First Canadian Decision on Keyword Advertising
The British Columbia Supreme Court recently issued the first Canadian Court decision dealing with the use by one party of another party’s trademarks in keyword advertising. The case involved a defendant, Vancouver Career College (Burnaby) Inc. (VCC), that provides post-secondary career training services under different business names and trademarks. As part of its internet marketing strategy, VCC, like numerous other businesses, uses keyword advertising, whereby VCC pays search engines such as those provided by GOOGLE and YAHOO! for links to its websites to appear as “sponsored links” or “‘sponsored results” alongside the search engine’s normal search results. In order to use keyword advertising, VCC selected certain keywords to describe its website, including the business names and trademarks of various VCC competitors.
The plaintiff, the Private Career Training Institutions Agency (Agency) is a provincial regulatory agency charged with overseeing career training institutions that operate throughout the Province of British Columbia. Acting on complaints received from other career training institutions in the Province, the Agency sought an injunction against VCC’s practice of using the names and trademarks of those other institutions in VCC’s keyword advertising program, on the basis that such use was false, deceptive or misleading. The Court held that VCC’s keyword advertising program was not false, deceptive or misleading and therefore no injunction was granted.
While framed as a false, deceptive or misleading advertising complaint, rather than a trademark infringement or passing off claim, the Judge in his reasons specifically referenced trade-mark and passing off concepts when looking at the issue of what is confusing or misleading in the context of alleged improper advertising. The Judge found that what the defendants were doing did not amount to false, deceptive or misleading advertising. The Judge also held in his reasons that: “I also accept VCC Inc.’s argument that its practice of using Keyword Advertising is no different than the time-honoured and generally accepted marketing practice of a company locating its advertisement close to a competitor’s in traditional media (e.g., placing its Yellow Pages advertisement next to or in close proximity to a competitor’s telephone number in the same directory so that potential customers of that competitor discover there is another company offering a similar product or service and that they, the consumer, have a choice).”
The Agency has until June 28, 2010 to file an Appeal of the decision, should it choose to do so.