Equustek Solutions v. Google Inc., a case that originated in British Columbia, Canada, in 2014, captured international attention as one of the first internet jurisdiction cases to be considered by a nation’s highest court. Since then, the case has emerged as a cautionary tale about increasingly aggressive legal approaches with respect to the Internet, with significant implications for online governance.

Equustek Solutions was a small BC-based developer of networking devices that enabled industrial equipment manufactured by different companies to communicate. In 2011, the company filed a lawsuit against a former distributor, who, it claimed, had used its trade secrets to create a competing product that was marketed and sold through multiple websites. After several court orders failed to stem the activity, Equustek then asked the BC courts to require Google to remove search results referencing the offending website.

Equustek’s legal battle against Google ultimately wound its way to the Supreme Court of Canada, where, in the summer of 2017, Canada’s highest court decided an internet jurisdiction case that has attracted global attention. Equustek Solutions v. Google Inc. was characterized as a classic David versus Goliath legal battle, pitting a small Canadian company concerned with misuse of its intellectual property (IP) against the world’s leading internet search engine. The case raised an important question: can a single national court dictate the content of search results for internet users worldwide? If so, could this effectively create new internet takedown order — an “Equustek order” — which could be used to remove global content.

Equustek Solutions v. Google Inc. was characterized as a classic David versus Goliath legal battle, pitting a small Canadian company concerned with misuse of its intellectual property (IP) against the world’s leading internet search engine.

While critics of global takedown orders warned that upholding the validity of the order would invite global uncertainty through inevitable legal conflicts and further empower large internet intermediaries who could selectively choose which laws and orders to follow, the aftermath of the decision has placed the spotlight on an additional consequence. In part due to the Equustek doctrine, Canadian courts now more aggressively assert jurisdiction over online activities. Indeed, Canada could emerge as ground zero for internet litigation, with its courts and tribunals at ease with a principle that extends domestic law to an international arena.

Internet Jurisdiction Hits Canada's Highest Court

The Equustek case began in 2014 with its claims that another company used its trade secrets and misleading tactics to create and sell a competing product.

After struggling to get the offending company’s website taken offline, Equustek obtained a BC court order requiring Google to remove the site from its search index. Google voluntarily removed search results for the site from Google.ca search results, a micro-site aimed at the Canadian market, but was unwilling to block the websites from its worldwide index. The BC court affirmed that the order applied on an international basis, however, issuing what amounted to a global takedown order.

In assessing the impact of the internet, the court concluded that the global reach was a reason to issue a broad-based injunction, not a reason to shy away from one. It noted that courts “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.”

On appeal, the BC Court of Appeal concluded that orders with extraterritorial effect are not unusual. The relevant issue is whether the domestic court has territorial competence to adjudicate disputes of those people in foreign jurisdictions outside the borders of British Columbia. While acknowledging the controversial nature of such orders in an internet context — “I do not suggest that these rulings have been without controversy or problems the judge maintained that “extensive case law does indicate, however, that international courts do not see these sorts of orders as being unnecessarily intrusive or contrary to the interests of comity.” The court therefore upheld the initial global takedown order, but emphasized the ability to vary it, should circumstances warrant.

How the Supreme Court of Canada Interpreted Equustek

With two BC courts having affirmed the validity of a global takedown order, Google then took the case to the Supreme Court of Canada. The court upheld the validity of an injunction requiring Google to remove search results on an international basis. The 7–2 decision was content to limit its reasoning to the need to address the harm being sustained by a Canadian company, the limited harm or burden to Google and the ease with which potential conflicts could be addressed by adjusting the global takedown order. In doing so, it arguably invited more global takedowns, without requiring those seeking takedowns to identify potential conflicts or assess the implications in other countries.

The court framed the decision as one that involved de-indexing the infringer’s website to prevent the unlawful infringement of Equustek’s IP. This was necessary as the infringer was in breach of several court orders. Characterized that way, the outcome to uphold the order was no surprise. As the dissent noted, this was likely a permanent order, not a temporary one. Further, “selling the IP of another company” is an odd way of referencing the sale of competing products that used trade secrets.

VIDEO: Michael Geist on the Impact of Copyright and Fair Use on Innovation

The key aspect of the ruling, written for the majority by Justice Rosalie Abella, came with the discussion of the implications for the internet. The decision acknowledged the challenge of a global internet order; however, the court concluded that any remedial measure short of an international takedown would not prevent the infringer from carrying out business on the internet.

The majority was not persuaded by concerns about potential legal conflicts of a global takedown order, characterizing them as “theoretical” and indicating that it would be unfair to place the onus on Equustek to determine whether the order would be legally permissible in the other countries: “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.”

