Google, B.C. company in global e-commerce wrangle

Internet censorship, corporate IP integrity at core of Supreme Court trademark fight

When a competitor steals your intellectual property and starts selling it as his, you hire a lawyer, go to court and get an injunction – possibly even a sizable award for trademark or patent infringement.

But what happens when your competitor flouts court orders, goes underground – continually morphing and moving – and continues to sell a knockoff of the proprietary product you developed?

That’s the dilemma the courts and Vancouver industrial automation technology maker Equustek Solutions Inc. wrestled with when a former distributor, Morgan Jack of Datalink Technologies Gateways, also based in Vancouver, allegedly partnered with a former Equustek engineer to develop and sell a counterfeit product, in violation of Equustek’s trademark.

The allegations have not been proved in court, and a civil action is still pending. But the courts have recognized the violation of Equustek’s intellectual property rights and Jack did not stick around to defend himself.

He disappeared, and yet he apparently continues to sell the Equustek clone online.

Despite multiple cease-and-desist orders issued by the courts, Jack/Datalink simply went underground and continued to sell the device – an industrial automation controller called the GW1000 – online via multiple websites. So Equustek went after the one entity that has the power to shut down a scofflaw whose only conduit to customers appears to be an IP address: Google (Nasdaq: GOOGL).

The BC Supreme Court sided with Equustek and in 2014 ordered Google to de-index Datalink websites so people could not find them through Google searches.

In her 2014 ruling, Justice Lauri Ann Fenlon characterized Google as “an innocent bystander but it is unwittingly facilitating the defendants’ ongoing breaches of this Court’s orders.”

She also noted that, at one point, Google not only unwittingly facilitated searches for Datalink, but entered a contract with Datalink to advertise its product – something it halted when it became aware of the allegations of trademark infringement.

Google, which had initially voluntarily removed some Datalink URLs, balked at Equustek’s insistence that every iteration of Datalink’s continually morphing sites be made unsearchable worldwide and appealed the decision. The Appeal Court upheld the lower court decision, Google appealed that, and now the case is going to the Supreme Court of Canada.

It’s a case civil libertarians and open Internet advocates will be watching carefully because it raises concerns about the free and open Internet.

The case raises an interesting question: Should a court in one country (Canada) be able to order a company based in some other country (Google in the U.S.) to filter or block websites of another company (Datalink) based God-knows-where in cyberspace?

Meghan Sali, a spokeswoman for Vancouver-based Internet watchdog OpenMedia, which has been named an intervener in the case, said her organization is not taking sides in the case.

She said there might be valid cases in which Internet companies like Google or social media sites can or should be legally obliged to remove things from the Internet or make them unsearchable – child- or revenge-porn sites, for example.

But the organization will urge the court to tread carefully and consider the wider implications when ordering an Internet company to censor what’s on the Internet.

OpenMedia hopes to see the Supreme Court come up with a test that other courts might follow when issuing website take-down orders.

“When courts do make these injunctive relief orders … they should have to consider the implications for freedom expression before they do that,” Sali said.

The fear is that other countries with less regard for freedom of expression might seize on a Canadian precedent to order Internet companies to censor things on the Internet that they consider objectionable.

With the case coming before the Supreme Court in December, neither Equustek nor its lawyer wanted to be quoted, but confirmed that the financial losses in potential sales for Equustek are substantial.

David Edinger, a partner with Singleton Urquhart LLP, has written about the case. He said it is “pretty unique” and does not see a takedown order for a specific case to have wider implications for Internet censorship.

Edinger cites copyright laws that protect artists’ rights as an analogue to the Equustek case.

If a film studio produces a film, and someone pirates it and, without permission, posts it on a website somewhere for profit it would be reasonable for the copyright owner to ask that the site be removed.

Google has argued that B.C. courts have no jurisdiction over Google and that Equustek should have gone to court in California, where it is based.

But as Fenlon pointed out, the de-indexing Equustek is asking for would extend beyond North America’s borders, because it would mean no one in any country would be able to search for the Datalink knock-off.

“If the order involves worldwide relief, a California court will be no more appropriate a forum than British Columbia to make such an order,” she wrote.