IP Rights: Where Does the Internet Stop?

IP Rights: Where Does the Internet Stop?
The Supreme Court of Canada (SCC) recently delivered a ruling in Google v Equustek 2017 SCC 34. More than just another landmark ruling for Canada, it has potentially significant global repercussions. By a margin of 7-2, the SCC upheld a British Columbia court ruling which ordered Google to de-list websites and entire domains from its global search index.
This global ‘Google Order’ reaffirms the concept that ‘the Internet has no borders, its natural habitat is global.’ By injuncting Google globally, it also highlights the cross-border nature of intellectual property as the cause of legal problems in multiple jurisdictions. But is IP the appropriate battleground to resolve the conflict between a borderless Internet and our territorial legal system?

Perhaps inevitably, the SCC decision has become the fulcrum for a range of issues extending far beyond the merits of the case. While Google is said to be ‘considering its options’, lawyers are busily re-examining questions relating to extra-territoriality, freedom of information, and enforcement. IP is once again centre stage in a cross-border case.

The basic facts
The facts of the dispute were straightforward. Canadian technology company Equustek Solutions sued distributor Datalink Technology Gateways for listing its products on Google as their own. Google cooperated, but only insofar as de-indexing individual pages, and even then, only on Google.ca. The complaint from Google that they were not a party to the case and should not therefore have to comply with broader injunctions was dismissed.

There was apparent uniformity on the essential facts: the listings did infringe IP, Equustek had a valid claim and faced irreparable damage, and the listings should be removed in some form. Google even suggested that it was neither inconvenient nor especially costly to delist the websites globally.

Jurisdiction and inflation of impact
Why then did this result in such a big fight, and on what basis? The answer to the first question is self-evident – although it was a clear-cut case, it could set precedents for more aggressive actions elsewhere. Although not a direct party to the proceedings, Google nevertheless raised a ‘freedom of information / freedom of expression’ defence, arguing that, despite their Canadian actions being in breach, this might not apply in other jurisdictions similarly affected by the global injunction.

Some observers argued likewise. The libertarian EFF (Electronic Frontier Foundation), which must have faced a dilemma in whether to side with government or Google, characterised the decision as a ‘race to the bottom’. Others, including the music industry, welcomed it as fair protection for creators and owners of IP rights. Despite two dissenting judges, the Supreme Court was pragmatic: they issued an injunction against Google, and did it globally; but if Google can subsequently demonstrate that it does cause problems in other jurisdictions, they will reconsider. As justification, the judgment listed other global injunctions, including the take down of defamatory material, copyright enforcement issues, and the EU right to be forgotten. Here, the IP community should take note of the common theme: IP is becoming the legal test-bed for cross-jurisdictional disputes.

That so many such disputes centre around the Internet is no surprise - without borders, geography has little meaning. It also creates a perfect liquidity of data with IP becoming the legal manifestation of information: creating, sharing, protecting, and indeed, removing it. IP law sharply defines territorial boundaries. Combine the Internet, information, and IP, and certain issues come to a head. However, it is unclear whether IP is the solution for the information problem, or the cause.

IP complexity and the Equustek dangers
The facts of the Equustek case were so transparent that the court was comfortable in fighting this battle. Freedom of expression was addressed as follows: removing listings ‘doesn’t offend the core values of any nation’, and ‘we have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods’. Notably, the decision took little time on the IP issues. There is no significant debate that IP was infringed in Canada, but are there any territories where this would not have been an infringement? When considering its options, Google may consider this question carefully.

Similar cases citing cross-border injunctions have also been quite factually clear-cut. These have involved the removal of defamatory material and/or the shutting down of illegal content sharing – fundamental elements in a reasonable global copyright system. But IP is infinitely more complex, requiring caution to be exercised when venturing into such areas.
In the patent sphere, for example, cross-border decisions have not fared well in the context of super-territorial issues. The Internet produces complex questions, such as how to invoke a telecoms patent where infringement causes diverse elements in multiple jurisdictions.

Assorted enforcement initiatives have already failed. Around the millennium, pan-European injunctions were favoured, but then faded. The criminal enforcement directive, proposed by the EU, also failed, largely because of political sensitivities in enforcing a complex, nuanced monopoly which potentially breached national sovereignty. Meanwhile the Unified Patent Court (UPC) is facing a similar dilemma in Germany following a constitutional challenge. Global patents remain a distant prospect with all efforts to harmonise the system globally being hit by too many regional political obstacles.
Put simply, rights and wrongs in patent dispute are difficult to determine. Even in less technically complex areas, jurisdictional differences can arise. The ‘right to be forgotten’ is a good example. The EU (fervent supporters of the concept) and the USA (which is not) are so distanced from each other that an argument to enforce such a case globally - that does not ‘offend the core values of any nation’ - might fail in an instant.

Enforcement issues
Finally, there is the issue of enforcement. Because they are primarily economic in nature, IP remedies become a little easier for the courts to effect. There is a but. For although legal systems remain territorial - as do remedies - the realities of global enforcement, whether for IP or any other right, are opaque.

As it ‘considers its options’ Google will presumably delist globally to avoid potentially punitive sanctions in Canada (assuming it does not withdraw from the territory), since it is bound by the injunction. Other less global entities may have greater mobility. Datalink, which kick-started the litigation, hurriedly left Canada to trade from an unknown location.
The Equustek case has been high-profile, high-value and global, with ramifications for everyone. However, judges around the world are unlikely to enforce injunctions imposed by their peers in other territories. What we might see instead is cooperation in obtaining evidence - courts following suit in issuing global injunctions which they can enforce where evidence is concerned. Accordingly, it may be worth owners mounting proceedings for global injunctions: that threat alone could be a powerful deterrent for would-be infringers.

Implications for businesses
If positioned on the wrong side of an action, careful consideration will be necessary when considering a primary place of business, in particular how important a particular territory is if a locally-enforceable, globally-imposed injunction is awarded there. The Internet has become akin to international waters surrounding islands which are governed by local courts. As a result, it may be necessary for every global or multi-national player to reconsider their position and their risk profile, and to acknowledge that the legal community is endeavouring to rectify the situation.

When it comes to creating a level playing-field in Europe, Google v Equustek may accelerate the moves that have been observed for more than a decade to unify rights across the continent. The UPC, a court that will be common to the Contracting Member States of the EU and which they have been working very hard to establish, should get a very strong boost from this precedent, together with some useful guidance on a healthy middle ground. Although the UPC seems to have stalled for now, we may yet see national courts take lessons from it and strive towards a de facto unified enforcement system across Europe. Even with Brexit making things harder for the UK, strong ties between IP courts across Europe could mean that, in this respect, the UK is not an island either. As elsewhere, the Internet has provoked a major rethink of how businesses can and should operate at an international level.

A potent cocktail of the Internet, information and intellectual property provides strong ingredients for a legal debate concerning the imposition and enforcement of global injunctions - when the facts are clear - as we move towards areas where ‘natural law’ indicates that most jurisdictions will adopt a comparable view.

The judges in Google v Equustek certainly seem to have been pragmatic when faced with straightforward facts. Their balance of commentary between rights holders and freedom of speech exponents suggests that the Canadian Supreme Court did indeed find a healthy middle ground.

It will be intriguing to see what Google does next and whether the Canadian Court makes good on rethinking the injunction should Google demonstrate a global discrepancy. In the interim, IP is proving to be a valuable test-bed for resolving the rising tensions between the Internet and the law.

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