Two recent appeal-level decisions, one by the British Columbia Court of Appeal, the other by the Federal Court of Appeal, have created powerful new remedies for intellectual property owners faced with online infringement of their rights. This bulletin summarizes both decisions, and suggests how they can be harnessed by intellectual property owners enforcing their rights online.
British Columbia Court of Appeal Orders Google to De-list Sites Providing Infringing Content
Equustek Solutions v Google Inc, 2015 BCCA 265, involved an injunction requiring Google to de-list certain websites which sold infringing products. Equustek had previously obtained a default judgment against the defendants who manufactured these infringing products, but the defendants ignored the judgment and continued to sell infringing products to Canadian customers. These sales were made through the defendants' websites, which were easily accessible using Google's search engine.
Following the default judgment, Google had voluntarily "de-listed" individual webpages on the defendant's websites, which meant that these pages would no longer appear on Google search results. However, the defendants could easily create new webpages, and Google would only de-list webpages for searches conducted through the google.ca domain, and not google.com or any other domain. As a result of these limitations on Google's voluntary de-listing policy, the defendants continued to evade Equustek's enforcement efforts.
To put an end to the defendant's infringing activities online, Equustek successfully obtained an injunction from the British Columbia Supreme Court ordering Google to de-list all websites owned by the defendants, both at the time the order was issued, and as new websites were discovered. The de-listing was ordered to apply to all Google search sites, not just the google.ca site.
Google appealed this order, arguing that British Columbia courts lacked jurisdiction over it, that they could not issue injunctions against third parties who were not accused of wrongdoing, and that such an injunction like this was improper because it interfered with foreign business activity. The British Columbia Court of Appeal rejected all of these arguments and upheld the injunction. The Court noted that this kind of injunction was the only practical way for Equustek to enforce its rights against the defendants, who were flouting court orders, and that the injunction caused no real inconvenience to Google.
The injunction granted in the Equustek case provides IP owners with a flexible tool to ensure that even if a defendant ignores court orders and continues online infringement, its websites can be effectively removed from the online marketplace, since consumers rely on Google and a small number of other search engines to locate goods and services online. The Equustek case is currently on appeal to the Supreme Court of Canada, so continued availability of such injunctions may change or be subject to new conditions after the Supreme Court has considered the issue. David Wotherspoon of Fasken Martineau's Vancouver office represented the Electronic Frontier Foundation as an intervener before the British Columbia Court of Appeal.
Federal Court of Appeal Affirms Order to "Deliver Up" Infringing Domain Name to Trademark Owner
Michaels v. Michaels Stores Procurement Company, 2016 FCA 88 involved a trade-mark infringement lawsuit brought by two companies in the Michaels arts and crafts store group, who alleged that the owners of the domain name michaels.ca were creating confusion with various MICHAELS trade-marks. The plaintiffs sued in Federal Court, and the defendants never filed a defence, which eventually lead to a default judgment, including an order that the defendants "deliver up" the michaels.ca domain name to the plaintiffs.
The defendants belatedly appealed, trying to set aside the default judgment on various grounds, and also arguing that the order for delivery up of a domain name should not have been made. The Federal Court of Appeal rejected all of these arguments. The Court then held that because "the domain name was the mechanism by which the respondent's mark was infringed, and was the instrument of confusion in the marketplace" it was appropriate for the trial judge to have made an order for delivery up to the plaintiff trade-mark owners.
"Delivery up" is simply a court order that the defendant transfer possession of infringing material to the intellectual property owner. In the past, orders for delivery up have concerned infringing articles, which would be handed over to the intellectual property owner, who would normally destroy them.
The application of delivery up to domain names is a new and innovative approach to enforcing trade-marks rights when the defendants' infringing conduct is crystallized in a domain name. The Federal Court had previously declined to make orders transferring domain names, on the basis that it lacked jurisdiction to do so (Decommodification LLC v Burn BC Arts Coop, 2015 FC 42).
The Michaels Stores case confirms that this jurisdiction does exist, although the circumstances in which it will be exercised have yet to be fully explored. For example, at this time it is not clear whether delivery up will be available whenever a domain name is used for the purposes of trade-mark infringement, or whether the presence of the trade-mark in the domain name itself is essential.
Regardless, the Federal Court of Appeal's judgment in Michaels Stores provides trade-mark owners with a powerful remedy for online trade-mark infringement. The domain names which provide the virtual address for infringing websites can now be seized through court process, allowing the trade-mark owner to regain control over an infringing domain name. Once the domain name is under the trade-mark owner's control, the infringing website will no longer be accessible to the public through that URL.
