Trade secrets versus internet freedom

Today the Supreme Court of Canada opens a civil hearing that pits Equustek Solutions Inc., of Burnaby, BC, against Internet giant Google. Here’s the Supreme Court summary:

Under what circumstances may a court order a search engine to block search results, having regard to the interest in access to information and freedom of expression, and what limits (either geographic or temporal) must be imposed on those orders? — Do Canadian courts have the authority to block search results outside of Canada’s borders? — Under what circumstances, if any, is a litigant entitled to an interlocutory injunction against a non-party that is not alleged to have done anything wrong?

The plaintiffs sued their former distributors for unlawful appropriation of trade secrets, alleging that the distributors designed and sold counterfeit versions of their products. The plaintiffs obtained injunctions against the distributors, prohibiting them from carrying on any business online. When this proved ineffective, the plaintiffs sought a court order against Google, to prohibit it from displaying search results that included the distributors’ websites.

The Supreme Court of British Columbia granted a worldwide injunction against Google, finding that it had territorial competence over Google and that it possessed an inherent jurisdiction to maintain the rule of law and protect its processes, which in appropriate circumstances may include an injunction against non-parties. In this case, the balance of convenience favoured granting an injunction. The Court of Appeal agreed that the court held jurisdiction over Google with respect to the injunction application. It also concluded that it was permissible to seek interim relief against a non-party. The power to grant injunctions is presumptively unlimited, and injunctions aimed at maintaining order need not be directed solely at the parties involved in litigation. In this case, an injunction with worldwide effect was justified.1

Equustek designs and manufactures flexible communication interfaces mainly for the industrial automation industry. Products include gateways, bridges, and integration services. After a distribution agreement with American company Datalink Technologies foundered in the early 2000s things got messy, and confusing. However, around 2006 Datalink began selling a copy in substitution for one of Equustek’s products, and according to Equustek, returning defective counterfeits to Equustek for repair/replacement. (Sources: 1Supreme Court of Canada, case 36602 – Google Inc. v. Equustek Solutions Inc., et al.; Reasons for Judgment in the successful appeal in BC Supreme Court of the original Equustek vs. Jack proceeding (16 pp., 167 Kb pdf); The Toronto Star, 2016-12-06, “Google, B.C. firm duel over free speech, copyright in Supreme Court battle“; Techdirt blog)