Keyword advertising not passing off: Vancouver Community College v. Vancouver Career College

August 25th, 2015 by Barry Sookman Leave a reply »

Search engines make billions of dollars each year selling keywords to businesses to advertise their products and services online. Businesses often bid for keywords that are trade-marks or trade-names of their competitors. Understandably this has generated considerable litigation around the world against search engines such as Google and their customers, much of it unsuccessful.

The recent Canadian case, Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2015 BCSC 1470 affirmed that the owner of a trade-mark cannot succeed in a passing off action against a person who buys and uses the trade-mark of a competitor as a keyword unless, the person can prove that that use causes or is likely to cause confusion. The court made these types of cases difficult to pursue by also holding that the potential for confusion cannot arise before a searcher reaches the advertiser’s website.

In the Vancouver Community College case, the plaintiff, Vancouver Community College, alleged the defendant, Vancouver Career College, principally through keyword advertising, misrepresented its educational services as those of the plaintiff. In particular, the defendant adopted and used VCC and VANCOUVER COMMUNITY COLLEGE in the headings and body of advertisements published on Google and Yahoo! and their search partners. It also adopted and used VCC and VANCOUVER COMMUNITY COLLEGE as keywords in an extensive advertising campaign using advertising services from Google and Yahoo!, such that users searching for VCC or VANCOUVER COMMUNITY COLLEGE would be directed to the defendant’s websites.

To succeed in a passing-off action the plaintiff must prove the existence of goodwill attached to the goods or services supplied in association with its trade marks, deception of the public due to a misrepresentation, and actual or potential damage to the plaintiff. In keyword advertising cases, the central and most difficult issue is whether the keyword use has caused, or is likely to cause, confusion. This is hard to prove, especially if the time for assessing confusion is at the time the user lands on the web page of the advertiser and not at the time the user first clicks on the link provided with the keyword. This was the finding of Justice Affleck who found no likelihood of deception on the facts of the case.

[182] To determine whether the defendant’s conduct alleged in this action is unlawful, it is necessary to consider the defendant’s conduct in the context of the particular facts of this case. This in turn requires a consideration of what happens when persons search online for a career training institution that suits their individual needs. When individuals in British Columbia who seek information about a career training institution conduct a search on a search engine, such as Google, they are not taken by default to any particular search result. The searcher is able to review the search results before making a decision to click on an organic or sponsored advertisement. Once persons clicks on the advertisement they are shown a webpage, often called a “landing page” or a “landing site”. The webpage displays information provided by the advertiser and it is for the searcher to make the decision to move forward with the search or if uninterested to return to the search results, and perhaps try another website. Neither the defendant nor any other advertiser online controls the search process. The main role of a website owner is to provide content for its website.

[183] The authorities on passing off provide that it is the “first impression” of the searcher at which the potential for confusion arises which may lead to liability. In my opinion, the “first impression” cannot arise on a Google AdWords search at an earlier time than when the searcher reaches a website. When a searcher reaches the website of the defendant in the present proceeding it is clearly identified as the defendant’s website. As was said by Frankel J.A. in Insurance Corporation of British Columbia v. Stainton Ventures Ltd. the “relevant consumer” will “understand that it is necessary to view a website to determine whose site it is”. In my opinion that is the point during a search when the relevant first impression is made.

[186] I will also comment on the bidding process in keyword advertising which is a well-established practice throughout the world of online advertising. It would be imprudent for this Court to attempt to preclude or even limit that practice in this jurisdiction unless it can be shown to be an unreasonable constraint on competition. That has not been shown. To award damages to the plaintiff or to enjoin the defendant from certain conduct because the defendant bids on the plaintiff’s name for the purposes of keyword advertising would be to disadvantage the defendant in a way that other online advertisers are not. It is not the defendant, or another advertiser in its position, which controls the bidding process, apart from making a decision to bid. A bid on a keyword may send a searcher to the bidder’s landing page, but the process of the search is controlled by the searcher and the search engine, not by the advertiser. Google and other providers of search engines generate revenue by offering an efficient bidding process. I cannot conclude that the defendant causes confusion by taking advantage of this service offered by Google.

[187] Any confusion a prospective student may experience between the names Vancouver Community College and Vancouver Career College is irrelevant to this lawsuit. Even if it were relevant, it is a chimera. If, because of confusion between the names, a prospective student mistakenly attempts to enroll in Vancouver Career College she must do so in person; attend an interview in which her suitability is canvassed; is given a tour of the campus of the defendant which is identified by signage prominently displaying the defendant’s name, and complete a number of forms, usually involving a loan application from Vancouver Career College, all of which have the defendant’s name printed on them. There can be no plausible reason for confusion.

In rendering its decision, the court also rejected the controversial test of “initial interest confusion” that has been adopted by some U.S. courts. According to the court:

In Teresa Scassa, Canadian Trademark Law, 1st ed (Markham: LexisNexis Canada, 2010) at 408 the author wrote:

… Where a user who is deliberately searching for the plaintiff’s wares or services is led to the defendant’s site instead, this is called initial interest confusion.

Although relied upon by some courts, the concept of initial interest confusion must be treated carefully when used as a basis for finding the confusion necessary for an action in passing off. The problem with “initial interest confusion” is that it may amount to nothing more than a very initial confusion, and may not be sufficient to be reasonably actionable. For example, in one U.S. case, the Court noted:

There is a difference between inadvertently landing on a web site and being confused. Thousands of Internet users every day take a stab at what they think is the most likely domain name for a particular web site. Given the limited number of letters in the alphabet, and the tendency toward the use of abbreviations in commerce generally and in domain names in particular, it is inevitable that consumers will often guess wrong.

This view has been shared by other courts: “Dissimilarity of goods and services resolves the initial interest confusion question.”

Initial interest confusion appears also to assume a relatively inexperienced Internet user, and indeed the concept emerged in the early days of the Internet. Early cases relying on initial interest confusion should therefore be approached with caution. As use of the Internet becomes familiar and ubiquitous, the test person for confusion is likely to shift from a tentative and easily confused neophyte to an increasingly savvy user who is familiar with search engines, and capable of sifting through search results.

The Court of Appeal for England and Wales also recently rejected the U.S. “initial interest confusion” doctrine in Interflora Inc & Anor v Marks and Spencer Plc (Rev 1) [2014] EWCA Civ 1403 (05 November 2014) finding it “an unnecessary and potentially misleading gloss on the tests the Court has articulated” in trade mark cases.

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