Spyware/Adware Action Dismissed for Lack of Jurisdiction of the Canadian Courts

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SPYWARE/ADWAREACTIONDISMISSEDFORLACKOFJURISDICTIONOFTHE
CANADIANCOURTS

AlexandraSteele*
LEGERROBICRICHARD
,L.L.P.
Lawyers,Patent&TrademarkAgents
CentreCDPCapital
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Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242–Fax(514)8457874
info@robic.com-www.robic.ca

Aproposedclassactionsuitwasrecentlydismissedduetothefactthatthe
StatementofClaimfailedtoestablishtheFederalCourtofCanada’
jurisdictionoverthematterandoverthedefendant.[Desjeansv.Intermix
Media,Inc.,2006FC1395(deMontignyJ.,November17,2006)].
THEFACTS
Mr.DesjeansbroughtanactionbeforetheFederalCourtofCanadaagainst
theDefendantIntermixMedia,Inc.(hereinafter“Intermix”).
InhisStatementofClaim,Mr.DesjeansallegedthatIntermixofferssoftware
programssuchasscreensaversandgames,fromitswebsite.Intermix’s
programsappeartobefree.Mr.Desjeansdownloadedsuchaprogramon
hiscomputerand,accordingtohim,alsounknowinglydownloaded
spyware/adwareprogramsbywhichIntermixwasthenabletocontinue,
amongstothers,toadvertiseitsproductsandservices,toredirectweb
addressestoIntermix’swebsiteandtoreportinformation,andallthislong
aftertheuser,suchasMr.Desjeans,hadleftIntermix’swebsite.Accordingto
Mr.Desjeans,theinstallationoftheunwantedspyware/adwareprogramsis
notdisclosedbyIntermixwhenacustomerdownloadsthefreeprograms
fromIntermix’swebsite.InhisStatementofClaim,Mr.Desjeansclaimedthat
Intermixusesdeceptivebusinessmethods,contrarytotheprovisionsofthe
CompetitionAct(R.S.C.1985c.C-34).Mr.DesjeansalsopetitionedtheCourt
tohavetheactioncertifiedasaclassactionsuit.
IntermixfiledamotiontodismisstheStatementofClaimonthebasis,
amongstothers,thattheCourthadnojurisdictionoverthematter.Intermix’s

©CIPS,2006.*Lawyer,AlexandraSteeleisamemberofLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirmof
lawyers,andpatentandtrademarkagents.Publication142.196.

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motiontodismisswassupportedbyseveraldetailedaffidavits,includingthose
ofitsPresidentandofitsDirectorofHumanResources.Theseaffidavitsstated
thatIntermix:
a)wasapubliclytradedcompanywithitsprincipalofficesinLosAngeles,
California;
b)neverhadanyemployeesinCanada;
c)neveranybankaccountinCanada
d)didnotpaytaxesinCanada
e)wasnotaregisteredbusinessinCanada;
f)hadnodirectorindirectpromotion,advertising,marketingor
solicitationdirectedatCanadians;
g)hadnoserversinCanada;
h)hadchosenthelawsoftheStateofCaliforniatogoverntheLicense
Agreementwhichusersofitswebsiteadheredtobeforedownloading
anymaterialsfromtheIntermixsite.
THEFEDERALCOURTJUDGEMENT
TheprincipaldeterminationtheCourtneededtomakewasifithad
jurisdictionoverIntermixandMr.Desjean’sclaim.Jurisdictioncanusuallybe
assertedifthedefendantisphysicallypresentintheCourt’sterritory,orifthe
foreigndefendantconsentstotheCourt’sjurisdiction,oriftheCourtdeclares
itselfcompetenttohearthecase.
RulingthatthepresentcasewasonewheretheFederalCourtofCanada
wouldneedtodeclareitselfcompetenttohearthecase,Justicede
MontignyreferredtoseveralSupremeCourtofCanadadecisionswhereit
wasdecidedthatthereneededtobea“realandsubstantialconnection”
betweenaforeigndefendantandtheforumelectedbytheplaintifffor
jurisdictiontoarise.JusticedeMontignyalsoreferredtothedoctrineofforum
nonconvenienswherebyaCanadianCourtcandeclinejurisdictionifit
deemsthatthecasewouldbemoreappropriatelydealtwithinanother
jurisdiction.GuidelinesweredevelopedtoassisttheCourtsinitsdecision
makingprocess,namely
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theconnectionbetweentheforumandtheplaintiff’sclaim;
theconnectionbetweentheforumandthedefendant;
unfairnesstothedefendantinassumingjurisdiction;
unfairnesstotheplaintiffinnotassumingjurisdiction;
involvementofotherpartiestothesuit;




