The Unintended Equustek Effect: a reply to Michael Geist

April 2nd, 2019 by Barry Sookman Leave a reply »

Cyberspace is not a “No Law Land”. That was the title to a study conduced for Industry Canada in 1997. It started with this quote from Bill Gates, Microsoft’s co-founder:

It’s always surprising how old concepts carry into the new medium. It’s overly idealistic to act like, Oh, the Internet is the one place where people should be able to do whatever they wish: present child pornography, do scams, libel people, steal copyrighted material. Society’s values have not changed fundamentally just because it’s an Internet page.

These dark sides of the Internet have increasingly been recognized by governments, the courts, and by the numerous individuals and organizations who have sought justice for criminal, intellectual property, tortious, extremist, and other illegal acts committed using the Internet. Not surprising, the long standing policies of laws to protect their citizens from harms need to adapt to provide remedies commensurate with the gravity and risks of multi-jurisdictional online illegal conduct.

It is with this backdrop that a recent paper written by Michael Geist, The Unintended Equustek Effect: How one case set a precedent for Canadian courts’ growing jurisdiction over internet activities, needs to be critically assessed.

The Equustek decision, Google Inc. v. Equustek Solutions Inc., [2017] 1 SCR 82, arose from a lower court decision that ordered Google to block websites that were selling goods that violated the trade secrets of the plaintiffs. The plaintiffs obtained a injunction order against the defendant. It required it to cease selling products world-wide in breach of confidence. But, the defendant continued to sell the offending goods over the Internet. The plaintiffs, unable to enforce their injunction order, asked for Google’s help in blocking the websites. Google voluntarily de-indexed specific URL’s accessible only from the .ca domain, but this “whac-a-mole” process was ineffective. When Google refused to de-index the offending websites from its search results, the plaintiffs brought a motion against Google for interim relief requiring Google to de-index the websites from all of its search engines worldwide.

Over Google’s objections, in Equustek Solutions Inc. v. Jack 2014 BCSC 1063 Madam Justice Fenlon of the British Columbia Supreme Court granted the de-indexing order. Google unsuccessfully appealed the decision to the British Columbia Court of Appeal in Equustek Solutions Inc. v. Google Inc.,  2015 BCCA 265. Google then appealed the decision to the Supreme Court of Canada which affirmed the decisions below. Importantly the Supreme Court held that:

  • The court had the jurisdiction to make a de-indexing order against the non-party search engine Google.
  • Since the court had personal jurisdiction over Google, it had the jurisdiction to order Google to carry out the search engine de-indexing from wherever it operated its servers, even if outside of Canada.
  • It was appropriate that the de-indexing be worldwide as that was the only way to make it effective including to help enforce the underlying inunction order that itself was world-wide. The only way to ensure that the injunction order attained its objective was to have it apply where Google operated — globally.
  • The de-indexing order was necessary to prevent the irreparable harm that flowed from the defendant’s carrying on business on the Internet.
  • By not de-indexing the defendant’s websites, Google was facilitating the defendant’s breach of the injunction order by enabling it to continue carrying on business through the Internet. Google was aware that in not de-indexing the websites, it was facilitating the defendant’s ongoing breach of the injunction order, the purpose of which was to prevent irreparable harm to Equustek.
  • The order did not require that Google take any steps around the world, it required it to take steps only where its search engine was controlled. This is something Google acknowledged it could do — and does — with relative ease. There was therefore no harm to Google which could be placed on its “inconvenience” scale arising from the global reach of the order.
  • The order did not violate any principle of comity. Google acknowledged that most countries would likely recognize intellectual property rights and view the selling of pirated products as a legal wrong.
  • The order did not violate any freedom of speech rights. It was an order to de-index websites that were in violation of several court orders.
  • Google did not suggest that it would be inconvenienced in any material way, or would incur any significant expense, in de-indexing the defendant websites. It acknowledged that it can, and often does, exactly what was being asked of it in the case,

After it lost its appeal in the Supreme Court, Google subsequently applied to a California court for a declaratory order that the Canadian de-indexing order was not enforceable against it in California. When the action was not defended by Equustek, Google obtained the default declaratory order. Google then applied to a BC court asking it to rescind the prior de-indexing order. This was denied by a B.C. court in Equustek Solutions Inc. v. Jack, 2018 BCSC 610 where Justice Smith held that Google was not able to show that the global delisting order made against it violated its First Amendment rights in the U.S. or the core values of the U.S. or that the California order undermined the effectiveness of the Equustek order.

Geist argues that the Supreme Court of Canada’s decision in Equustek “has emerged as a cautionary tale about increasingly aggressive legal approaches with respect to the Internet.” In particular, he says the experience to date suggests that by opening the door to global takedown orders (which wasn’t the order in Equustek in which a global de-indexing order was made) the ruling:

  • invites and risks protracted global litigation;
  • has contributed to Canadian courts more aggressively asserting jurisdiction over online activities; and
  • has encouraged large internet intermediaries to disregard the rule of law online by placing them in the unenviable position of choosing the laws and court orders they wish to follow.[1]

None of Geist’s arguments about Equustek withstand scrutiny.

Protracted litigation

Geist argues that Equustek has resulted in protracted cross-border litigation. He claims “The most obvious consequence of the Supreme Court’s approach in Equustek was the likelihood of it sparking protracted cross-border litigation, with the further possibility of competing court orders from different jurisdictions.” The only example he gives is the subsequent aggressive litigation instigated by Google itself in California for the declaration that the de-indexing order was not enforceable against it in the U.S. and Google’s unsuccessful attempt to have the order rescinded by a BC court.

