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Keyword Advertising Appeal Discounts Trademark Analogies

Canada continues to await its first Court decision on the use of trademarks in keyword advertising.  The British Columbia Court of Appeal issued its decision this week in the case of Private Career Training Institutions Agency (the Agency)  v. Vancouver Career College (Burnaby) Inc. (VCC).  While the Trial Judge’s decision, that the use of keyword advertising in this case was not misleading in the context of the applicable Bylaw, was upheld, the reasoning of the Trial Judge, to the extent it relied on an analysis of confusion under trademark law, was overruled.

At issue was whether the use of keyword advertising by VCC, which is the operator of a private college, was offside the provisions of a Bylaw of the Agency, which is a regulatory body created by the Private Career Training Institutions Act of British Columbia.  The Bylaw in question states that an institution such as VCC “must not engage in advertising … that is false, deceptive or misleading.  Deceptive advertising includes but is not limited to an oral, written, internet, visual, descriptive or other representation that has the capability, tendency or effect of deceiving or misleading a consumer“.   The Agency went further and issued a guideline for interpretation of this Bylaw which specifically stated that keyword advertising and other similar practices would constitute false, deceptive or misleading activity.

In this case VCC purchased keywords of competitor institutions, so that when someone entered the name of the competitor in a GOOGLE or YAHOO! search, as well as the organic search results that would turn up for the competitor, such searches would also turn up prominent sponsored links or advertisements for VCC at the top of or to the right of the organic search results.  The Agency brought the initial action in the Supreme Court of British Columbia, seeking an injunction against the keyword advertising of VCC, relying on the Bylaw.

We reported on the trial decision in this case in an earlier post.  The trial Judge found that VCC’s keyword advertising was not in contravention of the Bylaw.   In coming to that conclusion, the Judge relied on various factors and reasoning.  One such factor was the Judge’s finding that the meaning of the word “misleading” in this consumer protection legislation could be discerned from Canadian jurisprudence on the issue of confusion in trademark law.   Another factor was an analogy that the keyword advertising in issue was akin to one competitor putting its ad in the YELLOW PAGES directory on the same page as an ad or listing for a competitor.

The Court of Appeal agreed, for some of the reasons raised by the Trial Judge, that VCC’s activity was not false, deceptive or misleading activity, such that it was offside the relevant legislation.  The Court of Appeal did not, however agree that a trademark analysis was relevant to the decision and it also held that the analogy of keyword advertising to a YELLOW PAGES ad was not correct given the differences in the technology involved in each activity.

We’ll let you know if there is an Appeal of this decision to the Supreme Court of Canada – highly unlikely given that all three Justices of Appeal concurred.  In the meantime, we’ll have to wait for a keyword advertising case where trademark issues are front and centre.

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