Internet Extraterritoriality: Has Canada Reached Too Far Beyond Its Borders?

• Jurisdiction: Canada
• Citation: Vol. 47 No. 3
• Publication year: 2019

INTERNET EXTRATERRITORIALITY: HAS CANADA REACHED TOO FAR BEYOND ITS BORDERS?

Sydney Wilson^*

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TABLE OF CONTENTS

I. INTRODUCTION.........................................................................................778

II. BACKGROUND.........................................................................................779

A. Internet Governance Generally..............................................779
B. Jurisdiction.............................................................................781
C. Cases Expanding Jurisdiction Extraterritoriality..................782

III. ANALYSIS..............................................................................................785

A. Expansion of Power................................................................785
B. How should Google Inc. v. Equustek have been decided.......787

IV. CONCLUSION.........................................................................................789

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I. Introduction

As the Internet reaches record amounts of users and is utilized for a variety of transactions and activities, how jurisdiction is exercised over those activities increases in complexity.¹ Questions of extraterritoriality arise as countries attempt to assert their authority over the Internet in ways that will affect the rights of people around the world. An example of recent extraterritoriality jurisdiction expansion is the Supreme Court of Canada's decision in Google Inc. v. Equustek.²

In the 7-2 decision of Google Inc. v. Equustek, the court ordered Google to delist certain universal source locators (URLs) from its search engine pending a trial for a patent infringement suit brought by Equustek against Datalink.³ The underlying action alleged that Datalink sold an Equustek product as its own and created an infringing product after misappropriating Equustek's trade secrets.⁴ The Supreme Court of Canada affirmed an interlocutory injunction against Google, a non-party to the litigation, requiring Google to delist the URLs globally because Equustek would "suffer irreparable harm if the injunction were not granted."⁵

Google unsuccessfully argued that the extraterritorial reach of this order was improper and that its right to freedom of expression should have tipped the typical balance of the convenience test in favor of denying the interlocutory injunction.⁶ The court rejected this argument holding that jurisdiction was proper because Google conducted sufficient business in British Columbia to establish in personam jurisdiction, and that "[w]hen a court has in personam jurisdiction, and where it is necessary to ensure the injunction's effectiveness, it can grant an injunction enjoining that person's conduct anywhere in the world."⁷ The court found that if the injunction was restricted to Google Canada, the remedy would be deprived of its intended purpose of preventing irreparable harm, and thus, in order for it to be effective, it must apply globally as the "Internet has no borders - its natural habitat is global."⁸

Google also unsuccessfully argued that Canada's issuance of a global injunction "violates international comity" arguing "it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with

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it would result in Google violating the laws of that jurisdiction."⁹ The court found this argument to be too theoretical finding it doubted freedom of expression issues would result in a case concerning violation of intellectual property rights.¹⁰

This Note focuses on the increasing trend of countries exercising extraterritoriality jurisdiction over Internet activities. Specifically, this Note argues that Google Inc. v. Equustek was wrongly decided, and that a country's ability to issue global injunctions should be prohibited as it sets a dangerous precedent for freedom of expression. This Note will suggest various other methods of dealing with the type of problem presented by the Equustek case. It will conclude by recommending that Equustek should have sought to recover monetary damages from Datalink in France and then requested that Google deindex URLs in countries with the highest volume of sales lost to Datalink. If Google did not comply with this request, Equustek should have sought an order in those countries compelling Google to de-index Datalink's URLs.

II. Background

A. Internet Governance Generally

To fully understand the legal issues surrounding the Google Inc. v. Equustek decision, it is necessary to understand the main theories behind Internet governance as well as recent case law supporting an expansion of extraterritoriality jurisdiction over cyberspace.