Expansion of Equustek

Geist claims that Equustek has contributed to Canadian courts more aggressively asserting jurisdiction over online activities. He states “that the Equustek ruling facilitated an expanded national approach to global internet governance issues, with the likelihood of Canadian courts relying on the decision to expand the applicability of domestic law beyond Canada’s borders.”

His argument fails to recognize that Equustek was merely an evolution of well established prior law and the decisions he refers to were premised much more on this body of existing jurisprudence than on Equustek. Further, the decisions he refers to are the result of new challenges of enforcing laws in this increasingly interconnected world rather than an expansion of law precipitated by Equustek. Moreover, to the extent extra-territorial orders have been made since Equustek, these orders represent a positive and gradual development in global internet governance and the rule of law.

Canadian courts have for a long time adapted our laws related to private international law to ensure that Canadian laws can be enforced extra-territorially to protect the public without breaching any norm of international comity. For example:

  • In Libman v. The Queen, [1985] 2 SCR 178 the Supreme Court recognized that all that is necessary to make a criminal offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. It is sufficient that there be a “real and substantial link” between an offence and Canada.
  • In SOCAN v CAIP [2004] 2 SCR 427 the Supreme Court applied the real and substantial connection test to hold that the Copyright Act right of communication to the public can be infringed if there is a sufficient connection between this country and the communication in question. The SOCAN v CAIP case was followed in the Internet copyright case, Davydiuk v Internet Archive Canada2014 FC 944, and in a competition case, Desjean v Intermix Media, Inc2006 FC aff’d 2007 FCA 365.
  • In Impulsora Turistica de Occidente, S.A. de C.V. v. Transat Tours Canada Inc., [2007] 1 SCR 867 the Supreme ruled that when a court has in personam jurisdiction, and where it is necessary to ensure an injunction’s effectiveness, it can grant an injunction enjoining that person’s conduct anywhere in the world.
  • In Barrick Gold Corp. v. Lopehandia, (2004) 71 OR (3d) 416 (C.A.), the Court of Appeal of Ontario granted a permanent injunction restraining the defendants from disseminating, posting on the Internet or publishing further defamatory statements concerning Barrick or its officers, directors or employees.

It is surprising that Geist’s article did not mention any of these cases, especially as they factored more into the decisions he referred to than the decision in Equustek. Each of the decisions he cites to try and make his case easily fit within long standing precedents, do not involve global orders such as the order in Equustek, and, in fact, represent good decisions as a matter of policy and international governance.

He relies on A.T. v. Globe24h.com where the operator of a foreign website was ordered to remove content that violated the Canadian privacy law, PIPEDA. The defendant was publishing sensitive personal information online on a web site in Romania for the primary purpose of charging individuals to have it removed, a practice the Office of the Privacy Commissioner has labeled as “blackmail” in the OPC Guidance on inappropriate data practices. In reaching its conclusion that PIPEDA could apply extra-territorially, the court relied on the real and substantial connection test and the prior decisions in SOCAN v CAIP, Libman, Davydiuk, Desjean and a prior decision of the Federal Court in Lawson v Accusearch Inc (cob Abika.com), 2007 FC 125 in which the court also relied on the decision in the Libman case. It also merely cited, as an additional case, the BCCA Equustek decision.

The court also considered whether it could grant an injunction against the respondent to correct his practices in order to comply with PIPEDA. The court held that respondent not being a resident of Canada did not bar the making of an extra-territorial order because the underlying dispute was within the jurisdiction of the court. It ordered him to remove all Canadian court and tribunal decisions containing personal information from Globe24h.com and take the necessary steps to remove these decisions from search engines caches.

In making the decision, the court referred to the BCCA Equustek decision for the proposition that “once it is accepted that a court has in personam jurisdiction over a person, the fact that its order may affect activities in other jurisdictions is not a bar to it making an order.” However, the court also referred to the decisions in Impulsora Turistica and Barrick Gold, each of which provided the precedential support for this aspect of the judgment. The court also referred to several well known European cases in holding that “in the context of Internet abuses, courts of many other jurisdictions have found orders that have international effects to be necessary”.

Was the decision an aggressive assertion of jurisdiction over online activities? Hardly. In fact, despite the precedent for website de-indexing in the BCCA Equustek decision, there is nothing to indicate that the court even considered making an order against Google or other search engines to require them to de-index the respondent’s website. Rather, the court took a very restrained approach of granting injunctive and declaratory relief against the perpetrator to “assist the applicant in pursuing his remedies in Romania” and to “allow the applicant and other complainants to submit a request to Google or other search engines to remove links to decisions on Globe24h.com from their search results.” This conservative approach is especially notable having regard to Google’s published policy of not committing to remove content found to be illegal by courts even though this may be the most efficacious way of mitigating harm to individuals. According to the court:

Google is the principal search engine involved and its policy allows users to submit this request where a court has declared the content of the website to be unlawful. Notably, Google’s policy on legal notices states that completing and submitting the Google form online does not guarantee that any action will be taken on the request. Nonetheless, it remains an avenue open to the applicant and others similarly affected. The OPCC contends that this may be the most practical and effective way of mitigating the harm caused to individuals since the respondent is located in Romania with no known assets.

Geist also relies on the decision in College of Optometrists of Ontario et al v. Essilor Group Canada Inc., in which an Ontario court applied Ontario law to prevent a BC based company from dispensing prescription glasses in Ontario. The Colleges alleged that Essilor was in breach of the Ontario regulatory regime by accepting orders for prescription eyewear through websites and shipping the eyewear to patients in Ontario. The Colleges sought a declaration that the company had breached Ontario regulations “by dispensing, for vision or eye problems, subnormal vision devices, contact lenses and/or eye glasses, in Ontario”; and an injunction prohibiting Essilor from engaging in such dispensing except where the dispensing is performed by a Member of the Colleges or a Member’s delegate. The judge at first instance granted the declaration. This decision broke no new ground.

