Facebook, Google and the Supreme Court: Big Decisions for Internet Law

This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.

Internet law is once again about to get its day in Canada’s top court. The Supreme Court of Canada recently granted leave to hear appeals on two issues that will have implications for a number of different areas of internet law:

  1. Can a Canadian court grant a global injunction ordering a foreign-owned and operated search engine to remove certain websites?
  2. If the terms of use of a website stipulate that disputes are to be resolved in a certain jurisdiction, is that enforceable?

We will post updates as the decisions are issued however an overview of each of the cases is included below.

Global Injunctions Against Search Engines

The first case is called Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265 and it involves the British Columbia Court of Appeal upholding a lower court injunction ordering a non-resident corporation, Google Inc., to remove certain websites from its search engine.

Google was not a party to the original litigation. The case involved a group of plaintiffs suing several defendants for misuse of intellectual property (specifically trademark infringement, passing off, and unlawful use of trade secrets). The defendants used various websites to advertise and take orders for industrial network interface hardware that they had created and sold in violation of the plaintiffs’ intellectual property rights.

After pursuing the defendants with limited success, the plaintiffs sought an injunction ordering Google to remove the defendants’ websites.

Google did not have a physical presence in B.C. (no offices, no employees and no servers) but its search services were accessible by any internet user in the province. The British Columbia Supreme Court found that it had jurisdiction over Google and ordered Google to delist several websites related to the infringement.

One issue the Supreme Court will address is whether a court in B.C. has jurisdiction over Google because of Google’s exclusively online activities in the province. The decision may also address whether injunctions of this nature are appropriate, irrespective of location.

Website Terms of Use – Choice of Forum Clause

The second case, Douez v. Facebook, Inc., 2015 BCCA 279, is also an appeal from a decision of the British Columbia Court of Appeal. It involves Facebook’s terms of use, which stipulate that any dispute between Facebook and its users is to be brought “exclusively in a state or federal court located in Santa Clara County,” California.

The plaintiff attempted to have a class action certified in B.C. on behalf of all B.C. residents who had their name or picture used by Facebook in its “Sponsored Stories” advertising. The claim is based on B.C.’s Privacy Act and it asserts that Facebook has violated the statute by using its users’ photos and names without consent.

The trial judge refused to enforce the choice of law provisions. Despite finding that the provision was otherwise clear, valid and enforceable, the trial judge held that the forum selection clause did not extend to claims under the Privacy Act. The court also found that the plaintiff had shown a “strong cause” not to have the forum selection clause enforced against the plaintiff (a “strong cause” being a well-established reason for courts to decline to enforce forum selection clauses). The court’s finding was based primarily on its interpretation of the Privacy Act.

The British Columbia Court of Appeal disagreed with the trial judge’s interpretation of the Privacy Act and overturned the decision of the trial court. The Court of Appeal ruled that the provisions of the Privacy Act should not override the choice of forum clause and that the plaintiff had not established a “strong cause” not to have the choice of forum clause enforced by the court.

The Supreme Court will now deal with the issue and it is anticipated that its decision will provide guidance in the following areas: (a) what is required for a legislature to override a choice of forum clause, and (b) what is required to show a “strong cause” to override choice of forum clauses in the context of the business-to-consumer user agreements that govern millions of online transactions each day.