Lawyers, patent &
trademark agents

Global Injunction Against Counterfeiter Upheld

On June 28, 2017, the Supreme Court of Canada released its decision upholding a global injunction requiring Google to de-index certain web sites to prevent the sale of counterfeit goods via the Internet. While controversial with the general public, the decision is less controversial from a legal perspective.

Freedom of Expression

The public controversy arose from the fact that a Canadian court was directing Google Inc., a non-party to the action, to de-index the defendant’s web sites on ALL of its search engines WORLD WIDE. Multiple parties intervened raising concerns that it would set a dangerous precedent for freedom of expression.

In the end, the majority of the court summarily dismissed the freedom of expression concerns with the following observation:

This is not an order to remove speech that, on its face, engages freedom of expression values, it is an order to de-index websites that are in violation of several court orders. We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.

There was little controversy on the facts that the defendant’s activity was unlawful. First, the defendant had failed to defend the action and so all of the plaintiff’s allegations were deemed to be true at law. Second, Google also acknowledged that most countries in the world would likely view the selling of counterfeit products as unlawful.

Finally, the court noted that if Google discovered that its compliance with the injunction violated the laws of another country, it was entitled to apply for an order varying the scope or terms of the injunction. In the absence of such evidence, the court would not engage in speculation.

Global Jurisdiction

With respect to the jurisdiction of a Canadian court to issue such a global order, there was surprising little disagreement. First, Google did not challenge the finding that the Court has the authority to grant orders binding Google Inc. This arose simply from the undisputed fact that Google carries on business in Canada. As a result, the Canadian courts have in personam jurisdiction over it.

Second, it was generally agreed that where the court has in personam jurisdiction, it can grant an injunction enjoining that person’s conduct anywhere in the world if necessary to ensure that the injunction is effective. There was longstanding case law to support that proposition.

Finally, the court found that the only effective means of enforcing the injunction in the circumstances was for it to operate globally:

The problem in this case is occurring online and globally. The Internet has no borders – its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates – globally.

Orders against Non-Parties

With respect to the jurisdiction of a Canadian court to issue an order binding on Google who was not a party to the lawsuit, the court found that its authority was longstanding in this regard. Put simply, the court notes that:

The non-party’s obligation arises “not because [it] is bound by the injunction by being a party to the cause, but because [it] is conducting [itself] so as to obstruct the court of justice.

The court also rejected arguments that the injunction would impose a hardship on Google or compromise its allegedly “content neutral character” as the operator of an Internet search engine. In this regard, Google acknowledged that it can and, often does, voluntarily do exactly what the injunction ordered it to do:

  • First, Google admitted that it voluntarily de-indexes web sites associated with child pornography and “hate speech” to avoid generating links to those sites in its search engines
  • Second, Google admitted that it routinely de-indexes web sites to comply with “take-down” notices issued under the US Digital Millennium Copyright Act respecting instances of copyright infringement.

In other words, Google is not, in fact, “content neutral” with respect to the content generated by its search engines so the injunction would not, in fact, alter the character of its services or inconvenience it.

Injunctions Generally

Finally, the court observed that the “powers of courts with equitable jurisdiction to grant injunctions are, subject to any relevant statutory restrictions, unlimited” and that such orders are both discretionary and entitled to a high degree of deference on appeal:

The fundamental question is whether the granting of an injunction is just and equitable in all of the circumstances of the case. This will necessarily be context-specific.

Conclusion

While the decision may be controversial with the public, it arises from a unique set of facts which render the decision less controversial from a legal perspective.

First, the defendant did not defend the action, could not be located and defied multiple court orders before the injunction against Google was sought. In other words, its conduct was undeniably egregious and other remedies had proven ineffective.

Second, the counterfeit goods were manufactured with stolen trade secrets which, like copyright, can be subject to international protection at law. Trademarks and patents, on the other hand, are recognized on a country-by-country basis and therefore only eligible for national protection. It is relatively rare for a single business to own the same trademark or patent in every country in the world. So, while the decision may provide a valuable precedent for effectively preventing access to web sites routinely engaged in facilitating copyright infringement, it would be more challenging to seek such a global injunction for trademark or patent infringement.

Finally, the decision does not create new law. It merely applies well-accepted legal principles to a new context – the Internet. The legal curiosity is how the courts of different countries will cooperate with each other to recognize and enforce such orders in future – especially if conflicting value systems and laws are engaged.