Canadian courts have consistently interpreted provincial statutes to apply to conduct beyond the borders of the province where protecting the public is at stake. The Essilor case was a classic example of a local court applying its own laws to regulate conduct taking place, in part, in its jurisdiction – in this case dispensing of eyeware in Ontario to Ontario residents. This approach to interpreting regulatory regimes to protect the public from conduct that has some extra-territorial connections has been the approach taken by Canadian courts since at least the decision of the Supreme Court in Celgene Corp. v. Canada (Attorney General), [2011] 1 SCR 3. It was applied by the Court of Appeal Ontario in College of Pharmacists v. 1724665 Ontario Inc. (Global Pharmacy Canada), 2013 ONCA 38. The same approach was taken by the British Columbia Court of Appeal in Thorpe v. College of Pharmacists of British Columbia(1992) 97 D L R. (4th) 634 (B.C C.A.) where the court interpreted the scope of the Provincial Pharmacists Act as applying to control conduct beyond the borders of British Columbia where a licensed British Columbian pharmacist was selling drugs to doctors in the United States. This line of cases was the basis of the decision in the Essilor Group case, even though it was at odds with a similar case from Quebec,  Ordre des optométrists du Québec c. Coastal Contacts Inc.2016 QCCA 837, leave to appeal to S.C.C. refused, 2017 CanLII 442 (SCC). Equustek was referred to by the court, but only for the uncontroversial proposition that “the courts’ intention to see that their rulings are effective.”

After Geist published his article, the Essilor decision was reversed by the Court of Appeal of Ontario in College of Optometrists of Ontario v. Essilor Group Inc., 2019 ONCA 265. While the court agreed that Essilor was dispensing eyeware in Ontario, it held the Ontario regulatory scheme was not constitutionally applicable to its online sales as the mere delivery in Ontario of an order for prescription eyewear that had been processed in compliance with the British Columbia regulatory regime, without more, did not establish a sufficient connection between Essilor’s online sales and the controlled acts proscribed by the Ontario regulations.

In its reasons the Court of Appeal rejected the application of the Celgene and Equustek cases to show that a sufficient connection existed to support the application of the Ontario regulations. As for Equustek the court stated:

Finally, the issue in the Google case was whether a British Columbia court had the jurisdiction to issue an interlocutory injunction enjoining Google from displaying any part of a defendant’s websites on any of its search results worldwide in order to give effect to an earlier court order directing the defendant to cease carrying on business through any website. Google contested the jurisdiction of the court to make such an order on two grounds: (i) the order affected a non-party to the litigation; and (ii) the court could not issue an injunction that had extraterritorial effect. The Supreme Court upheld the injunction. Although its decision commented on the new reality of online commerce and advertising, the court upheld the injunction based on the existing jurisprudence that interlocutory injunctions could bind non-parties and have extraterritorial effect where the issuing court had in personam jurisdiction over the defendant: at paras. 28 and 36-38. (emphasis added)

Geist also relies on the decision in Autorité des marchés financiers v. PlexCorps, 2017 QCTMF 88 in which the Quebec Financial Markets Administrative Tribunal granted an injunction against the operator of several websites and a Facebook page to prevent the violation of Quebec securities laws to residents in Quebec and to residents outside of Quebec originating from inside Quebec. This application of a Province’s securities laws to conduct with a real and substantial presence to the Province has also long been recognized by the courts including by the British Columbia Court of Appeal in Torudag v. British Columbia (Securities Commission), 2011 BCCA 458, which based its decision, in part, on the decision of the Supreme Court in the SOCAN v CAIP case. In fact, the appropriateness of applying a Province’s securities laws to protect the public outside of the Province was confirmed by the Supreme Court almost 50 years ago in Gregory & Company Inc. v. The Quebec Securities Commission [1961] S C R. 584.

The fact that the securities traded by appellant would be for the account of customers outside of the province or that its weekly bulletins would be mailed to clients outside of the province, does not, as decided in the Courts below, support the submission that appellant was not trading in securities or acting as investment counsel, in the province, within the meaning and for the purposes of the Act Respecting Securities.

The paramount object of the Act is to ensure that persons who, in the province, carry on the business of trading in securities or acting as investment counsel, shall be honest and of good repute and, in this way, to protect the public, in the province or elsewhere, from being defrauded as a result of certain activities initiated in the province by persons therein carrying on such a business.

In PlexCorps, the Tribunal also ordered Facebook to remove the offending Facebook pages. The court did refer to the decision in Equustek in making the order, but there was no suggestion that the jurisdiction to grant the order would not have existed without Equustek. In fact, it is well established that courts can make orders against third parties to prevent them from facilitating the breach of court orders. In Equustek the Supreme confirmed this to be the law referring approvingly to prior cases including its own case MacMillan Bloedel Ltd. v. Simpson,  [1996] 2 S.C.R. 1048 and the decision of the Court of Appeal in Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2016] EWCA Civ 658 (06 July 2016), a decision on jurisdiction subsequently approved by the UK Supreme Court.

The last case relied on by Geist is the decision of the British Columbia Court of Appeal in British Columbia (Attorney General) v. Brecknell. In this case the Court ordered Craigslist to provide contact information about an individual who had made a post under the Criminal Code provisions related to production orders. Geist claims that the Court of Appeal “issued the order, drawing on the court’s willingness in Equustek to adapt the rules to reflect the jurisdictional challenges of the internet.”  This is not correct.