The majority also noted that Google already removes links to certain content such as hate speech, child pornography and copyright takedowns, highlighting the cumulative effect of court decisions and regulations that, individually, may seem reasonable but quickly move toward takedowns of all kinds. In fact, the majority cited the international support for internet injunctions with global effect as a justification for its own order. The net result is the expectation of all countries and courts that they may issue global takedown orders, regardless of the impact on internet users outside the jurisdiction or on internet intermediaries.

After Equustek: The Risks of Global Takedown Orders from National Courts

The Equustek decision was greeted with elation from rights holders such as the music and movie industry, which envisioned the possibility of using Canadian court orders to mandate the removal of search results on a global basis. Yet, despite claims that the case would effectively require internet intermediaries to adopt an affirmative duty to take steps to prevent the Internet from becoming a black market,” the reality is that the Supreme Court expressly rejected any monitoring requirement or the attribution of liability based merely on facilitating access to unlawful or infringing content.

The decision may have stopped short of creating a new liability framework, but it did open the door to three internet-related legal risks that strike at the heart of global internet governance: protracted litigation; increased power for internet intermediaries; and expansion of the Equustek approach to a broad range of legal disciplines.

Protracted litigation: The most obvious consequence of the Supreme Court’s approach in Equustek was the likelihood of it sparking protracted cross-border litigation, with the further possibility of competing court orders from different jurisdictions. Indeed, in the aftermath of the decision, Google filed suit in US court, seeking to block its application there. With no party contesting Google’s arguments, a US court concluded that the Canadian order “threatens free speech on the global internet.” Of particular concern to the court was the effect on statutory immunities granted to internet intermediaries through the Communications Decency Act (CDA). The court ruled that the CDA protections, which largely immunize internet intermediaries from liability for the content or postings of third parties, would be lost as a result of the Canadian court order.

Armed with the US court order, Google returned to the BC courts, seeking a ruling that would vary the scope of the initial order that was upheld by the Supreme Court of Canada. The BC Supreme Court denied Google’s request to vary the injunction, distinguishing between an order inconsistent with the safe harbour protections and a violation of the First Amendment  concluding that “the U.S. decision does not establish that the injunction requires Google to violate American law.” Rather, the order prevented any injunctive action against Google to be enforced in US courts. As of February 2019, the case is still working its way through the courts.

Increasing power of internet intermediaries: The Supreme Court’s Equustek ruling may also have inadvertently vested increased power in the hands of internet intermediaries, who could leverage the legal uncertainty and conflict to self-select which laws would govern their activities. The Supreme Court was influenced by the perceived imbalance of power in the Equustek case, which pitted a global internet giant against a small Canadian company. While that imbalance was persuasive in shifting the onus to Google to identify potential legal conflicts, it also entrenched the company (and others like it, such as Facebook or Twitter) as the party responsible for sorting through — and deciding how to address — legal and compliance conflicts.

The growing comfort with laying responsibility for addressing conflicting laws and regulations at the feet of internet intermediaries carries considerable risk. For example, decisions (including decisions about whether to abide by law or private interest) would effectively be left to private companies — such as Google. While Google was content to abide by the Canadian court order while simultaneously working to marshal evidence that it conflicted with US law, it has been less open to complying with other foreign laws or rulings that are more obviously at odds with US constitutional free speech norms, leading to content being taken down in some jurisdictions but remaining online in others. The net effect is that since local content laws differ from country to country, there is a great likelihood of conflicts. That leaves two possible problematic outcomes: local courts deciding what others can access online, or companies such as Google selectively determining which rules they wish to follow. In fact, Canada runs the risk of finding its rules potentially ignored by large intermediaries. For example, in 2018, Google acknowledged that it had not implemented Canadian-specific rules designed to safeguard non-commercial user-generated content on its YouTube platform, relying instead on US fair use laws.  

Expansion of Equustek: With the benefit of hindsight, it is now apparent that the Equustek ruling facilitated an expanded national approach to global internet governance issues, with the likelihood of Canadian courts relying on the decision to expand the applicability of domestic law beyond Canada’s borders. For example, A.T. v. Globe24h.com involved the application of “right to be forgotten”-style remedies under Canadian privacy law. Globe24h.com was a Romanian website that republished Canadian court and tribunal records and made personal, financial and medical information about parties that appeared in decisions easily accessible via popular search engines.

