Canadian courts don’t protect trademarks from keyword advertising

It seems logical that when Vancouver Career College Inc. wanted to advertise its services using Google AdWords, it would buy the phrase “private career training.” But to a rival Vancouver school, Private Career Training Institutions Agency, it seemed like trademark infringement – so they took them to court.

But a judge determined that despite buying the name of the rival institution, Vancouver Career College was not misleading Internet searchers, nor were they likely to be misled. The decision was recently upheld by an appeals court in February, with that judge agreeing that Private Career Training Institutions Agency failed to prove the keyword advertising was misleading.

That is a little bit surprising, says Sheldon Burshtein, a partner at Blake, Cassels & Graydon LLP. “There was evidence of confusion, two students looking to register for one school registered for another.”

Google users are familiar with the search advertisements that appear above and to the right of organic search results. While organic search results are determined by Google’s algorithm that determines the best possible match for what the user is searching, the advertisements are more likely to display first for the highest bidder. So even if Private Career Training Institutions Agency bought its name for $1 per click, a competitor could alongside it by paying $1.01 per click. Though both schools would have a chance of being shown on top, Google says.

“The net result is the search engine makes money, the other party may get more traffic, and we as the trademark owner may lose traffic,” Burshtein said, presenting at Toronto’s Osgoode Professional Development Centre. And suing the search giant isn’t much of an option.

“If you sue Google or some other search engine, the defence will be to the death,” he says. “Their whole business model is built on this, so it’s not likely they are going to capitulate.”

That leaves a law suit against the buyer of the trademarked keywords. But few Canadian firms have pursued cases like this in court. Two cases were dismissed last year, and the Vancouver appeal was issued this year.

The reason keyword advertising cases are difficult to pursue in Canada comes down to how the courts determine liability, Burshtein says. In Canada, unfair use of a trade mark must be visual – meaning the user must see the trademark being infringed used by the defendant. But in AdWords, a firm could bid on the name of its competitor, but still display its own name in the actual display advertisement.

A Canadian court could also establish liability if there’s likelihood of confusion as to the source of the advertisement, misrepresentation, unfair competition, or misleading advertising.

In another Canadian case involving two Quebec-based firms that sell chocolate bars for school fundraisers, the defendant in the case purchased the other company’s name in keyword advertising, but described itself as the “alternative” to that company. A judge ruled last year that Chocolat Lamontagne hadn’t had its trademark infringed by Humeur Group Conseil.

“It was quite clear that it identified itself as an alternative to the trademark holder’s business,” Burshtein says. For customers who might have wanted to buy from Chocolat Lamontagne, but ended up elsewhere? “Once I’m here, a chocolate bar is a chocolate bar.”

Google Canada does provide recourse for trademark holders, Burshstein says. It will block other firms from showing that keyword term in the text of their ad at the request of the trademark owner if an online complaint form is filled out. “Unless it’s blocked in that way, Google will sell it to anyone,” says the lawyer.

But Google won’t prevent competitors from bidding on the key word term, the search firm says.

Businesses submitting the form will need to input their trademark registration information to be authenticated by Google.

Brian JacksonBrian Jackson is the Associate Editor at Follow him on Twitter, read his blog, and check out the IT Business Facebook Page.
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