Google vs. Equustek: Unfortunate Precedent or Positive Development?

Source: http://www.shutterstock.com

I have written about the case of Google Inc vs Equustek Solutions several times over the past couple of years (for example, here, here, and here). This series of blog posts tracked the evolution of the case that resulted in a decision by the Supreme Court of Canada to uphold an earlier ruling by the BC Supreme Court requiring Google to de-index from global search results listings for a Canadian company, Datalink, that had been found by the courts to be infringing online the intellectual property rights of another Canadian company, Equustek.

The details are a bit complicated but at its core was the issue of whether Google could or would block global search results in this case. Datalink had violated the IP rights of Equustek and, in defiance of a Canadian court order, had continued selling the infringing goods over the internet from outside Canada. To enforce the court order, Equustek requested that Google de-index Datalink’s website from its global search results. Google refused on several grounds, not because it could not do so, but because it did not want to do so. It argued that the Canadian order had extraterritorial reach and claimed that the decision would open the door to court rulings in other countries that could infringe freedom of expression, including the First Amendment of the U.S. Constitution. Both the BC court and the Supreme Court of Canada (SCC) dismissed Google’s arguments, outlining grounds for asserting jurisdiction (essentially that Google did business in Canada) and refuting claims that advertising the sale of counterfeit goods was a freedom of speech issue.

Background of the Case

Google lost at the BC Supreme Court, on appeal to the BC Court of Appeal and on appeal again to the Supreme Court of Canada. As I remarked at the time, this was a victory for common sense, and it was welcomed by members of the copyright community. For example, the music industry noted that “The case establishes principles that will guide the responsibilities of Internet intermediaries to reduce or eliminate harms amplified by their activities”. Google’s supporters like the EFF and its Canadian clone, Open Media, claimed that a global de-indexing order for IP infringement would lead to “world-wide internet censorship”. This was nonsensical and overblown rhetoric. The SCC rightly decided that entities like Google cannot float in “the cloud” above national law just because they operate in multiple jurisdictions. Google, with its deep pockets and history of litigiousness, was not prepared to take the decision lightly and pursued remedies in the US in an attempt to nullify the Canadian order. While they succeeded in an uncontested hearing in getting a decision from a California court that the Canadian order had no effect in the US, they have been unsuccessful in getting Canadian courts to overturn the order based on this US decision.

A “Cautionary Tale”?

Anti-copyright campaigner Michael Geist, of the University of Ottawa, has mounted an ongoing crusade against the Supreme Court’s Equustek decision from the very beginning. At the time the SCC first heard the case, he claimed that a decision upholding the BC Court’s injunction would “effectively leave it to Google to decide whether to comply with Canadian law”. While Google has used its deep pockets and every legal trick in the book to get out from under this decision, it has complied, as one would expect it to. The costs of thumbing its nose at the Supreme Court of Canada are not something that a corporation like Alphabet will willingly take on. But Dr. Geist continues the crusade. In a paper published by the Centre for International Governance Innovation (CIGI) at the University of Waterloo last month, he laments the “unintended” consequences of the SCC’s Equustek decision. According to Geist there are three unintended effects arising from the case that threaten internet governance;

  1. Protracted litigation;
  2. Increased power for internet intermediaries, like Google;
  3. Expansion of the Equustek approach to other legal disciplines.

 

Protracted Litigation

In support of his protracted litigation argument, Geist cites the many steps that Google resorted to in order to avoid complying with the Canadian decision. This is his account;

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.”

All this is factual and all of it can be laid at the feet of Google and its unwillingness to accept the SCC’s ruling. Google’s forum-shopping has not brought the outcome they were hoping for so they continue to litigate. That is not the fault of the Equustek decision; it is the way Google operates. They will keep litigating until they think they can achieve the result they want. It is time for them to realize that it doesn’t always work that way.

