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Supreme Court 'Equusteks' it to online trademark infringers

This post concerns one of the two recent landmark decisions from the Supreme Court of Canada concerning territorial commercial interests on the borderless Internet. In Google Inc. v. Equustek Solutions Inc. 2017 SCC 34, the Court confirmed that Canadian courts can grant orders prohibiting the infringement of Canadian trademarks and the enabling of trademark infringement wherever that occurs, including on foreign search indexes that list infringing websites. Canadian court orders can also bind persons who are not parties to the underlying lawsuit, including Internet service providers who, inadvertently, provide the means for trademark infringement.

 

The issue before the Court was whether Google Inc. could be ordered, pending the outcome of a lawsuit to which it was not a party, to remove websites from its international search indexes that the defendant was using to sell goods that infringed the plaintiff’s trademark and related rights. 

Google argued that the British Columbia Supreme Court had erred in requiring Google to de-index the defendant’s websites because Google was not a party to the underlying law suit and since Google was not alleged to have done anything unlawful.  Google also argued that the lower court had over-reached its territorial jurisdiction in ordering Google to remove links to the defendant’s websites on all of its international search indexes and not just on Google.ca, the Canadian index. Thirdly, Google argued that the lower court’s order violated the principles of international comity and rights of freedom of expression.

In a 7-2 decision, the Court rejected each of Google’s arguments. The Court confirmed that Canadian courts may grant prohibitive orders against a non-party “enjoining that person’s conduct anywhere in the world” where it is necessary to protect the plaintiff’s rights. The Court found that it was necessary here since: (i) the defendant had previously flouted the court’s orders to remove the infringing products from its websites; (ii) it was operating from an unknown location outside of Canada and selling infringing products all over the world; and (iii) it was largely able to do this because its websites were indexed on Google’s various international search engines. The Court also rejected Google’s arguments about international comity and freedom of expression, noting that “most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong” and that “we have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods”.

The decision is major victory for the rule of law generally and for owners of Canadian trademarks and copyright who have struggled to pursue online infringers who operate under the cloak of anonymity or from unknown locations. It is a recognition by our highest Court that territorially restricted orders against such infringers are useless. They are useless because websites can be hosted and accessed from anywhere in the world and because it is so easy for online infringers to operate in the shadows and engage trademark owners in hopeless whack-a-mole contests.

It is now recognized by Canada’s highest Court that Canadian trademarks and copyright can only be enforced effectively on the Internet if Canadian court orders can apply extra-territorially and bind service providers like Google who provide the means for those rights to be infringed. 

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John Simpson is the Principal of Shift Law. John launched Shift Law in 2011 after eight years working at some of Canada's top intellectual property, litigation and business law firms.