The Court’s decision in Brecknell was premised on several important policy considerations including ensuring that where courts have personal jurisdiction over a person the arbitrary location of a computer server cannot be determinative;[2] Parliament’s intention to modernize police powers to investigate Canadian crime that is increasingly occurring through the Internet;[3] the need to interpret legislation in light of contemporary technology and to take into account the changed technological environment to which it must be applied;[4] and because a principled and effective system of legitimate investigation based on international norms should not be contingent on business decisions taken by service providers in their own private interests.[5]

The court also relied on a long line of U.S. authorities that supported its decision,[6] as well as a decision of the Federal Court of Appeal in eBay Canada Ltd. v. Canada (National Revenue), 2008 FCA 348 in which a production order was made against eBay under the Income Tax Act, in part in reliance on the need to interpret legislation in light of contemporary technology, as taught by the Supreme Court in the Libman and SOCAN v CAIP cases.[7]

The only reliance on Equustek in Brecknell was the well established principle referred to in BCCA Equustek that difficulties in enforcing a court order does not deprive the court of jurisdiction to issue it.

Increasing power of internet intermediaries

Geist argues that Equustek entrenches Google and other large social media companies with the choice of deciding which court orders they should give effect to and which they can simply ignore and encourages them to disregard the rule of law. He says:

The Supreme Court’s Equustek ruling may also have inadvertently vested increased power in the hands of internet intermediaries, who could leverage the legal uncertainty and conflict to self-select which laws would govern their activities…

The internet is often characterized as a “Wild West” where laws cannot be easily applied. Yet, the danger of extraterritorial application of court decisions — such as those involving Google — is that it encourages disregard for the rule of law online, placing internet companies in the unenviable position of choosing the laws and court orders they wish to follow.

Despite Google’s disagreement with the Equustek de-indexing order made against it, it did not decide to unilaterally flout the court order and face contempt of court sanctions. Rather, it used the courts to try, unsuccessfully, to get the Equustek order rescinded.  This was the same approach taken by Yahoo years ago when it sought to extricate itself from a decision of a French court that ordered it to cease making available objects for sale bearing Nazi symbols in violation of French laws. It applied, unsuccessfully, to a U.S. court in the Yahoo II case for a declaration that the order could not be enforced against it in the U.S..

There is no doubt that companies that operate globally are faced with the challenge of complying with the laws and court orders of their home countries as well as the laws in which they do business. But, this is not a flaw in our system of private international law. It arises from the business model of companies that carry on business globally. This was a finding made by Chambers Judge Fenlon who held that the BC courts had personal jurisdiction over Google in the Equustek case.

I will address here Google’s submission that this analysis would give every state in the world jurisdiction over Google’s search services. That may be so. But if so, it flows as a natural consequence of Google doing business on a global scale, not from a flaw in the territorial competence analysis. As Janet Walker writes in Castel & Walker: Canadian Conflict of Laws, loose-leaf, 6 ed (Markham, Ontario: LexisNexis, 2005), ch 11 at 27, a legal person such as a corporation can be subject to multiple jurisdictions whether because it is resident there through registration, or because it is carrying on business in that jurisdiction. Further, the territorial competence analysis would not give every state unlimited jurisdiction over Google; jurisdiction will be confined to issues closely associated with the forum in accordance with private international law.

It is also true that companies that operate globally are increasingly faced with deciding what standards to apply to take down illegal or offensive content. This problem was recently adverted to by Facebook’s Mark Zuckerberg who in an open letter published in major newspapers around the world argued for regulation of social media companies to establish global minimal standards for content takedowns. He rightly pointed out that “decisions about what speech is harmful, what constitutes political advertising, and how to prevent sophisticated cyberattacks” shouldn’t only be made by large social media companies. Rather, by “updating the rules for the internet, we can preserve what’s best about it — the freedom for people to express themselves and for entrepreneurs to build new things — while also protecting society from broader harms.” Even this proposal has its critics, would still require social networks to monitor compliance around the world, and wouldn’t prevent nation states from enforcing their own norms embodied in local laws or prevent the fragmentation of the Internet.

But, Geist’s suggestion that companies like Google should be free to “selectively” determine, as if they are above the rule of law, what orders made by courts in which they do business can simply be ignored or flaunted, offends well established rules of private international law upon which our civilized international order relies.

The rules of private international law establish norms which limit the types of orders nations can make to ensure conformance to principles of international comity. The decisions by the Supreme Court in Libman,[8] SOCAN v CAIP,[9] and Equustek[10]were only rendered after considering the appropriateness of the decision having regard to this norm and to avoid untoward conflicts in laws.

Private international law also establishes principled frameworks for determining, as a matter of comity, when a foreign judgment should and should not for policy reasons be enforced locally.[11]

While these principles may not be uniform from country to country, they do exist and act to restrain courts from making orders that may offend principles of comity and provide a mechanism to insulate persons from complying with orders that may offend the laws or policies of their home countries.

Of course, companies like Google are always free to oppose orders against them that have extra-territorial effects and then seek to have such orders found not to be enforceable against them in the U.S. as a matter of U.S. public policy, as Google did in the Equustek case. But, as offensive as even that is to civilized courts like those in Canada which rigorously apply principles of international comity before making such orders, that process is not the same as Geist’s suggestion that they can simply decide to ignore such orders.

The Larger Context

What is maddeningly frustrating about Geist’s article – besides his inaccurate assertions about the effects of Equustek – is the failure to acknowledge in an article on global Internet governance  of the need, in at least some circumstances, for laws and court orders to apply extra-territorially. In fact, as we have learned increasingly, information once available over the Internet and, in particular, through large social networks like Facebook and UGC sites like YouTube, can facilitate unfathomable harms that are at once both local and global.

