Purchasing Keywords for Search Engine Optimization: “Passing-off”?

In its decision issued on January 26, 2017 (2017 BCCA 41), the British Columbia Court of Appeal (BCCA) overturned the British Columbia Supreme Court’s (BCSC) initial decision in Vancouver Community College v Vancouver Career College (Burnaby) Inc, (2015 BCSC 1470).

In the BCSC case, the Plaintiff, Vancouver Community College, alleged that the Defendant, Vancouver Career College, misrepresented its educational services as those of the Plaintiff’s. At issue was the use of the short form “VCC”:

• The Plaintiff, Vancouver Community College, asserted trademark rights in “VCC” as a short form of its name;

• The Defendant, Vancouver Career College, used the domain “VCCollege.ca” for its website.

The Plaintiff argued that through a keyword online advertising and search engine optimization strategy campaign adopted by the Defendant, the Defendant infringed on the Plaintiff’s trademark rights to the term “VCC”.

How so? Well, the Defendant purchased “VCC” as a keyword for the search engines Google and Yahoo!. This meant that anytime an internet user typed “VCC” into the either of the two search engines, the user would receive a sponsored link to the Defendant’s website displaying the domain name “VCCollege.ca”.

The Plaintiff saw this as problematic, stating that multiple students, prospective students, and other internet users who used the term “VCC” in online search engines were directed to the Defendant’s website mistakenly thinking it was the same institution as the Plaintiff’s. It was also noted that once on the Defendant’s website, “VCC” was not even displayed. For the Plaintiff, the purchasing of its trademark as a keyword for search engines caused consumer confusion, thus constituting “passing-off”.

The BSCS held that the timeframe for assessing whether confusion occurs among users is not to be evaluated at the search engine results page; rather, according to the BCSC, it was when the user had later reached and viewed the Defendant’s website. Subsequently, the court stated that although entering “VCC” into a search engine may have led users to the Defendant’s website, once on the Defendant’s website, it was clear that it belonged to the Defendant, and not the Plaintiff. As a result, the BSCS held that no misrepresentation had taken place, and the Defendant was not held liable for “passing-off”.

On appeal, the BCCA reversed this reasoning. According to the BCCA, confusion and the user’s first impression is to be assessed at the earlier stage: that of the search engine results page displaying the Defendant’s sponsored link. The BCCA held that the BCSC erred in assessing confusion at a later stage, i.e., when the user was on the Defendant’s website. At paragraph 71 of the decision, Saunders J.A. stated, “In my view, it was an error for the judge to discount the likelihood of confusion before the searcher arrives at the landing page of the website.” The BCCA was also mindful to avoid sending the message that merely purchasing a competitor’s trademark as a keyword is sufficient in itself to constitute “passing off”. The BCCA stated that the nature, message, and content of the sponsored link that appears as a result of the keyword is what matters. At paragraph 72, Saunders J.A. explains, “…the critical factor in the confusion component is the message communicated by the defendant. Merely bidding on words, by itself, is not delivery of a message.” After considering this, the BCCA concluded that the Defendant had not displayed any content that would distinguish its business from that of the Plaintiff, and was therefore liable for misrepresentation, confusion, and “passing-off”.