courts around the world therefore seem increasingly willing to assume jurisdiction in these Internet disputes and grant orders that will have a global impact.
In examining its ability to grant an equitable order against a non-party, the B.C. Supreme Court looked to the development of the Mareva injunction. A Mareva injunction is an order intended to prevent someone from removing assets from the court’s reach, either by transferring them out of the relevant jurisdiction or destroying them. Mareva injunctions have expanded to include non-parties in order to have practical effect.
Once satisfied that it could grant an injunction against a foreign non-party in appropriate circumstances, the court had to decide whether such an order should be granted in this case. In addition, due to the novelty of an order with worldwide effect, the court had to determine the appropriate test to use to make its decision.
The court decided that the appropriate test to use in deciding to grant an injunction against a non-party is the standard test for granting an injunction. First, the party seeking the order has the threshold responsibility of establishing a good arguable case. Once this has been established, the court must balance the interests of the party seeking the order and the party against whom the order is sought to reach a just and convenient result.
The court found that both aspects of the test weighed in favour of granting the injunction. The plaintiffs had to establish a good arguable case against the defendants, not Google, since that was the main action in relation to which the order was sought. The plaintiffs had presented overwhelming evidence establishing their claims against the defendants, and two of the defendants were presumed to have admitted the allegations. In balancing the interests of the plaintiffs and Google, the court noted that the plaintiffs had suffered irreparable harm from the defendants’ conduct and that Google was inadvertently facilitating that harm through its search engine. Google, on the other hand, did not argue that it would be inconvenienced to a large degree or incur exorbitant expense by complying with the proposed injunction.
The court therefore granted the injunction requiring Google to block the defendants’ websites from all Google search results worldwide.
The court’s finding that it had territorial competence to grant an order against Google, a worldwide search provider situated in the United States, has wide-ranging implications for Canadian courts. As Google pointed out in its submissions, any court could find that it has jurisdiction over Google’s search services on the basis of the court’s analysis in this case, because Google advertises in almost every jurisdiction in the world. The court noted, however, that this is a reflection of Google’s global reach, rather than a flaw in the jurisdictional analysis. In other words, if you conduct global business you must be prepared to appear before courts around the world in appropriate circumstances. Obviously, the case has significant implications for Google itself and it should be noted that the case is subject to a potential appeal to the British Columbia Court of Appeal.
For further information, please contact:
Joe McArthur   604-631-3383
or any other member of our Litigation & Dispute Resolution group.
Tags: Information Technology, Litigation & Dispute Resolution

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