The mass murder in Christchurch, New Zealand is only the most recent case in point. Supremacist extremism was propagated through social media networks which contributed to an environment that promoted and may have inspired the massacre.  Live streaming the events over Facebook and other platforms like YouTube further fanned the flames of extremism.

In this case, the platforms took steps to remove or disable access to the content and local ISPs voluntarily blocked Internet locations such as Reddit which had refused to disable access to the content. In the opinion of many commentators it took them far too long to act. There seems little doubt, however, that had these intermediaries not acted voluntarily a court in New Zealand would have ordered them to do so. In a recent Australian case, for example, X v Twitter Inc, a court granted a global takedown order against Twitter to prevent publication of information that was being published by a third party in breach of confidence, relying on many of the same legal principles the Supreme Court relied on in Equustek.

The events of Christchurch has provided further evidence of the need for global regulatory frameworks to address illegal, dangerous and inaccurate information disseminated via the Internet. Moreover, it crystalized the growing international frustration and anger over the failure of Silicon Valley giants to act responsibly to address harmful content, all the while fighting jurisdiction over them in the courts around the world and liability for illegal and objectional conduct their networks help make available including everything from terrorism propaganda, hate speech, child pornography, fake political news, defamation, and copyright infringement.

While there has been many calls for regulation of Internet platforms as well as a recognition that the Internet cannot be a “Wild West”, as a result of the mass shooting in Christchurch, the government of Australia announced it is introducing legislation that would fine social media companies that don’t expeditiously remove abhorrent violent content. If found guilty, a company can not only face fines of up to 10 percent of their annual turnover, but their executives can be imprisoned for up to three years. Australia’s action indicates that global regulators increasingly want to treat technology platforms like they do more traditional media companies.

The magnitude of the potential fine – the same as what can be levied for breach of Europe’s GDPR data protection laws – is a clear signal that countries outside the U.S. are now starting to demand compliance with the local rules of law and will no longer countenance non-compliance as a mere cost of doing business.

The Internet has changed the way we live, work and communicate with each other and the world. The Internet is now 30 years old and its about time theories about Internet governance caught up. Even the fathers of the Internet Vince Cerf[12] and Sir Tim Berners-Lee[13] are now calling attention to the problems and have acknowledged that new regulatory governance frameworks are needed to deal with the emergent global threats.

In the face of these threats, we need to recognize the importance of nations and their courts determining what is necessary to protect their citizens. Given the global threats from online sources, this will necessarily have to involve some continued evolution of extra-territorial application of local laws and court orders to address these threats. It will also involve a closer inspection of how things happen on the Internet, something courts including the U.S. Supreme Court in South Dakota v Wayfair and our Supreme Court in Equustek have recently been willing to engage in.

Notions of international comity will also have to evolve, preferably through a consensus that sets out the appropriate balance for the assumption of personal, prescriptive and adjudicative jurisdiction including the norms for when courts can make orders that have extra-territorial effects and when they should be recognized by courts in other countries. In the absence of international agreement, where harms emerge lawmakers and the courts will, of necessity, have to evolve approaches to Internet harms to maintain the rule of law online.

Concluding Remarks

Geist’s claims about Equustek having unintended adverse consequence have not be substantiated. In fact, the cases he refers to in support of his claims illustrate the application of well established legal principles to address situations arising from the use of the Internet to commit illegal acts. These developments in the law are positive and hardly exemplify developments to be concerned about.

The most serious flaw in Geist’s article, however, is the abject failure to recognize or even consider the need for nations to protect their sovereignty and to enforce their laws both locally and extra-territorially in accordance with evolving principles of jurisdiction and comity, especially where the nation has a real and substantial interest to the harm. It is not clear why a senior fellow in the Centre for International Governance Innovation (CIGI) International Law Research Program (and a Canada Research Chair in Internet and E-commerce Law), in a paper published by CIGI, would simply ignore the need for online remedies to evolve to attempt to counteract new Internet harms when considering the implications of Equustek on the subject of online remedies and Internet governance. CIGI is an international think tank devoted to international governance issues and so the issues canvassed by Geist would be of keen interest to CIGI. Notably, CIGI does not necessarily endorse the views expressed by Geist in his article as its website contains a disclaimer that the opinions expressed in the article “are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors”.

The challenges posed by the Internet to questions of Internet governance, jurisdiction and comity do not admit of easy answers. However, while there can be potential challenges with every country seeking to apply its laws extra-territorially – particularly in the absence of any real or substantial connection to the claim – there is every reason to be concerned about a theory of Internet governance that would deny a nation the legal tools it needs to protect the public including by providing for effective legal remedies for multi-jurisdictional harms.

The Internet is not a “No Law Land”. Our theories about the appropriate legal tools to deal with online global harms including the enforcement of orders online need to reflect this.

* Updated April 7, 2019

—————————————————————

[1] Geist’s claims:

“Equustek Solutions v. Google Inc., a case that originated in British Columbia, Canada, in 2014, captured international attention as one of the first internet jurisdiction cases to be considered by a nation’s highest court. Since then, the case has emerged as a cautionary tale about increasingly aggressive legal approaches with respect to the Internet, with significant implications for online governance.”

“While critics of global takedown orders warned that upholding the validity of the order would invite global uncertainty through inevitable legal conflicts and further empower large internet intermediaries who could selectively choose which laws and orders to follow, the aftermath of the decision has placed the spotlight on an additional consequence. In part due to the Equustek doctrine, Canadian courts now more aggressively assert jurisdiction over online activities. Indeed, Canada could emerge as ground zero for internet litigation, with its courts and tribunals at ease with a principle that extends domestic law to an international arena.”