The United Nations created the Working Group on Internet Governance (WGIG) to identify public policy issues affecting Internet governance and to determine how national governments, international organizations, the private sector, and individuals around the world should work together in the development and governance of the Internet.¹¹ WGIG defined Internet governance as "the development and application by Governments, the private sector and civil society, in their respective roles, of shared principles, norms, rules, decisionmaking procedures, and [programs] that shape the evolution and use of the Internet."¹² At the 2015 United Nations meeting of the General Assembly on the overall review of the implementation of outcomes of the World Summit on the Information Society (WSIS), the United Nations affirmed the

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multistakeholder approach to Internet cooperation.¹³ The multistakeholder approach is designed to provide a balance of control amongst states and other stakeholders, as opposed to the multilateral approach for which China argued, where states regulate the Internet in their respective countries.¹⁴ The multistakeholder model of the United Nations encourages the governance of the Internet by "civil society, businesses, academic institutions, engineers, and government."¹⁵ While the United Nations rejected the multilateral approach, the organization recognized the Internet fosters continuing threats of curtailing freedom of expression, invasion of privacy, and invasion and dispersion of private information and that states must take appropriate measures to protect human rights.¹⁶

Some countries reject the multistakeholder approach to Internet governance in favor of a model of Internet sovereignty. Proponents of Internet sovereignty argue that each nation should have an "unfettered right" to regulate the Internet in its territory and to censor and restrict information within and across its boarders.¹⁷ China is the leading proponent of Internet sovereignty. While China's constitution provides for freedom of speech and press, the country requires all Internet users within China to abide by Chinese law and for censorship of the Internet that reflects the authority and wishes of its political party.¹⁸ Websites such as Wikipedia, search engines, and social media platforms such as Facebook and Twitter are fully blocked or shut down during controversial events.¹⁹ China bans photos, video, and search terms that could spark social unrest. ²⁰ China requires Google to de-index sites its government finds objectionable and utilizes The Golden Shield Program, known as the Great Firewall, to block its people from viewing foreign websites on the basis that these websites contain information they deem "a threat to national secu-rity."²¹ The government has left this term vague. Additionally, Google lost a key dispute with the Chinese government when the company agreed to disable a censorship alert that was displayed when Chinese users accessed the search

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engine.²² China is joined in its quest for Internet sovereignty by Russia and the Group of 77, an organization comprised of developing countries.²³

B. Jurisdiction

The issue created by the Canadian decision in Google Inc. v. Equustek is that the Canadian court is seeking to assert jurisdiction and sovereignty over globalized information. In response to Microsoft v. USA, the Internet Governance Project indicated that this "clash between cyberspace and political space" would provide countries with two basic choices and the following effects:

Either 1) isolate themselves completely by requiring every Internet service to keep all of their facilities and data in their jurisdiction and completely regulating all cross-border movements of data; or 2) extend their jurisdiction beyond their territory and try to regulate services globally. The first option, taken to its extreme, ends the Internet - it destroys the network effects and efficiency of the global Internet and creates a set of national walled gardens. The second option destroys the whole model of national sovereignty, and opens up Internet services to a welter of conflicting jurisdictional requirements.²⁴

The jurisdiction of individual countries in cyberspace is complicated and problems arise because the Internet is trans-border and thus, not bound by traditional territorial lines.²⁵ This creates issues because certain Internet content may be considered illegal or criminal in some countries while being legal in others.²⁶ The Internet reaches over four billion users from almost 200 countries.²⁷ Today most transactions or activities involve multiple jurisdictions and create possible conflicts of law as nations work to extend their jurisdiction extraterritoriality.²⁸

Canada follows the principle of comity and has arranged for reciprocal enforcement agreements with countries such as the United States, Australia,

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and the United Kingdom.²⁹ Thus, Canada relies on agreements with other countries to enforce its jurisdiction beyond its borders. Canada approaches jurisdiction over the Internet in a way very similar to the United States by applying a "real and substantial connection" test.³⁰ The Supreme Court of Canada has interpreted this to be a test "intended to capture the idea that there must be some claims to...