In Piracy Fight, Google Dealt Huge Defeat in Canadian Appeals Court

Google Logo NEW - H 2012

Google Logo NEW - H 2012

Google has suffered what could be its worst legal defeat since Europe's top court ordered takedowns as part of an individual's "right to be forgotten." On Thursday, a Canadian appeals court upheld injunctions mandating that Google remove certain pirate sites from its search engine on a worldwide basis.

The ruling will certainly be cheered by the entertainment industry, which has given Google's links ample attention over the years, but struggled through the failure of the Stop Online Piracy Act. Attempting to get state attorney generals throughout the U.S. to crack down on Google hasn't bore much fruit either.

Realizing the potential impact of a case brought by Equustek Solutions Inc., the maker of industrial network interface hardware, the International Federation of Film Producers Associations and the International Federation of the Phonographic Industry intervened in the case, and against Google's objections, was given the opportunity by the Court of Appeal for British Columbia to bring its own arguments.

The dispute began as a battle between Equustek and a one-time distributor of its products. The defendant allegedly re-labeled the products to pass them off as their own and began filling orders through websites operating outside of Canada. Equustek alleged trademark violations and the misappropriation of trade secrets, and the plaintiff got a judge to force Google to remove a number of websites used by the defendants from its search indexes.

Google removed URLs from, but wouldn't go further, which led Equustek to complain of a "Whack-A-Mole" game to rid the internet of counterfeit products. No surprise why the film and music industry associations would become interested in this case.

In the new ruling, Justice Harvey Groberman concludes that the injunction isn't beyond the jurisdiction of the court — that the dispute between the plaintiff and defendant has a strong connection to the Canadian province and that aspects of Google's business, from the way it distributes targeted advertising to the gathering of information through web crawling software, also touches individuals in the region.

"Google raises the specter of it being subjected to restrictive orders from courts in all parts of the world, each concerned with its own domestic law," he writes. "I agree with the chambers judge that it is the world-wide nature of Google’s business and not any defect in the law that gives rise to that possibility. As well, however, the threat of multi-jurisdictional control over Google’s operations is, in my opinion, overstated."

Groberman explains that courts should be "very cautious in making orders that might place limits on expression in another country. Where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made."

But in the part of the decision that will likely cause champagne bottles to pop at MPAA headquarters and grave concern in Santa Clara, the justice shrugs off Google's free speech concerns when it comes to  intellectual property rights. "It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation," he writes.

He adds that the plaintiffs have established "that an order limited to the search site would not be effective. I am satisfied that there was a basis, here, for giving the injunction worldwide effect."

According to the decision, this is the first time a court in British Columbia has issued a worldwide injunction in 25 years.

Here's the full decision.