B.C. Supreme Court Rules On Keyword Dispute

As online advertising changes the marketing landscape, the use of sponsored links and keyword advertising is testing the scope of trademark rights. The sometimes controversial practice of "keyword advertising" (such as Google AdWords) was at issue in a recent passing off action from the British Columbia Supreme Court. The Court held that the defendant Vancouver Career College did not pass off its services as those of the plaintiff Vancouver Community College through its use of the keyword "VCC".1

What You Need To Know

What is Keyword Advertising? A website operator can place bids with search engines like Google for specific keywords to be associated with their website. When a keyword is searched, the search engine will display the highest bidder's ad or website as a "sponsored link" (clearly distinguished from organic results). When that link is clicked, the website operator will be charged the amount of its bid. B.C. Ruling. This decision, which is currently under appeal, is of particular interest to online businesses and those who rely on online advertising. The Court held that keyword advertising is not passing off, and that using a competitor's business name(s) or marks as keywords is an established part of online advertising. To restrain the defendant's use of this service would be to put them at a competitive disadvantage. The Court focused on the advertiser not having control over the process employed by search engines in generating search results. A searcher chooses which sites to investigate and should he/she be led to a competitor's site through keyword advertising, no harm is done as the searcher can retreat from that website upon identifying it as the competitor's and return to the original search. Background and Analysis

Vancouver Community College, the plaintiff, claimed common law trademark rights in "VCC" as an abbreviation of its name and as a term it had used in public marketing. The plaintiff alleged Vancouver Career College misrepresented its educational services as those of the plaintiff through keyword advertising.

Subsection 7(b) of the Trade-marks Act prohibits selling goods or services in such a way as to cause confusion between the goods and services of another. To succeed in an action for passing off, the plaintiff needed to satisfy the court that it enjoys goodwill in the trademark, and that the trademark has acquired distinctiveness (i.e., a "secondary meaning") in the marketplace. The plaintiff also needed to...