Artificial intelligence, extends hand, computer user

The Very, Very, Very, Very Long Arm of the Law

Before the Internet, if someone was selling your stuff without permission, it wasn’t hard to shut them down.  You could get a court order, stomp over to their brick and mortar store, hand it to them, reclaim your wares, and physically monitor their sales.

In 2017, things are a bit different. Between the lack of a physical presence, IP spoofing and other location masking techniques, how are you supposed to shut down an unauthorized e-commerce site?  This is the problem that Equustek Solutions, was facing when it discovered that Datalink Technologies was distributing its products without authorization. The case went to the Supreme Court of Canada which ultimately decided in favour of Equustek and in doing so, caused a ruckus by ordering that a Canadian injunction have a global effect.

The Facts:

  • Equustek learned that Datalink had been re-labelling an Equustek product in order to pass it off as one of their own, and had also used Equustek’s confidential information to create a competing product.
  • Equustek was successful in getting a number of court orders against Datalink for passing off. Datalink mostly ignored the orders and then set up shop outside of Canada, effectively fleeing the jurisdiction.
  • Equustek then called the Mountain View Monolith (a.k.a Google), for assistance with de-indexing the Datalink websites, which would prevent search results from including the Datalink websites.
  • Google refused, explaining that with a court order, it would (1) de-index specific webpages but not an entire site, and (2) it would only de-index searches on “google.ca”. So, anyone going to “google.de” would, after searching the latest Bundesliga football scores, still be able to find Datalink’s webpages.
  • Equustek brought Google into the proceeding and asked the Court for a worldwide injunction prohibiting Google from displaying any part of Datalink’s website in any search results on the basis that only a worldwide injunction would be effective.

What the Supremes Said:

The Court ruled in Equustek’s favour. The key rationale for the Court’s decision was as follows:

  1. The Internet has no borders — its natural habitat is global.” The Court reasoned that the only way for an injunction to have the necessary effect in this case would be for its application to be global.  To do otherwise would be to deprive Equustek of any effective protection since customers could easily continue to purchase the unauthorized products from the Datalink website by searching for it through other Google search engines.
  2. What about international law? Google argued that complying with a Canadian court’s global order could put them in violation of international laws. The red robes didn’t discount the argument but instead said that since Google didn’t present any actual evidence on this point, the Court could not deny the request for an injunction on that basis.
  3. But isn’t Google innocent? Google disputed whether such an order could be issued against a party that was not involved in the dispute. Again, the Court disagreed, saying that since Google was so integral to facilitating the unauthorized actions, that an order against it as a third party is warranted.

Google has now taken the unconventional step of filing a lawsuit in the federal court in California seeking a ruling to block enforcement of the Supreme Court of Canada’s order on the grounds that it violates the U.S. constitution and federal laws.

What Does this Mean?

Datalink showed a clear lack of non-compliance with the lower court orders and even fled the jurisdiction. Most of the unauthorized sales were occurring outside of Canada. Google acknowledged that de-indexing the website can be done with relative ease. These are fairly specific facts.

Would the Court would have made the same order if Datalink had shown some compliance with the previous court orders, or if Datalink’s sales were not significant outside of Canada? Was it a factor that the entity involved was a company as massive as Google? Did it matter that Google could effect a worldwide de-indexing, and that it just didn’t want to?  All great questions which will only be answered the next time one of these unique cases lands on the Courthouse steps.

So for now what do we take from all this? It seems that in the context of the borderless Internet era, the Supreme Court is willing to consider, in appropriate circumstances, extending the reach of a Court order beyond our geographical borders and boldly go where many courts have not gone before.





Sanjay Kutty

Sanjay is a Co-Founder and Lawyer at Spark LLP. Sanjay spent most of his career as in-house counsel at Bell Canada and CIBC before escaping to work instead with dynamic and innovative businesses, helping them to build interesting and exciting solutions for their customers. Sanjay travels a lot, so is the Chief Location Scout for Spark LLP.

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