Businesses today operate in a global, borderless environment, in which social media platforms allow them to market and distribute their goods and services around the world with ease. As a result, it has become more difficult to protect and enforce a company’s intellectual property rights online. For example, an alleged infringer could circumvent a country-specific restriction to access certain material by simply changing his or her ‘virtual’ location. This is posing an interesting question for the courts, and has led to a recent Supreme Court of Canada (SCC) decision in which the SCC ordered a worldwide injunction against a third party in order to ensure that an alleged infringer could not circumvent a national restriction. (Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 (the Worldwide Injunction Decision)).
The Worldwide Injunction Decision
Equustek brought an action against Datalink. This action claimed that Datalink was infringing Equustek’s intellectual property. Specifically, Equustek claimed that Datalink, while acting as a distributor of Equustek’s products, began to re-label one of its products and pass it off as Datalink’s product. Equustek also claimed that Datalink acquired confidential information and trade secrets belonging to Equustek, and used them to design and manufacture a competing product. Datalink initially filed a statement of defence to dispute these claims. However, it subsequently abandoned this proceeding and left British Columbia.
Equustek obtained court orders to prohibit Datalink from the sale of inventory and the use of Equustek’s intellectual property. Nevertheless, Datalink continued to carry on business from unknown locations around the world. Equustek then requested a search engine to de-index Datalink’s websites. The search engine initially refused, but Equustek obtained an order from the Supreme Court of British Columbia demanding Datalink cease operating or carrying on business through any website. In response to this order, the search engine de-indexed specific webpages associated with Datalink on the search engine’s website.
This strategy proved to be ineffective. Datalink circumvented these restrictions by moving the objectionable content to new webpages. Also, Datalink’s website continued to be displayed through the search engine’s other search engines. As a result, Equustek sought an interlocutory injunction enjoining the search engine from displaying any part of Datalink’s websites on any of its search results worldwide.
The majority of the SCC granted the interlocutory injunction. The Court determined that the test for an interlocutory injunction had been met: (i) there was a serious issue to be tried; (ii) Equustek was suffering irreparable harm; and (iii) the balance of convenience was in favor of granting the order.
The Court also clarified that injunctive relief can be granted against non-parties. The Court wrote that an interlocutory injunction against a non-party is justified in circumstances such as this where an alleged infringer can simply circumvent the geographical restrictions online to avoid any injunction that operates solely within Canada.
The Court went on to write that, where it is necessary to ensure an injunction’s effectiveness, a court can grant an injunction enjoining conduct anywhere in the world. The Court found that this situation warranted such an injunction. Balancing the factors, the Court wrote that a worldwide injunction was the only effective way to mitigate the harm to Equustek. It also found that the only way to ensure the injunction’s effectiveness was to apply it to the search engine’s search results globally. As such, the Court ordered the search engine to globally de-list Datalink’s websites.
The Worldwide Injunction Decision has important implications for any business with intellectual property that operates online.
- First, we now live in an era where globalization and the Internet have made it easier for intellectual property rights to be violated and also more difficult to stop infringing conduct when it occurs online. Businesses should be careful and diligent in enforcing their rights and use all available legal means to prevent infringement.
- Second, businesses should have a comprehensive internal intellectual property policy in place. This policy should have guidelines in place which govern how the company will seek to enforce its rights, and also ensures that employees do not inadvertently violate the intellectual property rights of others.