Blog

Supreme Court upholds worldwide injunction against Google

In Google v. Equustek, the Supreme Court of Canada today upheld a worldwide interlocutory injunction requiring Google to delist certain webpages from its search results.

Background

Equustek is a small BC based company that manufactures networking equipment allowing for industrial equipment from different manufacturers to communicate. At one point in time, Esquutek distributed its products through the Defendant, Datalink. Upon becoming aware that Datalink had begun to re-label and pass off Equustek products as their own and that orders for Equustek’s products were being filled with a competing product, Equustek terminated the distribution agreement and required Datalink to delete all reference to Equustek from its website.

Equustek then obtained an interlocutory injunction requiring Datalink to return any source code and other documentations and to refrain from mentioning Equustek on its website. Datalink abandoned the proceedings and continued to sell its impugned product. Equustek then obtained a Mareva injunction freezing Datalink’s assets, including its inventory. Shortly thereafter, Equustek obtained another interlocutory injunction preventing Datalink from dealing in business documents at the heart of Datalink’s business. Datalink and its principal, Morgan Jack, were later held to be in contempt of court. Throughout this period, Datalink continued to operate its business from some unknown offshore location and to offer the impugned goods for sale through its website.

Injunction against Google

Unable to effectively enforce the injunction against Datalink, Equustek sought an injunction requiring Google, a non-party, to de-index Datalink’s webpages from Google’s search engine so that users would not be able to use Google to find Datalink’s website. Google de-indexed some, but not all of Datalink’s webpages from it Canadian portal, www. google.ca, but users using other Google portals, including www.google.com, could still locate Datalink’s webpages and purchase products form Datalink. Equustek then moved for and successfully obtained a worldwide injunction preventing Google from displaying any part of Datalink’s website in any of its search results. Google’s appeal of this injunction was dismissed by the B.C. Court of Appeal. Google then sought and obtained leave to appeal to the Supreme Court of Canada.

Supreme Court’s Decision

Justice Abella, writing for the majority, reaffirmed that that an interlocutory injunction is an equitable remedy whose granting will always be context specific. The Court rejected Google’s argument that as a non-party it could not be the subject of an injunction, noting that the Court in MacMillian Blodel had issued an injunction preventing “John Doe, Jane Doe and Persons Unknown” from blocking a logging road.

The Court, drawing heavily from analogies to Norwich Orders and Mareva injunctions, held that enjoining non-parties was not inherently problematic. In a Norwich order, a non-party is required to disclose information in its possession that is required by a claimant. A Mareva injunction is designed to prevent a party from becoming judgment-proof by dissipating assets prior to the resolution of a trial. To be effective, where the circumstances require, Mareva injunctions can be issued against non-party banks and other financial institutions.

The Court concluded that a worldwide injunction against Google was necessary in order to prevent Equustek from suffering irreparable harm:

[35] Much like a Norwich order or a Mareva 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.

Although Google was not implicated in any specific wrong doing, the Court held that Datalink’s very survival was dependent on Google search engine directing users to Datalink’s website:

[52] Datalink and its representatives have ignored all previous court orders made against them, have left British Columbia, and continue to operate their business from unknown locations outside Canada. Equustek has made efforts to locate Datalink with limited success. Datalink is only able to survive — at the expense of Equustek’s survival — on Google’s search engine which directs potential customers to its websites. In other words, Google is how Datalink has been able to continue harming Equustek in defiance of several court orders.

The Dissent

Justices Rowe and Côté would have allowed the appeal holding that while a worldwide injunction against a non-party is in principle available, it should not have been issued against Google in this instance. The Dissent held that the injunction was effectively a permanent injunction against an innocent third party that has not been shown to be effective and for which alternative remedies are available.

The Dissent noted that the established tripartite RJR MacDonald test for an interlocutory injunction does not apply where the effect of the injunction is effectively final and the test for a permanent injunction has not been met. Here, notwithstanding Equustek having demonstrated a good prima facie case or arguable case, the merits of Equustek’s claims were not substantively reviewed in the Courts below such that it was unclear if the first element of the test for a permanent injunction had been met.

The Dissent further held that the majority’s reliance on analogies to Norwich Orders and Mareva Injunctions was in appropriate:

[72] We agree with our colleague Justice Abella that Mareva injunctions and Norwich orders can operate against non-parties. However, we respectfully disagree that the Google Order is similar in nature to those remedies. Mareva injunctions are granted to freeze assets until the completion of a trial ― they do not enforce a plaintiff’s substantive rights (Mercedes Benz, at p. 302). In contrast, the Google Order enforces Equustek’s asserted intellectual property rights by seeking to minimize harm to those rights. It does not freeze Datalink’s assets (and, in fact, may erode those assets).

[73] Norwich orders are made to compel information from third parties. In Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133 (H.L.), at p. 175, Lord Reid identified

a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers.

Lord Reid found that “without certain action on [Customs’] part the infringements could never have been committed” (at 174). In spite of this finding, the court did not require Customs to take specific action to prevent importers from infringing the patent of Norwich Pharmacal; rather the court issued a limited order compelling Customs to disclose the names of importers. In Cartier, the court analogized from Norwich to support an injunction requiring Internet service providers (“ISPs”) to block access to trademark-infringing websites because “it is via the ISPs’ services” that customers view and purchase the infringing material (para. 155). That injunction did not extend to parties merely assisting in finding the websites.

The Dissent held that Google, by solely providing search results directing users to Datalink’s websites, did not play a role in Datalink’s breach of the injunction precluding it form conducting any business trough a website. Further, the injunction against Google was not effective in preventing Datalink from breaching the injunction that required Datalink “cease operating or carrying on business through any website.” Datalink had breached the injunction by launching its websites offering the impugned products for sale and this breach was not dependent on whether Google searches ever direct users to Datalink’s websites.

The Dissent also noted that the availability of alternative remedies also suggested that the Google injunction should not have been granted. Since Datalink has assets in France, Equustek could seek injunctive relief, including a Mareva injunction, in that country.

A copy of the Supreme Court’s decision may be found here.