Increased Power for Internet Intermediaries

His second argument is that the decision gives Google (and other internet intermediaries in a similar position) the power to decide whether or not to comply with the law. In fact it doesn’t. Any law can be ignored; it is the penalty to be paid for non-compliance that counts. Geist’s argument that a potential conflict between local laws could put Google in the position of deciding which laws to follow is of course theoretically possible. To stretch that theory to the Equustek case is not realistic however. It is hard to conceive of a jurisdiction that would accept that theft of trade secrets was not an outcome to be avoided. Google could have refused to comply with the Canadian order, as it did in New Zealand when a Kiwi court ordered Google to block sensitive information related to an ongoing trial, but it did not do so. The penalties for contempt of court would have been severe. In the New Zealand case, Google claimed that it was not subject to local laws, having no presence in the country, and the New Zealand authorities let Google get away with it! As I noted at the time, Google’s arrogance and high-handedness is wearing thin on legislators and the public.

It was that kind of arrogance that led Google to seek to overturn a Canadian Supreme Court decision by going to a federal district court in California to declare the Canadian order non-enforceable in the US. Lawyer Barry Sookman has criticized the order given by the court in the Northern District of California which enjoined Equustek from seeking to enforce the Canadian order in the United States (although Equustek had not tried to do so). Sookman has pointed out that the California court decision contradicts the basic rules of comity, whereby one jurisdiction will respect the decisions of another unless the decision is contrary to natural justice or repugnant to public policy, which was certainly not the case in the Equustek decision. As Sookman states;

The California court – as a matter of basic respect for our courts – should have scrutinized the Equustek Order and made a determination whether to enforce it in accordance with established principles. By not doing this the California court not only made a major mistake in rendering its decision. It thereby also thumbed its nose at our highest court and created what should be viewed as an international incident.

The decision sets an unfortunate precedent. Google and other large U.S. social media companies operate global platforms. While their operations are global, they often seek, as in this case, to have only the laws of the U.S. apply to their businesses. They want all the benefits of carrying on business in Canada and around the world, but want to insulate themselves from liability under local laws. This is especially problematic given the increasing dominance and global reach of these large enterprises in the face of the expanding attempts of local courts and local laws to impose responsibilities on these social media giants to protect their citizens.”

After receiving this order in California, Google returned to the British Columbia court to seek to have the original injunction varied. The BC court declined to do so, pointing out that nothing in the California order confirmed that Google was required to violate the laws of the United States or that the Canadian order impinged on Google’s First Amendment rights. To this date, Google continues to comply with the SCC order. It is hard to see how Equustek has put into Google’s hands the power to determine whether to comply or not.

Extended Application of the Equustek Decision

This brings us to the third argument put forward by Michael Geist. He argues that because of the Equustek decision, Canadian courts are becoming more vigourous in their exercise of authority over online activities where Canadian law is at issue—and that this is a negative trend. This argument has been extensively rebutted in a detailed post by Barry Sookman where he points out that the judicial reasoning in the court cases cited by Geist was not based on the Equustek decision, but rather on earlier precedents and longstanding principles of public international law. You can read the full blog post, “The Unintended Equustek Effect: a reply to Michael Geist”, extensively annotated and documented, here. While not flowing from the Equustek decision, the application of Canadian law where there is valid reason to exert jurisdiction–even in internet cases that can transcend provincial or national boundaries–is a good outcome, not something to shy away from. Geist argues that this raises issues of enforceability, but Canadian courts have taken the approach that the law is the law, whether offline or online, and considerations of whether or to what extent an order can be enforced abroad should not become a factor in reaching the right decision at law. While there may be issues of enforceability outside Canada, Google or other internet intermediaries must not be allowed to thumb their noses at national courts.

Conclusion

The trend today is clearly to hold internet intermediaries more, not less, accountable. There have been too many abuses of privacy, copyright and other IP rights, and criminal matters such as illegal dissemination of violent, racist acts to allow these giant international platforms to claim that they are bound by California law, but no other. Google vs. Equustek, rather than being the cause of unintended negative effects with respect to online governance, is a welcome beacon for the applicability of responsible national laws and for holding the giant international internet platforms accountable and subject to the rule of law, despite their global internet presence. Rather than being a “cautionary tale” as described by Michael Geist, Google vs. Equustek has been a major step forward toward ensuring that the law applies equally to all.

© Hugh Stephens, 2019. All Rights Reserved.

 

 

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