Just before the holidays last year, the Federal Court of Appeal released its decision in Red Label Vacations Inc v 411 Travel Buys Limited 2015 FCA 290. It affirmed the lower court decision of Justice Manson which had held that, on the facts of the case, the use of metatags on web pages did not constitute passing-off, trade-mark infringement or depreciation of goodwill. It did so primarily based on findings of fact by the trial judge which the court found were not subject to any palpable and overriding error.
Unfortunately, the Court of Appeal did not engage in any real analysis, or provide any detailed guidance, on when the use of a metatag could constitute passing off or infringement. The majority decision written by Webb J.A. (with whom Ryer J.A. agreed) made the statement that “in some situations, inserting a registered trade-mark (or a trade-mark that is confusing with a registered trade-mark) in a metatag may constitute advertising of services that would give rise to a claim for infringement”. The court did not make any express finding concerning any requirement for the use of a trade-mark as a metatag to be visible to constitute infringement, when a trade-mark used as a metatag could be used in connection with the sale or advertising of a service, or the circumstances in which confusion could arise from the use of a trade-mark as a metatag. Nor did the court provide any guidance on when the use of a trade-mark in a metatag could constitute depreciation of goodwill.
Justice Dawson, in a concurring decision, made an important remark concerning the applicability of the U.S. doctrine of “initial interest confusion” in a trade-mark case. Justice Manson had suggested that the doctrine was not applicable in Canada, stating:
Some United States Courts have held such use can cause “initial interest confusion”, where confusion is caused in the customer before actually purchasing a good or service, when the customer seeks a particular brand of goods or services, but is drawn or enticed to a competitor’s goods or services through the competitor’s use of the first company’s trade name or trademark.
However, that approach to likelihood of confusion has not to my knowledge gained a foothold in Canada. In any event, I do not believe that it would be applicable to the facts of this case. The use of metatags in a search engine merely gives the consumer a choice of independent and distinct links that he or she may choose from at will, rather than directing a consumer to a particular competitor. Rankings may affect the choice to be made, but nevertheless, such a choice exists. Even if a searcher is looking for the website connected with a particular trade name or trademark, once that person reaches the website, there must be confusion as to the source of the entity or person providing the services or goods. If there is no likelihood of confusion with respect to the source of the goods or services on the website, there is no support for finding this prong of the test for passing off. Accordingly, use of a competitor’s trademark or trade name in metatags does not, by itself, constitute a basis for a likelihood of confusion, because the consumer is still free to choose and purchase the goods or services from the website he or she initially searched for.
Here, there is no use of any of the Plaintiff’s trademarks or trade names on the Defendants’ visible website. The website is clearly identified as 411 Travel Buys’ website. There is no likelihood of deception as to the source of the services provided on the 411 Travel Buys website, and the consumer is free to redirect his or her search to the Plaintiff’s website.
Justice Dawson refused to endorse this statement stating:
The extent to which a trademark may be used in metatags without infringing the trademark is, of necessity, fact specific. These reasons ought not to be read as endorsing the Judge’s remarks relating to “initial interest confusion” or as endorsing every alternative basis on which the Judge dismissed the action.
This remark may prove to be significant in the upcoming appeal in the Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2015 BCSC 1470 case . The trial judge in that case had referred to the decision of Manson J stating ““Initial interest confusion” is a term of art in U.S. trademarks law which has not been incorporated into Canadian law: Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca), 2015 FC 19 (CanLII) at paras. 114 and 115.”
The Court of Appeal also dismissed the claim that the trial judge had erred in dismissing the copyright portion of the suit which alleged that the metatags used by the plaintiff were protected by copyright. Manson J had not found a sufficient use of skill and judgement in the selection or arrangement of the metatags to produce an original compilation.