BC Appeals Court Hands Google a Major Defeat

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by SUNNY DHILLON, The Globe & Mail

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British Columbia’s highest court has dismissed an appeal from Google, forcing the world’s top search-engine provider to block results for the website of a clandestine company accused of violating trademarks.

The B.C. Court of Appeal dismissed Google’s attempt to overturn an injunction Thursday. The case, which raises questions about the power courts can wield over the Internet, is believed to be the only one of its kind in Canada.

The case was launched by Equustek Solutions Inc., a company that sells industrial networking devices and is based near Vancouver. Equustek filed its lawsuit against Datalink Technologies Gateways Inc. in 2011, accusing the latter of relabeling its products and passing them off as its own. Equustek also accused Datalink of unlawfully acquiring confidential information and using it to manufacture a competing product, in violation of Equustek’s trademarks.

Datalink, which only operates online, stopped responding to the lawsuit within a year of it being filed. A B.C. Supreme Court judge last June granted an injunction that ordered Google to stop mentioning Datalink in all of its search results.

A lawyer representing Google – which is based in California – told the Court of Appeal the injunction went beyond the lower court’s jurisdiction, had an extraterritorial reach and improperly operated against Google, even though it had done nothing wrong.

The three-judge panel unanimously rejected the appeal, in which Google argued that the injunction could pave the way to similar orders in other countries.

The appeal court said that while Google does not have employees, offices or servers in British Columbia, it does target Internet users through advertising and sells advertising services to local companies. That, the ruling said, gives B.C. Supreme Court a level of jurisdiction. “I am satisfied that there was a basis, here, for giving the injunction worldwide effect,” Justice Harvey Groberman wrote.

Leslie Church, a Google spokeswoman, said in an e-mail that the company is reviewing the judgment. She would not say if Google would seek leave to appeal to the Supreme Court of Canada.

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