On May 28, 2010, the British Columbia Supreme Court rendered the first Canadian decision on the propriety of internet keyword advertising incorporating competitors’ business names, in Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., 2010 BCSC 765.
The Private Career Training Institutions Agency (the Agency) is a regulatory body that oversees training institutions in British Columbia. Vancouver Career College (Burnaby) Inc. (the College) provides post-secondary educational services under a number of business names, all of which were registered with the Agency.
The Agency sought to prohibit the College from using the business names of other member institutions as part of its internet advertising strategy under its false advertising bylaw. This bylaw prohibits advertising that is false, deceptive or misleading and requires an institution to use the name it has registered with the Agency in its advertising.
As noted by Justice G.R.J. Gaul, website operators can attempt to increase the traffic to their website though payper- click advertising. Basically, website operators pay search engines for links to their website to appear as “sponsored link” when a search contains a triggering keyword; these sponsored links appear alongside the “organic,” free of charge search results. When a searcher clicks on a sponsored link, the search engine charges that website operator.
The Agency received complaints from other member institutions about the College’s keyword advertising and notified its members that the use of another institution’s business name in search engine adwords is prohibited under its false advertising bylaw. The Agency then received complains from two students claiming that they had been misled by the College’s advertising.
The Agency asserted that the College had engaged in false, deceptive or misleading advertising clearly designed to lead students away from other institutions and towards the College’s institutions. The Agency argued that its false advertising bylaw was directed to consumer protection and the College’s actions should be prohibited.
The College acknowledged that it used pay-per-click keyword advertising on over 7,000 keywords, including the business names of other institutions governed by the Agency. The College described its internet advertising strategy as a modern day version of placing its advertisement in close proximity to a competitor’s advertisement, akin to placing its ad next to that of a competitor in a telephone directory.
In determining the meaning of “misleading” for the purposes of the Agency’s by-law, the Court considered case law which favoured a definition of: “an act having the tendency of deceiving or misleading a person is one that tends to lead that person astray into making an error of judgment.” However, the Court also resorted to trade-mark case law on the meaning of “misleading” and “confusing” and concluded that the average consumer and all the surrounding circumstances must be considered.
While no Canadian jurisprudence on keyword advertising was before Justice Gaul, he considered three decisions from the United States, which included grounds such as trademark infringement, unfair competition, false representation and injury to business reputation. All three claims were dismissed.
Justice Gaul concluded that choosing an education program is a serious, and expensive, decision involving a high degree of care. In contrast, the two student complainants acted carelessly in not closely examining their search results. Their mistakes were because of their own oversight and lack of attention, not because of the College’s deception.
Justice Gaul was not convinced that the College’s keyword advertising had led or could lead someone astray. Even if a student erroneously chose one of the College’s sponsored links, the information found on the website would inform the student that it related to one of the College’s institutions.
Justice Gaul found that the College did not use the business names or trade-names of competitors to misidentify its institutions, nor was its advertising designed to mislead anyone. As such, the College’s internet advertising strategy did not breach the Agency’s false advertising bylaw.
This decision was within the context of the misleading advertising bylaw under the Private Career Training Institutions Act and did not consider rights under the Trademarks Act. Jurisprudence in the United States and Europe has considered internet keyword advertising in the trademark context; however, the propriety of the use of a competitor’s trade-mark in internet keyword advertising under the Trade-marks Act, and whether such advertising constitutes “use” of a trade-mark, still remains to be clarified in Canada.