A recent decision of the Federal Court has granted a site-blocking order against several Internet Service providers (ISPs).
The Background
The decision is not surprising given the previous cases. The impetus for granting such orders was a decision of the U.K. Court of Appeal. The court concluded, primarily based on common law principles that the High Court had jurisdiction to make an order requiring that English ISPs block or attempt to block certain target websites which were advertising and selling counterfeit copies of the plaintiff’s goods. In substance, it was concluded that once an ISP became aware that it services were being used by third parties to infringe an intellectual property right, then it became subject to a duty to take proportionate measures to prevent or reduce such infringements even though it was not itself liable for them.
On appeal to the U.K. Supreme Court, the decision of the Court of Appeal on the issue of jurisdiction was confirmed. The Supreme Court concluded that such jurisdiction existed based on ordinary English common law principles of equity. However, the Supreme Court allowed the appeal regarding the costs of compliance. They concluded that the ISPs should be indemnified by the applicant for the costs of complying with the order.
Shortly after this decision of the Court of Appeal, in a case in British Columbia, the plaintiffs sought an interlocutory injunction against Google to force it to remove several websites used by the defendants from its search indexes. The defendants had defaulted in their defence and were in contempt of several orders of the court but continued to operate rogue websites from which they offered infringing services. The judge who heard the case granted an injunction against Google to cease indexing or referencing a series of websites listed in a schedule to the order granting the injunction until the trial of the action. The order had a worldwide effect.
Google unsuccessfully appealed from this order to the British Columbia Court of Appeal and to the Supreme Court of Canada. The Supreme Court said that the court had jurisdiction to make such orders. In addition, they said that the problem was occurring online and globally. The only way to ensure that the order attained its objective was to have it apply where Google-operated – globally. The court also approved and agreed with the approach taken by the UK Court of Appeal.
The Decision
In this case, the plaintiffs had obtained an interlocutory injunction against two unknown defendants requiring them to cease operating GoldTV Services which was infringing the plaintiffs’ rights. Despite the interlocutory injunction GoldTV Services continue to engage in infringement.
Faced with continuing infringement in the face of the injunction, the plaintiffs applied for an interlocutory injunction against several ISPs. Collectively the ISPs serve the majority but not all Canadian Internet users. Ten of the eleven ISPs did not dispute the issuance of the interlocutory injunction but one ISP objected.
After reviewing the relevant case law, the judge concluded that the court had jurisdiction to grant the order and there were no grounds to support the position that the court should decline to exercise its discretion.
The Test to Be Applied
To obtain a site-blocking order the plaintiffs must first satisfy the standard test for granting an interlocutory injunction: (1) there is a serious issue be tried; (2) irreparable harm will result if the injunction is not granted; and (3) the balance of convenience favours the plaintiff. Further, and because the order is aimed at innocent third parties, the plaintiffs must demonstrate that the proposed order is properly targeted, that the ISPs should be justifiably bound by it, and that, the effects of the order appropriately balance the interests of the defendants, the ISPs and the public.
The last part of the test is directed at assessing proportionality and can be considered as a part of determining whether the balance of convenience favours the plaintiffs. In determining whether a site-blocking order was proportional the Judge considered the following factors that had been considered by the UK Court of Appeal.
Necessity – a consideration of the extent to which the relief is necessary to protect the plaintiff’s rights. The relief need not be indispensable, but the court may consider whether alternative and less onerous measures are available;
Effectiveness – a consideration of whether the relief sought will make infringing activities more difficult to achieve and discourage Internet users from accessing the infringing service;
Dissuasiveness – a consideration of whether others not currently accessing the infringing service will be dissuaded from doing so;
Complexity and Cost – a consideration of the complexity and cost of implementing the relief sought;
Barriers to legitimate use or trade – a consideration of whether the relief will create barriers to legitimate use by unduly affecting the ability of users of ISP services to access information lawfully;
Fairness – a consideration of whether the relief strikes a fair balance between fundamental rights of the parties, the third parties and the general public;
Substitution – a consideration of the extent to which blocked websites may be replaced or substituted and whether a blocked website may be substituted for another infringing website; and
Safeguards – a consideration of whether the relief sought includes measures that safeguard against abuse.
After considering these factors the judge was satisfied that the balance of convenience favoured the plaintiffs and granted the order. The order contains a mechanism, subject to court review, for adding additional sites if solely or predominantly used by the defendants for infringing purposes. The order also requires that the plaintiffs indemnify the ISP for the reasonable marginal cost of implementing it.
Comment
The sole ISP who objected to the order has appealed that the decision to the Federal Court of Appeal. However, given the previous decisions of the Supreme Court of Canada and the UK Supreme Court confirming the existence of equitable jurisdiction to grant such orders, it may be difficult to convince the court otherwise.
Infringement and the sale of counterfeit goods on the Internet is a significant worldwide problem. If site-blocking orders can help alleviate this problem the potential existence of such orders is a positive development. However, the cost of obtaining such orders is not insignificant.
If you have questions, please contact me at mckeown@gsnh.com.
Goldman Sloan Nash & Haber LLP 480 University Avenue, Suite 1600 Toronto, Ontario M5G 1V2 Direct Line: (416) 597-3371 Fax: (416) 597-3370 Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.
This article originally appeared on The Lawyer’s Daily website published by LexisNexis Canada Inc.
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