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Is It Legal to Use Competitors’ Trademarks as Part of SEO Strategies? Canadian Court Finds Use of a Competitor’s Trademark as a Keyword Is Not Actionable

September 11, 2015

By Catherine Lovrics and Tamara Céline Winegust

In Canada, there have been only a few Canadian cases dealing with use of competitors’ trademarks in search engine optimization (SEO), for example as keywords and metatags. The recent trend is that such use is not actionable under trademark law on the basis that consumers are unlikely to be confused by search engine results alone, and also to reject “initial interest” confusion type arguments. The issue, however, is not settled at Canadian law.

In Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2015 BCSC 1470, the Supreme Court of British Columbia considered whether the defendant’s use of the plaintiff’s trademarks VCC and VANCOUVER COMMUNITY COLLEGE in keyword advertising, including Google AdWords, constituted passing off. The Court found it was not, based on users retaining the ability to choose from the results returned by a search, the content of the defendant’s website not containing any “confusing material”, and on the keywords not being visible to users. The Court found that search results alone are not likely to lead to confusion since a user controls what terms are searched and can still pick and choose between results, so devices that manipulate search results (such as keywords) are unlikely to cause confusion. Acknowledging that confusion is assessed as a matter of “first impression”, the Court held that a “first impression” in the context of keywords or AdWords does not arise until a user has actually accessed the website located by the search. Therefore, a user must actually go to a website before the issue of confusion can arise. The Court also found that that since metatags are not displayed on screen, they have “no potential cause for confusion” and are “irrelevant”. In this case, the defendant’s website itself did not display the plaintiff’s marks, so there was no risk of confusion. 

This follows the recent Federal Court decision in Red Label Vacations Inc. v. 411 Travel buys Limited, 2015 FC 19 (currently under appeal) where the Court found use of other’s trademarks in metatags not to be passing off or trademark infringement. The Court found that since the metatags were not visible to the searcher, there was no potential for a misrepresentation “to the public”. The Court also commented that whether or not there was “initial interest” confusion was immaterial, since that theory of trademark infringement or dilution had not yet gained foothold in Canadian law. Further, since all metatags do is influence search results, the Court concluded that consumers retained the chance to review the search results and select the website they intended to access, in which case there is no confusion of which to speak:

…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 … 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 and services from the website he or she initially searched for.

In two earlier decisions, Courts in Quebec and British Columbia likened keyword advertising to similar side-by-side advertising that is conducted regularly in telephone directories and other advertising media.  In Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., 2010 BCSC 765, aff’d 2011 BCCA 69, the BC Superior Court found that bidding on a competitor’s mark through keyword advertising is not false, deceptive or misleading contrary to a bylaw in the Private Career Training Institutions Act. The case was decided in the context of bylaws that prohibited false, deceptive or misleading advertisement. The Court of Appeal, in upholding the decision, emphasized that this was not a dispute over IP and that the result should not be considered in that context. In Chocolat Lamontagne Inc. c. Humeur Groupe conseeil Inc. 2010 QCCS 3301, the Quebec Superior Court dismissed the plaintiff’s claim for passing off and unfair competition on the basis of no confusion. The defendant’s sponsored ads, although associated with the plaintiff’s mark as a keyword, were found not to be confusing as the text of the ads indicated that they were providing an alternative to the plaintiff’s product. 

Despite the above noted decisions, on the right facts, it may be possible to establish a strong case against keyword advertising and the use of metatags. In contrast to the above decisions is the 2013 Federal Court case, Trans-High Corporation v. Hightimes Smokeshop, 2013 FC 1190, that dealt with the use of marks in metatags and other search engine optimization devices. The Federal Court enjoined use of the plaintiff’s mark HIGH TIMES as part of metatag and other internet search engine optimization tools or devices (which could include keyword advertising). Further, the 2011 Supreme Court of Canada decision, Masterpiece v. Alavida, 2011 SCC 27, supports "initial interest" confusion being actionable - i.e. that even if a consumer is no longer confused after seeing the search results or visiting the website associated with the sponsored link, the use of the keyword may be actionable because consumers will seek out, and consider a competitive product or service in which they presumably had either no awareness of or interest.

To quote from the Supreme Court: [s]uch diversion diminishes the value of the goodwill associated with the trade-mark and business the consumer initially thought he or she was encountering in seeing the trade-mark.  Leading consumers astray in this way is one of the evils that trade-mark law seeks to remedy.  Hopefully, courts will have another opportunity to review the issue, and study more carefully the initial interest confusion issue, and also consider claims of depreciation of goodwill, in particular, in service marks for which a trademark is “used” in association with advertising of services.



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Tamara Céline Winegust Tamara Céline Winegust
B.F.A., J.D.
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