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Mann’s Technology Newsletters | Internet conduct

A court with in personam jurisdiction over a non-party can make an order affecting internet conduct in other jurisdictions



Mann’s Technology Newsletters – Information & Technology Law Newsletter



By: J. Fraser Mann & Elisabeth Symons



II.1 — Equustek Solutions Inc. v. Google Inc.

This decision was an appeal from a judgment of the British Columbia Supreme Court which granted an interlocutory injunction having world-wide effect, that prohibited Google Inc. ("Google") from including specific websites in results delivered by its search engines.

Background

The injunction granted against Google arose from a proceeding to which Google was not a party. That proceeding was brought against defendants for the infringement of the plaintiffs' rights through the defendants' sale of counterfeit products on various websites. The chambers judge in the original proceeding issued an order requiring Google to cease indexing or referencing various websites as part of any search results on its Internet search engines. In its appeal, Google claimed that Google did not have sufficient connection to British Columbia to allow the court to accept jurisdiction, that the injunction represented an improper burden on an innocent non-party, and that the extraterritorial reach of the injunction violated the principles of comity.

Issues:

(i) — Jurisdiction of Court to Grant World-Wide Injunction

The first issue before the Court was whether the chambers judge had jurisdiction to grant a world-wide injunction against Google. The Court reviewed the provisions of the Court Jurisdiction and Proceedings Transfer Act which grants a court territorial competence in a proceeding only if there is "a real and substantial connection between British Columbia and the facts on which the proceeding against that person is based". The Court of Appeal found that for purposes of this provision, jurisdiction should be determined with respect to the original proceeding brought against the defendants, together with any procedure or motion brought in connection with that action. Since the underlying action in this case was within the territorial competence of the lower court, that court also had jurisdiction over the injunction application. There was a real and substantial connection between British Columbia and the facts on which the injunction application against Google was based. Moreover, even if the injunction application were to be treated as an independent proceeding, the facts underlying the injunction application (involving the infringement of the plaintiffs' intellectual property rights) also had a strong connection with British Columbia.

(ii) — Assumption of In Personam Jurisdiction Over Google

On the question of whether Google had sufficient connections to British Columbia to permit the court to assume in personam jurisdiction over Google, the Court of Appeal found that while Google does not have servers or offices or have resident staff in the province, keys parts of Google's business are nevertheless carried on in the province. Such business activities include the advertising carried on by Google, and the gathering of information residing in the province or belonging to individuals located in the province, through the use of Google's proprietary web crawler software. Moreover, the business carried on in British Columbia is an integral part of Google's overall business operations. Google's success as a search engine depends on collecting data from websites and providing search reports, in each case throughout the world, including British Columbia.

(iii) — Whether Injunction Should be Granted Against Non-Party

The Court noted that courts should generally exercise restraint in granting injunctions, particularly against persons who are not parties to the original proceeding. However, there are no strict limits as to the circumstances in which an injunction may be granted. The granting of injunctive relief against third parties as an ancillary means of preserving the parties' rights comes within the well-established jurisdiction of the courts. Moreover, once it is established that a court has in personam jurisdiction over a non-party to a proceeding, the fact that its order may affect activities in other jurisdictions is not a bar to making an order, since it is well-established that British Columbia may grant a worldwide injunction.

(iv) — Implications of Principles of Comity

The Court also rejected the claim by Google that the injunction violated the principles of comity, which generally requires a court to give due consideration to the laws of other nations and the rights of their citizens. In the present case, there was no realistic assertion that the order made against the defendants to the original proceedings (prohibiting a violation of the plaintiffs' intellectual property rights) offended against the core values of any nation. The limited ancillary order made against Google was only designed to ensure that the plaintiffs' rights were respected. The Court reviewed various cases from other jurisdictions which found it necessary, in the context of Internet abuses, to pronounce orders having international effect. The Court concluded that there was neither a jurisdictional nor a practical bar to the granting of the injunction in this case by the chambers judge.

(v) — Tests for Granting of Injunction

On the question of whether the tests for the granting of an injunction had been met, the Court found that the plaintiffs had a strong case against the defendants (insofar as the defendants had abandoned their defence of the claim), and that the plaintiffs would suffer damages which would likely not be recoverable if the plaintiffs could not prevent potential customers from accessing the defendants' websites. With respect to balance of convenience, the Court agreed with the finding of the chambers judge that Google would not be inconvenienced by the order and that the granting of the injunction was the only practical means of making the defendants' websites inaccessible, and thereby preventing the defendants from flouting the court's orders. While a court should refrain from granting a worldwide injunction if an injunction with domestic consequences would accomplish the necessary results, the plaintiffs had established in the present case that an order limited to Google.ca searches would not be effective. Since there was no evidence that the defendants' websites had ever been used for lawful purposes, an argument that the injunction might impose unnecessary impediments on free speech was not accepted by the Court.

The Court of Appeal upheld the order of the chambers judge to grant an injunction until the conclusion of the trail of the action, or until further order of the court.

Conclusions

The decision of the British Columbia Court of Appeal is consistent with decisions in other jurisdictions, which have recognized that improper conduct on the Internet may reach across national boundaries, and may extend well beyond the jurisdiction in which the court is located. The decision establishes that once an organization carries on activities within a jurisdiction, then the absence of a physical office or tangible property within the jurisdiction will not prevent a court from exercising its powers to prohibit certain conduct by that entity. Moreover, the court's order may extend to activities carried on by that entity in any jurisdiction where such conduct has an adverse impact on persons residing within the jurisdiction. The decision is likely to be followed by other courts that are faced with the challenge of addressing wrongful conduct on the Internet that is not restricted to any one jurisdiction.


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