The same court and tribunal records were also available on Canadian legal websites such as the Canadian Legal Information Institute (CanLII). In fact, it is believed that Globe24h.com downloaded the records from CanLII. However, unlike CanLII, Globe24h.com permitted the records to be indexed by third-party search engines such as Google. Since records on Globe24h.com were indexed by search engines, those containing personal information such as names would generally appear in relevant search results. When affected individuals discovered the records, many asked Globe24h.com to remove personal information from its website.

Even though the court was aware that the ruling applied Canadian privacy law to a foreign-based website, it concluded it was entitled to issue the order, citing the Equustek precedent.

Globe24h.com’s practices were challenged by an applicant who discovered in June 2014 that an Alberta Labour Board decision concerning his case had been republished through Globe24h.com. The federal court ordered Globe24h.com to remove Canadian decisions containing personal information from its website, to take steps to remove decisions from search engines caches, to refrain from further republishing of such decisions and to pay the applicant $5,000 in damages and $300 in costs.

Even though the court was aware that the ruling applied Canadian privacy law to a foreign-based website, it concluded it was entitled to issue the order, citing the Equustek precedent.

The relevance of effective orders was similarly echoed in College of Optometrists of Ontario et al v. Essilor Group Canada Inc., a 2018 Ontario lower court decision. The case involved the Canadian branch of a French company operating out of British Columbia that sold prescription eyeglasses and contact lenses online. At issue was whether Ontario’s regulatory scheme should be applied to a company without a physical presence within the province but that sold products to consumers. Again, the court cited Equustek, noting, “The intention was that the order be effective in Canada. Given the nature of the internet this could only be accomplished by extending the injunction around the world.”

The Equustek doctrine has also been extended to administrative and criminal law matters. In 2017, the Quebec Financial Markets Administrative Tribunal was faced with the question of whether several companies were operating in the province without the necessary authorizations by virtue of the existence of corporate websites and a presence on the social media giant Facebook. The tribunal acknowledged the difference between the Equustek case and its administrative hearing, but concluded that it could issue an order requiring Facebook Canada to shut down certain corporate accounts so as to “stop harm and conduct contrary to the Act.”

British Columbia (Attorney General) v. Brecknell provides an illustration of the Equustek analysis permeating criminal law. The court was faced with the question of whether it could compel a non-resident internet company with only a virtual presence to produce documents to law enforcement regarding a criminal matter. Craigslist, a popular online classified ads site, was asked to provide a user’s name, address, Internet Protocol address, phone number and all relevant information associated with a post. The company was willing to respond to production requests sent by email, but without a physical presence, no valid service could be established.

The attorney general of BC cited the Equustek case for the proposition that Canadian courts had “in personam jurisdiction over Craigslist because, by conducting business in BC, it has a real and substantial connection to the province.” The BC Court of Appeal issued the order, drawing on the court’s willingness in Equustek to adapt the rules to reflect the jurisdictional challenges of the internet.

With respect to the challenges of enforcing a global order, the court took comfort from Equustek, noting that “problems of enforceability may often need to be considered when courts make discretionary decisions, since that issue is relevant to the exercise of its discretion. Those difficulties do not, however, deprive the court of jurisdiction to make the order.”

In other words, Canadian courts are increasingly comfortable issuing orders involving internet platforms that may be difficult to enforce, given the global dimensions of the network, and adopting an approach where challenges associated with enforceability are not treated as a legal barrier. While some may applaud that approach, the proliferation of largely unenforceable court orders may ultimately undermine respect for the application of law online.

Conclusion

The internet is often characterized as a “Wild West” where laws cannot be easily applied. Yet, the danger of extraterritorial application of court decisions — such as those involving Google — is that it encourages disregard for the rule of law online, placing internet companies in the unenviable position of choosing the laws and court orders they wish to follow. Moreover, if courts or companies openly disregard foreign court orders, legal certainty in the online environment is undermined, fostering cross-border litigation and an expansive approach to applying domestic laws on a global basis.

The Equustek case is a landmark ruling that held the potential to establish the foundation for global standards on internet jurisdiction and the responsibility of internet intermediaries. However, the experience to date suggests that by opening the door to global takedowns, the ruling invites protracted global litigation, the empowering of large internet intermediaries and an expansive assertion of internet jurisdiction by Canadian courts and tribunals. There is undoubtedly a need for global standards to provide greater certainty on the intersection between the internet and jurisdiction. In the aftermath of the Equustek ruling, the outstanding question remains whether the Canadian case will emerge as an approach that is emulated by other courts or viewed as a cautionary tale of a legal doctrine best avoided.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.
  • Michael Geist

    Michael Geist is a CIGI senior fellow as well as a law professor at the University of Ottawa where he holds the Canada Research Chair in Internet and E-commerce Law.

Return
to cigi
2017