First decision on keyword advertising issued

In Private Career Training Institutions Agency v Vancouver Career College (Burnaby) Inc (2010 BCSC 765, May 28 2010), in the first Canadian decision to deal with keyword advertising, the British Columbia Supreme Court has held that keyword advertising involving the use of competitors' trade names is not misleading advertising. Interestingly, the decision arose out of an administrative law matter relating to business names and, therefore, did not involve the vexing question of whether keyword advertising constitutes use of a trademark.
Private Career Training Institutions Agency (PCTIA) is a regulatory body created by statute of the province of British Columbia to oversee career training institutions in the province. A bylaw under the statute prohibits misleading advertising by such institutions.
Vancouver Career College (Burnaby) Inc (VCC) provides post-secondary educational services through various career training colleges registered with PCTIA. VCC is obliged to comply with the statute and bylaws made thereunder. VCC used the trade names of competitor institutions as keywords to trigger sponsored links in search engine listings.
In response to complaints from competitors, PCTIA developed a guideline interpreting the applicable bylaw. The guideline provides that the use of another institution’s trademark, logo or business name, or anything confusingly similar, by a registered institution in any metatag, search engine keyword, or any similar medium for advertising purposes constitutes false, deceptive or misleading activity and is prohibited.
When PCTIA received complaints that students had been misled by the internet advertising of VCC, PCTIA sought an order prohibiting VCC from referencing the business names of other member institutions as keywords. The issue before the court was whether VCC's advertising involving its competitors' trade names as keywords was false, deceptive or misleading and, therefore, in breach of the bylaw.
The court said that, although no Canadian court had opined on advertising that uses the trademarks or trade names of competitors as keywords, resort could be had to trademark jurisprudence to glean what is meant by the term 'misleading' or 'confusing' in the context of alleged improper advertising. 
In a decision with minimal analysis, the court held that the overriding consideration is the totality of the surrounding circumstances. The court stated that consumers are not generally completely devoid of intelligence or totally unaware of what goes on around them, and can navigate around the Internet among organic and sponsored listings. 
Therefore, the court was not persuaded that VCC’s use of competitors' names as keywords to generate sponsored link advertising would lead a potential student astray. The court accepted VCC's argument that its keyword advertising was no different from the accepted practice of placing an advertisement close to a competitor’s advertisement in traditional media, such as a telephone directory.
The court found that VCC did not hold itself out as anyone else or reference the trade names of its competitors to misidentify itself. The court thus concluded that VCC' s advertising was not false, deceptive or misleading, and did not breach the bylaw.
While this decision looked at keyword advertising from the perspective of misleading advertising, as opposed to trademark use, it is instructive on the approach a Canadian court may take to keying in the context of trademark infringement or passing off. In light of the holding that an internet user would not be misled by sponsored links displaying an advertisement of a person other than the owner of a trade name used as the keyword in a search, Canadian law may prove to be consistent with recent decisions of the Court of Justice of the European Union and the US Second Circuit Court of Appeals.

Sheldon Burshtein, Blake Cassels & Graydon LLP, Toronto

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