The Key to Confusion: Supreme Court of BC decides on Keyword Advertising and Passing Off

Search keywords are incredibly valuable in today's world, and a successful use of words catering to users' searches can yield a great deal of monetary gain to those using them, even at the expense of close competitors in the marketplace. Although keywords and potential issues with trade marks and infringement thereof has been extensively dealt with in the UK and EU courts, the issue has seen very little light in the fair country of Canada (a place this Kat lived in for a short period of time). The issue has since come to more judicial prominence, and the Supreme Court of British Columbia endeavoured to answer the matter last month.

Chasing mice or chasing careers;
the grown-up world scared Merpel

The case of Vancouver Community College v Vancouver Career College 2015 BCSC 1470 concerned the use of the acronym "VCC"; one that Vancouver Community College had been using prominently for a number of years since the College's inception in the 1960s, as well as registered their name and the acronym as trade marks in Canada [marks 0910482 and 0916687 respectively]. As discussed at length in the case, Vancouver Career College had used the acronym in both advertising and social media, even going as far as purchasing keyword advertising on Google and Yahoo! search results, often incorporating both VCC and Vancouver Community College in those results. Through a long period in the late 90s and early 2000s both entities exchanged communications relating to the misuse of the marks by Vancouver Career College, only culminating in legal action after 13 years of these exchanges, ending up in the Supreme Court of British Columbia.

The first claim by Vancouver Community College was under section 9(1) of the Canadian Trade-Marks Act 1985, which operates similarly to section 10 of the UK Trade Marks Act 1994, prohibiting (under section 11 of the Canadian Act) the use of any registered trade mark in connection with a business after its registration. The section therefore only applies prospectively, not retrospectively. Vancouver Career College proved a use of the acronym prior to the mark's registration, and the court quickly dispatched Vancouver Community College's claim under section 9.

The second, more pertinent claim to this article, resided under section 7(b) of the Trade-Marks Act, which effectively codifies the common law concept of passing off. The section states that "[n]o person shall... direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another". As in the UK, passing off hinges on three components: the existence of goodwill, deception of the public due to a misrepresentation and actual or potential damage to the plaintiff; however, in Canada the goods or services have to have acquired secondary meaning in the marketplace in addition to the above three requirements.

Vancouver Community College presented a wealth of evidence for their passing off claim, including several witnesses and nearly 300 documents illustrating historical use of both their name and the acronym VCC to further their claim under passing off.

Even Kats need their degrees

In Canada passing off heavily relies on the first impression on the user when they encounter the mark, within the context its used. On the Internet this would be, as Justice Affleck saw, the point when the user reaches the first page of the website they click through to, and not when they first see the advertisement in their search results. Their confusion would therefore have to manifest upon viewing the page, adding an extra facet to the assessment, which includes the content of that particular page and the use of any marks within it as opposed to a simple measure of use in the results themselves to 'trick' users to click through. Justice Affleck did make a passing remark in relation to meta tags (which were not a part of these proceedings), and deemed that as they are not displayed to the user they cannot by themselves cause confusion.

Ultimately Justice Affleck decided that, although Vancouver Community College did enjoy goodwill in educational services, it had not acquired the requisite secondary meaning within the marketplace. They had also failed to prove confusion through misrepresentation (due to the assessment of confusion at the point of visiting the website, which entails thorough assessment on part of the user who is looking to enrol), leading to the conclusion that there is no likelihood of damage to Vancouver Community College.

Although this Kat is in no position to give an extensive opinion on the application of the law, he still thinks the conclusion of the Supreme Court was the right one. Any prospective students would most likely be Internet-savvy individuals, and would not mistakenly enrol at either College without having to jump through many hoops, revealing the true name of the institution at a given point. The case still is an interesting application of Canadian law, but do our readers disagree in the application of passing off on the Internet through this rationale?