Trademark analysis held to be irrelevant in keyword case

In Private Career Training Institutions Agency v Vancouver Career College (Burnaby) Inc (2011 BCCA 69, February 11 2011), the Court of Appeal for British Columbia has refused to grant an injunction preventing the respondent from using the names of competitors in its internet advertising.
The Private Career Training Institutions Agency (PCTIA) of British Columbia is a regulatory body which provides a variety of post-secondary educational services under various business names registered with the PCTIA. It applied for an injunction to prevent Vancouver Career College (Burnaby) Inc from using the names of its competitors as keywords in its internet advertising, contrary to a recently passed PCTIA bylaw prohibiting "misleading advertising". On June 1 2009 the PCTIA passed Bylaw 29, which provides, in part:

"An institution must not engage in advertising or make a representation 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 key issue was whether there were reasonable grounds to believe that the use of paid keyword advertising in internet search engines, where the keywords were the names or trademarks of competitors, constituted false, deceptive or misleading advertising or representations.

Several weeks after Bylaw 29 was passed, the PCTIA sent all of its member institutions guidelines which stated that the use of another institution’s trademarks, logo or business name, or anything confusingly similar, by a registered institution in any metatags, search engine AdWords, adCenter keywords, or any similar medium for advertising purposes shall constitute false, deceptive or misleading activity within the meaning of Bylaw 29(1), and was prohibited. 

A short time after this, the PCTIA received complaints from two students who clicked on the sponsored link found when searching for the Vancouver Career College, and registered for a course there without realising that it was the wrong institution.

This is an appeal from a decision of the chambers judge who denied an injunction, and held that the purchase and use of keywords for use in internet advertising was not false, misleading or deceptive. In the chamber judge's analysis, because the word 'misleading' was not defined in the British Columbia statute or regulations, he analogised to Canadian jurisprudence developed in the area of trademark law relating to the meaning of the word 'confusing'. 

The Court of Appeal first rejected the analogy to competitor's advertisements being proximate to one another in the Yellow Pages. The Court of Appeal further stated that cases that deal with 'confusion' in the trademark context were of no assistance in this case.

The Court of Appeal held that it was proper for the chambers judge to consider the applicable consumer in context. The applicable consumer would be spending thousands of dollars and several years on education and, as such, would be expected to exercise appropriate care. The PCTIA had not satisfied the burden on it by showing that the respondent's use of competitors' names could lead a student astray or into making a harmful error of judgment, and therefore an injunction was properly refused. 

It would appear that Canadian law on internet keyword advertising is consistent with decisions of the Court of Justice of the European Union and the US Court of Appeals for the Second Circuit, neither of which imposed liability for internet keyword use of the trademarks of others, provided that there is no misrepresentation.
John Macera, Macera & Jarzyna - Moffat & Co, Ottawa

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