“The decision may have stopped short of creating a new liability framework, but it did open the door to three internet-related legal risks that strike at the heart of global internet governance: protracted litigation; increased power for internet intermediaries; and expansion of the Equustek approach to a broad range of legal disciplines.”

“In other words, Canadian courts are increasingly comfortable issuing orders involving internet platforms that may be difficult to enforce, given the global dimensions of the network, and adopting an approach where challenges associated with enforceability are not treated as a legal barrier. While some may applaud that approach, the proliferation of largely unenforceable court orders may ultimately undermine respect for the application of law online.”

“The internet is often characterized as a “Wild West” where laws cannot be easily applied. Yet, the danger of extraterritorial application of court decisions — such as those involving Google — is that it encourages disregard for the rule of law online, placing internet companies in the unenviable position of choosing the laws and court orders they wish to follow.”

“While critics of global takedown orders warned that upholding the validity of the order would invite global uncertainty through inevitable legal conflicts and further empower large internet intermediaries who could selectively choose which laws and orders to follow, the aftermath of the decision has placed the spotlight on an additional consequence. In part due to the Equustek doctrine, Canadian courts now more aggressively assert jurisdiction over online activities.”

[2] Brecknell “It is by no means clear to me what it means to say that a person has a custodial or record-keeping presence in the jurisdiction, particularly in a digital age where information can be instantly transmitted by a click of a mouse. Certainly, a custodial presence is not synonymous with a physical presence. A company may have offices or employees in the jurisdiction whose function is entirely unrelated to record keeping or exercising custody over documents. Moreover, the function of record keeping and exercising custodial authority are not necessarily the same thing and may be functions exercised in different locations. The authority to require the retrieval of documents may reside in one location, the act of retrieving them may be possible in various locations, and the documents may be stored yet somewhere else. Finally, the location of documents may bear little or no relation to the business activity that generates them. As Mr. Macklin observed, cheap warehousing of data may lead to storage outside the country. It is not obvious that Parliament intended jurisdiction in relation to the employment of this investigative tool to depend on such contingent, haphazard, happenstance resulting from the variable internal structures of businesses. Having said this, I recognize that in this case it is part of the reality that Craigslist has offices in California to which an order for documents needs to be transmitted and from which it can be implemented. The question is whether this fact is decisive to deprive a British Columbian court from issuing a production order in the first place…

In the second place, in the Internet era it is formalistic and artificial to draw a distinction between physical and virtual presence. Corporate persons, as I have noted, can exist in more than one place at the same time. With respect, I do not think anything turns on whether the corporate person in the jurisdiction has a physical or only a virtual presence. To draw on and rely on such a distinction would defeat the purpose of the legislation and ignore the realities of modern day electronic commerce. Moreover, the current facts illustrate the doubtful relevance of the distinction. Craigslist’s virtual presence is closely connected to the circumstances of the alleged offence, because at least some elements of the alleged offence were facilitated by relying on the services Craigslist provides virtually. In terms of the alleged offence, any physical presence Craigslist may have in the jurisdiction is beside the point. A corporate entity’s physical presence may have nothing to do with the circumstances of an offence. In my view, it would be curious if the presence of a retail outlet which is totally unrelated to the acquisition of information sought by a production order would ground a jurisdiction that did not otherwise exist.”

[3] Brecknell “There is, however, another way of looking at the issue, which in my view accords with Parliament’s legislative intent to modernize police powers to investigate Canadian crime that is increasingly occurring through the Internet or about which evidence exists in an international electronic world. On this view of the matter, the order goes against a person present in the jurisdiction and in effect commands that person to do certain things, namely to retrieve documents. It does not directly involve entry into a place by state agents who are authorized to search and seize property. The location of the documents is irrelevant to the essence of the order. What matters in terms of the invasion of privacy is the disclosure or production of the documents rather than access to them where they are stored. The impact on the privacy interest is not specific to a place and the existence of that interest has no direct relevance to whether the order has an extraterritorial reach. Indeed, the Supreme Court of Canada in R. v. Marakah2017 SCC 59 (CanLII), may be seen as having deemphasized the importance of physical place or geographic location in relation to searches with the majority placing emphasis on what is searched. In that case the search was treated as being of a text conversation, not necessarily the phone on which it was memorialized. Similarly, the private information produced through the production order is information generated in relation to postings that happen to be in British Columbia, although memorialized elsewhere. The territorial dimension of place in both contexts may be seen as being significantly attenuated.”

[4] Brecknell “I accept that legislation must be interpreted in light of contemporary technology and take into account the changed technological environment to which it must be applied. That imperative applies in the context of criminal investigation in the digital world and colours the analysis of whether a particular investigative technique has impermissible extraterritorial effects. The reality is that criminal activity involving such matters as human trafficking, child pornography, money laundering, commercial fraud and international terrorism conducted by means of electronic communication can be insulated from investigation if a production order is viewed as being implemented where the data is stored and its issuance is, therefore, impermissibly extraterritorial. Such a result is an open invitation to criminals to hide their activity targeting this jurisdiction by ensuring that information about their communications is stored in another. The MLAT may offer little by way of viable alternative investigative techniques for several reasons. Many countries are not parties to a treaty with Canada. Depending on local law, even if a country is a party, the information may be inaccessible if it is stored outside that country in a non participating jurisdiction. It also seems reasonably clear that the MLAT provides a slow and uncertain mechanism of investigation in an era when information moves instantaneously and may be stored only for a short time.”

[5] Brecknell “Additionally, I do not think that a principled and effective system of legitimate investigation based on international norms should be contingent on business decisions taken by service providers in their own private interest. It is notorious that service providers move customer information around the world frequently, no doubt for entirely legitimate commercial reasons, and it seems frequently break up data storing it in a variety of different places. The result may be the effective, if unintended, frustration of investigation into serious criminal conduct.”