 



  

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theCourt’swillingnesstorecognizeandenforceanextra-
provincialjudgementrenderedonthesamejurisdictional
basis;
whetherthecaseisinterprovincialorinternationalinnature;
and
comityandthestandardsofjurisdiction,recognitionand
enforcementprevailingelsewhere.
AfterconsideringofthefactscontainedinIntermix’sdetailedaffidavitsand
concludingthatthesefactsmilitateinfavouroftheFederalCourtofCanada
decliningjurisdiction,JusticedeMontignywrites:
[29]Whiletheplaintiffallegedlysuffereddamagestoa
computerlocatedinCanada,thisisnotenoughtoconfirmthe
Court’sjurisdiction.[…]
[36][…]Jurisdictioncannotbefoundedsimplyuponthefact
thattheplaintiffwasinCanadawhenhedownloadedthe
foreigncontent.[…]
TheCourtnotedthatdespitethefactthatweareinaneraofsubstantial
Internettransactions,thereisapaucityofjurisprudenceonthequestionof
Internetjurisdiction.TheprincipalCanadiandecisiononthetopicisBraintech,
Inc.v.Kostiuk(1999)D.L.R.(4
th)46(B.C.C.A.)whereitwasdecidedthat
determiningthatthereisa“realandsubstantialconnection”betweena
foreigndefendantandaCanadianforumdependsonthecharacterofthe
website,i.e.ifthesiteispassive,orifitisusedtointeractwithCanadian
residents,orifitusedtoconductbusinesswithCanadianresidents.Inviewof
thelackofprecedentsintheCanadianCourts,JusticedeMontignyreferred
tothe“minimumcontacts”theorydevelopedbytheAmericanCourts,which
hesummarizedasflows:
[40][…]Itisnowwellestablishedthatthedueprocessclause
requiresthatadefendant,ifnotpresentinthestate,have
certainminimumcontactswithitsuchasthatthe
maintenanceofthesuitdoesnotoffendtraditionalnotionsof
fairplayandsubstantialjustice.The“minimumcontacts”
requiredcanbesatisfiedeitherthroughcontactssufficientto
supportspecificjurisdiction,orcontactsthatadequately
supportgeneraljurisdiction.Generaljurisdictionwillattach
wherethedefendant’scontactswiththeforumstatearenot
relatedtotheplaintiff’scauseofaction,butarecontinuous
andsystematic.Specificjurisdictionariseswhenthedefendant
haspurposefullydirectedactivitiestowardstheforumstate
fromwhichthelitigationarisesortowhichitrelates:[…]

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Applyingthetheorytothefactsofthecase,JusticedeMontignyconcluded
onceagainthatCanada,andtheFederalCourt,wasnottheproperforum
forMr.Desjean’sclaimastherewasnoevidencethatIntermix’shada
sufficientlevelofinteractionwithCanadatomeetthe“minimumcontacts”
rule.ThelearnedTrialJudgefurtherstatedthatevenifhewaswrong,andthe
FederalCourtofCanadacouldassumejurisdiction,itshouldnonetheless
declineitasCalifornia,oranotherstate,wouldbeabetterforumforMr.
Desjeans’claimsincetheevidenceandthekeywitnessesthatthePlaintiff
mayrequiretomakehiscaseappeartobelocatedintheU.S.Justicede
Montignythereforeconcludedthatsincethereappearedtobeabetter
forumforthedispute,theFederalCourtofCanadahadnoalternativebutto
refuse/declinejurisdictionandstriketheStatementofClaim.
CONCLUSION
Thecaseconstitutesaperfectillustrationofthenewchallengesfacingnot
onlytheCourtsaroundtheworldifadisputearisesconcerninganInternet
transaction,butalsoallpersonswhousetheInternetasabusinessorpersonal
tool.Generally,personswhousetheInternetshouldbeawareofthe
existenceofjurisdictionalclauses.ForInternetbusinesses,thetermsofuseof
theirwebsitesshouldincludenotonlytheapplicablelaws,butalsothe
applicableforumsifadisputearises,andthesejurisdictionalclausesshould
beeasilyaccessiblefortheuser.AsforInternetusers,whooftenpaylittleor
noattentiontothetermsandconditionsofuseofthewebsitestheyvisit,they
shouldalsodiligentlyreviewthetermsandconditionsofuseofsuchwebsites
beforebeginningtheirtransaction.Alittleextracareandcautionwhen
surfingtheNetcangoalongwaytopreventingunpleasantsurprises…

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