Site unseen: Federal Court of Appeal upholds new injunctive remedy

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Canada Publication June 4, 2021

The Federal Court of Appeal, in Teksavvy Solutions Inc. v Bell Media Inc., 2021 FCA 100 (Teksavvy), affirmed an order requiring third parties to block access to the pirated television streaming service GoldTV. The decision, written by Locke J.A., clearly confirms that blocking orders are available in Canada as a remedy to limit access to sites that provide copyright-infringing content.

GoldTV is an illicit subscription service that provides unauthorized streaming of television programming for nominal fees. In the summer of 2019, two injunctions were issued against the unidentified proprietors of GoldTV to cease operations of their sites GoldTV.ca and GoldTV.biz, but these went ignored by GoldTV. 

In a landmark decision, in Bell Media Inc. et al. v GoldTV.Biz, 2019 FC 1432 (Bell Media), the Federal Court of Canada issued an order for numerous third-party Internet service providers (ISPs) to block access to GoldTV’s sites by their customers. The ISPs to whom the order applied were not parties to the action or accused of any wrongdoing; collectively, they provide service to the majority of Canadian Internet users. As such, the site-blocking order essentially cut off access for Canadians to GoldTV’s sites.

While site-blocking orders had been available in the UK, EU, and elsewhere, the order was unprecedented in Canada.  However, this is not the first time a mandatory injunction has been issued against a third party to combat intellectual property (IP) infringement. This decision built off of Google Inc. v Equustek Solutions Inc., 2017 SCC 34 (Equustek), in which the Supreme Court of Canada held that the Federal Court had jurisdiction to grant a world-wide de-indexing order against the third-party search engine Google, in relation to ongoing trademark infringement and breach of confidence by the defendant.

The site-blocking order in Bell Media was largely unopposed by the third-party ISPs except for Teksavvy, which opposed the order and brought the appeal. 

The Federal Court can issue site-blocking orders

The Court of Appeal confirmed that the Federal Court has jurisdiction to issue a site-blocking order as sought. Echoing the reasons given in Bell Media, the court concluded that the Federal Court has the power to make blocking orders under Sections 4 and 44 of the Federal Courts Act. Section 4 provides that the Federal Court is a court of equity, and Section 44 permits the Federal Court to issue injunctions “in all cases in which it appears to the court to be just or convenient to do so.” The broad scope of this power was made clear in Equustek, in which the Supreme Court held that “[t]he powers of courts with equitable jurisdiction to grant injunctions are, subject to any relevant statutory restrictions, unlimited.” 

The Court of Appeal considered arguments from Teksavvy that the order was contrary to other relevant statutory authorities. The court noted that Section 34(1) of the Copyright Act provides for injunctions, among other remedies, in the event of infringement, and went on to reject two related arguments from Teksavvy: first, that site-blocking orders should not be available as they are not expressly provided for within the Act; and second, that the regime within Sections 41.25 to 41.27 of the Copyright Act, allowing for copyright owners to issue notices of infringement to ISPs to be forwarded to infringing parties, reflects an intention by Parliament to not allow for the remedy of site-blocking orders. 

The court also considered the effect of Section 36 of the Telecommunications Act, which states that ISPs “shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public” without CRTC approval. The court held that while Section 36 contemplates net neutrality for ISPs, it does not displace the Federal Court’s equitable powers of injunction. As Justice Locke wrote: “complying with a court-ordered injunction does not amount to controlling or influencing. On the contrary, it is the ISP that is being controlled or influenced by the Order.”

The court was unpersuaded by arguments that the matter could be distinguished from the Equustek case, disagreeing that Equustek could be distinguished on the basis that it concerned trademarks and trade secrets as opposed to copyright. Teksavvy also argued that a site-blocking order is more intrusive than the de-indexing order granted in Equustek, and while the court acknowledged some merit in this argument, it nonetheless considered Equustek to be a general authority for granting mandatory injunctions against third parties. The circumstances of the case then determine whether and what type of injunction may be appropriate.

The order did not infringe upon freedom of expression 

Additionally, Teksavvy argued that the blocking order violated the Section 2(b) of the Charter concerning the right to freedom of expression of both the ISPs who are required to block certain websites and the consumers whose access to the sites would be blocked. The court quickly dismissed the contention that an ISP has an expressive interest, noting that an ISP “acts as a common carrier subject to an obligation of net neutrality” and “its everyday activities in question are not expressive and therefore do not engage freedom of expression.” 

Further, it was held that in the context of issuing a blocking order, a distinct analysis as to whether the Charter applied was not necessary. Rather, potential effects on the freedom of expression can be considered as part of the balance of convenience analysis in determining whether it would be just and equitable to grant a site-blocking order. The court held that the Federal Court’s decision, which held that effects on expression did not tip the balance of convenience against the order, was reasonable.

The order was just and equitable

As a mandatory interlocutory injunction, a site-blocking order requires that (1) the applicants have a strong prima facie case, (2) the applicants will suffer irreparable harm absent the injunction, and (3) the balance of convenience favours granting the injunction. 

The Court of Appeal found no error in the Federal Court’s reasoning that it was just and equitable to order the injunction on the circumstances before it. With respect to the motion judge’s balance of convenience analysis, the court rejected the argument raised by Teksavvy that the judge erred or fettered his discretion in relying on factors gleaned from a series of decisions in the U.K. case: Cartier International AG v. British Sky Broadcasting Ltd. [2014] EWHC 3354 (Ch); [2016] EWCA Civ 658; [2018] UKSC 28. Justice Locke wrote that “it was entirely appropriate for the Judge to look abroad for inspiration when faced with a motion for an order that was unprecedented in Canada.”

Implications

The Teksavvy decision confirms that the Federal Court has the power to issue blocking orders and to do so does not violate the principles of net neutrality or freedom of expression. This confirms that Canada is among the many countries in which such orders may be granted, requiring third-party ISPs to block user access to sites that infringe copyright. There is no reason to believe that this decision would not apply to blocking orders sought against sites that provide other pirated copyrighted works including music, books, video games, and sports programming, or even potentially in relation to other types of IP infringement, for example sites whose sole purpose is the sale of counterfeit goods. The decision, along with Equustek, confirms the expanded circumstances in which third parties may be compelled to assist in combatting IP-infringing sites.

The author wishes to thank articling student Kevin Bushell for his help in preparing this legal update.



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