[6] Brecknell  “I take some comfort in approaching the matter in this way, since there appears to be a well-established line of appellate authority in the United States that recognizes the intraterritorial validity of subpoenas directed to persons in the United States over whom there is personal jurisdiction to disclose documents in the United States even where they must be obtained from overseas. In this respect, see for example: Marc Rich & Co. v. United States, 707 F.2d 663, at 668‑670 (2d Cir. 1983), cert. denied, 463 U.S. 1215 (1983); United States v. Bank of Nova Scotia,740 F.2d 817, at 820‑821, 826‑829 (11th Cir. 1984); In re Sealed Case, 832 F.2d 1268, at 1270, 1283‑1284 (D.C. Cir. 1987); Securities and Exchange Commission v. Minas de Artemisa, S. A., 150 F.2d 215, at 216‑218 (9th Cir. 1945); Hay Grp., Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, at 412 (3d Cir. 2004). Moreover, this view of the matter was taken by certain of the dissenting justices on the petition for a rehearing of theMicrosoft Ireland case itself.

I take additional comfort from the fact that if a substantial body of United States authority does not treat a subpoena issued to a person in the United States to disclose documents in the United States although retrieved from another country as an extraterritorial exercise of jurisdiction, then the suggestion that the interpretation of the section I offer is inconsistent with principles of international comity tends to lose force. If the authority to which I have referred does represent settled judicial opinion, it seems unlikely that a court in the United States would regard this order directed to Craigslist as a violation of sovereignty.”

[7] Brecknell “The closest applicable authority is eBay Canada Ltd. v. Canada (National Revenue)2008 FCA 348 (CanLII). In that case, information identifying Canadian eBay sellers was stored as electronic records on servers in the United States owned by eBay Inc. (“eBay U.S.”), but was compiled and maintained by a Swiss corporation that was a wholly owned subsidiary of eBay U.S. An application was made under s. 231.2 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), for production of the customer information. The issue before the court was whether the information was “foreign-based” because it was “available or located outside Canada” and should, therefore, fall under s. 231.6, despite the fact that the appellants, Canadian corporations, had been authorized to access it in Canada for use in their business, but did not download it to their computers.

The facts and the section at issue in the eBay case are different from this case, but the Court had little apparent difficulty in concluding that information stored on servers outside Canada was not foreign-based information since is was readily available to the appellants within Canada who were authorized to access it. Some of what the Court said is however relevant to the issues before us. Hence:

[17]      In reaching this conclusion, Justice Hughes observed that, since electronically stored information relating to PowerSellers was readily, lawfully, and instantaneously available in a variety of places to eBay entities, including to the appellants in Canada, the location of the servers on which it was stored was irrelevant (2007 FC 930 (CanLII), at para. 23). He relied on judicial descriptions of telecommunications from a foreign State to Canada, and vice versa, as being “both here and there” (see Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers2004 SCC 45 (CanLII), [2004] 2 S.C.R. 427, at para. 59 (SOCAN)) …

***

[40]      Counsel for the appellants says that, as a matter of law, information in electronic form stored on a server is “located” where the server is situated and, until downloaded or printed, is not located anywhere else. He argues that the fact that information is “available” in another country to those who have access to the server through their computers is not sufficient to make it “located” in that other country for the purpose of section 231.6.

[42]      I agree that neither SOCAN nor Libman v. The Queen1985 CanLII 51 (SCC), [1985] 2 S.C.R. 178, another telecommunications case, is directly analogous to the question in issue here. More important, however, SOCAN instructs courts to interpret legislation in light of contemporary technology and, if necessary, to “transpose” its terms to take into account the changed technological environment in which it is to be applied.

[48]      This is because, with the click of a mouse, the appellants make the information appear on the screens on their desks in Toronto and Vancouver, or anywhere else in Canada. It is as easily accessible as documents in their filing cabinets in their Canadian offices. Hence, it makes no sense in my view to insist that information stored on servers outside Canada is as a matter of law located outside Canada for the purpose of section 231.6 because it has not been downloaded. Who, after all, goes to the site of servers in order to read the information stored on them?

[49]      Nor is the extraterritorial application of the Act a significant issue on the present facts. For example, the agreements with eBay Canada expressly provide that they may disclose confidential “eBay System Information” (which the appellants say includes information about PowerSellers) which “is required to be disclosed by order of any court”: appeal book, Vol. II, at pages 295‑296. Nor does the requirement oblige a person outside Canada to do anything.

[8] “As I have already noted, in some of the early cases the English courts tended to express a narrow view of the territorial application of English law so as to ensure that they did not unduly infringe on the jurisdiction of other states. However, even as early as the late 19th century, following the invention and development of modern means of communication, they began to exercise criminal jurisdiction over transnational transactions as long as a significant part of the chain of action occurred in England. Since then means of communications have proliferated at an accelerating pace and the common interests of states have grown proportionately. Under these circumstances, the notion of comity, which means no more nor less than “kindly and considerate behaviour towards others”, has also evolved. How considerate is it of the interests of the United States in this case to permit criminals based in this country to prey on its citizens? How does it conform to its interests or to ours for us to permit such activities when law enforcement agencies in both countries have developed cooperative schemes to prevent and prosecute those engaged in such activities? To ask these questions is to answer them. No issue of comity is involved here. In this regard, I make mine the words of Lord Diplock in Treacy v. Director of Public Prosecutions cited earlier. I also agree with the sentiments expressed by Lord Salmon in Director of Public Prosecutions v. Doot, supra, that we should not be indifferent to the protection of the public in other countries. In a shrinking world, we are all our brother’s keepers. In the criminal arena this is underlined by the international cooperative schemes that have been developed among national law enforcement bodies.

