A recent decision in the Supreme Court of British Columbia explored once again the vexed question of the law of passing off in relation to keyword advertising. In Vancouver Community College v Vancouver Career College (Burnaby) Inc the pursuer claimed that Vancouver Career College was misrepresenting its services as those of Vancouver Community College by using the term “VCC”. Interestingly, the challenge was not against Vancouver Career College using VCC to market itself to consumers directly. Instead the challenge was that by purchasing VCC as a keyword for online advertising purposes this constituted passing off.

What is Keyword Advertising?
Keyword advertising involves paying a service such as Google AdWords to have your site associated with particular words so that when those words are searched for your site appears on the results page. The prominence of your website on the results page depends on how much you bid in a bidding process. Keyword advertising bypasses the algorithms generally used by search engines although the result will be distinguished from the organic results generated by the algorithm. It is keyword advertising that results in the “sponsored links” at the top of your results page.

Why is Keyword Advertising Not Passing Off?
While the claim in this case was based on the Canadian Trade-Marks Act, this effectively codifies the common law concept of passing off. As in the UK, there are three tests for passing off:

  1. Goodwill must have been established and any mark the claimant is relying upon must be viewed as distinctive of the claimant among relevant consumers;
  2. The defendant must have misrepresented its goods as the claimant’s leading to a likelihood of confusion; and
  3. The pursuer must have been damaged as a result.

In this case Vancouver Community College failed on both the first and the second grounds. Despite having evidence that they had used the term “VCC” from 1965 it was found that they had not demonstrated that it was distinctive of the college.

Of more interest going forward was the second ground. It was held that Vancouver Community College had failed to show that there was a likelihood of confusion even though they led numerous witnesses who had found themselves being taken to the Vancouver Career College website while searching for the Vancouver Community College website. The court’s discussion suggests that confusion at the point of searching is not relevant and that instead the relevant point at which the likelihood of confusion should be measured is once the consumer has viewed the website that they have found through the search. This is the point at which the relevant “first impression” is made. Once someone was on the Vancouver Career College site it was clear what institution it related to so there was no likelihood of confusion. The court went as far as to say that there can be no plausible reason for confusion in this case.

What does this decision mean going forward?
In this case the court emphasised the importance of the web user’s actions in the search process and considered that this process included reviewing the results and potentially going back to the search results and trying another website. As the court pointed out, here students who, in a state of confusion, attempt to enrol in Vancouver Career College thinking that it is Vancouver Community College have to attend an interview and receive a tour of the campus so any initial confusion is unlikely to last!

This case shows that keyword advertising is still a hot topic. For more information on the position in the UK you might be interested in our webinar in which we covered the Interflora v Marks & Spencer case and the Asda v Specsavers case. You can access the recording here.

Back to Search