For these reasons, I have no difficulty in holding on the facts agreed upon for the purpose of this appeal, that the counts of fraud with which the appellant is charged may properly be prosecuted in Canada, and I see nothing in the requirements of international comity that would dictate that this country refrain from exercising its jurisdiction. Since these fraudulent activities took place in Canada, it follows for the reasons set forth in the Chapman case that the conspiracy count may also be proceeded with in Canada.”

[9] “The “real and substantial connection” test was adopted and developed by this Court in Morguard Investmentssupra, at pp. 1108-9; Hunt v. T&N plc1993 CanLII 43 (SCC), [1993] 4 S.C.R. 289, at pp. 325-26 and 328; and Tolofsonsupra, at p. 1049.  The test has been reaffirmed and applied more recently in cases such as Holt Cargo Systems Inc. v. ABC Containerline N.V. (Trustees of), [2001] 3 S.C.R. 907, 2001 SCC 90 (CanLII), at para. 71; Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 S.C.R. 205, 2002 SCC 78 (CanLII)Unifundsupra, at para. 54; and Beals v. Saldanha, [2003] 3 S.C.R. 416, 2003 SCC 72 (CanLII).  From the outset, the real and substantial connection test has been viewed as an appropriate way to “prevent overreaching . . . and [to restrict] the exercise of jurisdiction over extraterritorial and transnational transactions” (La Forest J. in Tolofsonsupra, at p. 1049).  The test reflects the underlying reality of “the territorial limits of law under the international legal order” and respect for the legitimate actions of other states inherent in the principle of international comity (Tolofson, at p. 1047).  A real and substantial connection to Canada is sufficient to support the application of our Copyright Act to international Internet transmissions in a way that will accord with international comity and be consistent with the objectives of order and fairness.”

[10] “ Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction is, with respect, theoretical. As Fenlon J. noted, “Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong”.[6]

And while it is always important to pay respectful attention to freedom of expression concerns, particularly when dealing with the core values of another country, I do not see freedom of expression issues being engaged in any way that tips the balance of convenience towards Google in this case. As Groberman J.A. concluded:

In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation. 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. The order made against Google is a very limited ancillary order designed to ensure that the plaintiffs’ core rights are respected.

. . . the order in this case is an interlocutory one, and one that can be varied by the court. In the unlikely event that any jurisdiction finds the order offensive to its core values, an application could be made to the court to modify the order so as to avoid the problem.[7]If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly. To date, Google has made no such application.

In the absence of an evidentiary foundation, and given Google’s right to seek a rectifying order, it hardly seems equitable to deny Equustek the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible. We are dealing with the Internet after all, and the balance of convenience test has to take full account of its inevitable extraterritorial reach when injunctive relief is being sought against an entity like Google.

This is not an order to remove speech that, on its face, engages freedom of expression values, it is an order to de-index websites that are in violation of several court orders. We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.”

[11] See, Barry Sookman US court thumbs its nose at Supreme Court of Canada: Google v Equustek, where I summarized the applicable principles in Canada and the U.S.

[12] See, the article by “the father of the Internet” Vinton Cerf writing about the problem with fake news, Vinton Cerf, “Vint Cerf: In 2018, we will tackle the Internet’s dark side” Wired, Jan 6, 2018, http://www.wired.co.uk/article/vint-cerf-internet-free-speech-censorship-fake-news. “The empowerment of individuals has been nothing short of exhilarating – but now we are starting to see the consequences. Freedom to speak has never been more available, but in the resulting babel, truth is obscured by manufactured falsehoods, misrepresentations, fake news, alternative facts and a medley of other phenomena.  In 2018 we will see a significant reaction to these side-effects and will grasp the nettle of how to balance free speech with an open Internet…

So here is the conundrum for our increasingly connected world: how do we stay aware of what is going on in the world and in the minds of its citizens while seeking to limit the pernicious consequences of unbridled freedom to spew hatred, falsehoods and society-damaging ideologies? How do we instil a capacity for critical thinking in our citizens so they can winnow wheat from chaff?  Is critical thinking sufficient defence against the digital acid rain that threatens to poison the ocean of useful online information?  These are the questions that should be at the front of our minds in 2018.” Also: Google Evangelist Vinton G. Cerf: “We should be looking both ways before we log onto the Internet” Dec. 20, 2018 “Mr. Cerf also believes that global regulatory measures can improve our interactions on the Internet. “At this point, we are seeing both the positive and the negatives sides of this online environment with the negative becoming much more visible and apparent. And that causes us to desire better governance principles and better governance mechanisms. And those need to be international in scope. The reason for this is that the harms that can occur can be originated in one jurisdiction and the victim can be in another. That means we are going to have to cooperate with each other in order to protect people from harm on the net.”

[13] Sir Tim Berners-Lee “The web is under threat. Join us and fight for it. – World Wide Web Foundation”, https://webfoundation.org/2018/03/web-birthday-29/ “The threats to the web today are real and many, including those that I described in my last letter — from misinformation and questionable political advertising to a loss of control over our personal data…

What’s more, the fact that power is concentrated among so few companies has made it possible to weaponise the web at scale. In recent years, we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data.

We’ve looked to the platforms themselves for answers. Companies are aware of the problems and are making efforts to fix them — with each change they make affecting millions of people.  The responsibility — and sometimes burden — of making these decisions falls on companies that have been built to maximise profit more than to maximise social good. A legal or regulatory framework that accounts for social objectives may help ease those tensions.”

 

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