PCTIA v. VCC - 2010

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation: Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc.,

2010 BCSC 765 Date: 20100528

Docket: S096031 Registry: Vancouver

IN THE MATTER OF SECTION 24 OF THE PRIVATE CAREER TRAINING INSTITUTIONS ACT, S.B.C. 2003, c. 79

Between:

Private Career Training Institutions Agency Petitioner

And

Vancouver Career College (Burnaby) Inc. d.b.a. Vancouver Career College and CDI College,

Vancouver College of Art and Design Respondents

Before: The Honourable Mr. Justice G.R.J. Gaul

Reasons for Judgment

Counsel for the Petitioner: N. T. MithaA. Alibhai

Counsel for the Respondents: L. BrasilW. Branch

Place and Date of Hearing: Vancouver, B.C.October 16 and November 5, 2009

Place and Date of Judgment: Vancouver, B.C.May 28, 2010

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Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc.

Introduction

[1] The petitioner, the Private Career Training Institutions Agency (the “Agency”),

is a provincial regulatory body created by the Private Career Training Institutions

Act, S.B.C. 2003, c. 79 (the “Act”), to oversee career training institutions that operate

throughout British Columbia.

[2] Vancouver Career College (Burnaby) Inc. (“VCC Inc.”) provides a variety of

post-secondary educational services under various business names, including

Vancouver Career College (“VCC”), CDI College (“CDI”) and Vancouver College of

Art and Design (“VCAD”). At all material times, each of VCC, CDI and VCAD were

registered with the Agency as career training institutions. As members of the

Agency, the respondents and each of them are obliged to comply with its bylaws.

[3] For the sake of convenience and clarity, I will refer to all of the respondents

collectively as VCC Inc.

Nature of Relief Sought

[4] The Agency seeks a permanent injunction restraining VCC Inc. from

contravening Bylaw 29 of the Private Career Training Institutions Bylaws (the

“Bylaws”) which prohibits misleading advertising.

[5] Specifically, the Agency seeks an order prohibiting VCC Inc. from using the

business names of other member institutions in connection with its internet

advertising strategy.

Issue

[6] The issue before the Court is whether VCC Inc.’s internet marketing strategy

and mode of promoting itself is false, deceptive or misleading and therefore in

breach of the Agency’s bylaw relating to advertising.

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[7] Both parties have agreed that if the answer to the question is affirmative, then

the injunction sought by the Agency should be granted. Inversely, if the answer is

negative, then no injunction is warranted and the petition should be dismissed.

Facts

Jurisdiction of the Agency

[8] The objects of the Agency are set out in s. 3 of the Act as follows:

a) To establish basic education standards for registered institutions and to provide consumer protection to the students and prospective students of registered institutions;

b) To establish standards of quality that must be met by accredited institutions;

c) To carry out, in the public interest, its powers, duties and functions under this Act.

[9] Section 6 of the Act permits the Agency to enact bylaws to regulate the

conduct of its member institutions. In particular, s. 6(1)(m) authorizes the Agency to

enact bylaws regulating and prohibiting advertising or types of advertising used by

registered or accredited institutions.

[10] The Bylaws came into effect on June 1, 2009. Bylaw 29(1) of the Bylaws is

the subject the present dispute as it prohibits false and misleading advertising.

Bylaw 29(1) states:

An Institution must not engage in advertising or make a representation that is false, deceptive or misleading. Deceptive advertising includes but is not limited to an oral, written, internet, visual, descriptive or other representation that has the capability, tendency or effect of deceiving or misleading a consumer.

[11] Bylaw 29(2) requires that “an Institution must use the operating name under

which it is registered by the Agency in advertising.”

[12] There has been no challenge to the validity of the Act or the Bylaws; as a

result, the jurisdiction of the Agency to enact and enforce the Bylaws is not in issue.

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[13] The Agency’s petition for an injunction is founded upon s. 24(1)(a) of the Act

which stipulates:

24 (1) On application by the agency, the Supreme Court may grant an injunction

(a) restraining a person from contravening this Act, the regulations or the bylaws if the court is satisfied that there are reasonable grounds to believe that the individual or organization has contravened or is likely to contravene this Act, the regulations, or the bylaws.

Keyword Advertising Generally

[14] Internet search engines collect and store data about websites, including

keywords contained in the website and the location of the website. When a user

enters a query into a search engine such as Google or Yahoo, the search terms are

compared to the website information stored in the search engine. The search engine

then produces a list of websites, which are ranked according to relevance, as

determined by the search engine.

[15] One way in which a website operator can attempt to increase the traffic to

their website is through the use of pay-per-click advertising. The relevant form of

pay-per-click advertising in the case at bar is keyword advertising (“Keyword

Advertising”). This service allows the website operator to pay search engines for

links to their websites to appear as “sponsored links” alongside the search engine’s

normal or “organic” search results.

[16] In order to use Keyword Advertising, a website operator will create an

advertisement which specifies certain keywords to describe their website and set the

maximum price they are willing to pay to use those keywords. The keywords then

act as a trigger causing the advertisement and the associated link to be displayed.

Specifically, when a user enters a search query containing a triggering keyword, the

search engine checks to see which advertisement is most relevant and has placed

the highest bid for the selected keywords. These advertisements and the associated

links are displayed as “sponsored links” in a prominent location among the organic

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search results. If the user selects one of the sponsored links, that website is charged

according to its bid.

[17] The website operator will provide instructions to the search engine as to how

much money they want to spend in a particular advertising campaign. Those

instructions can be modified daily, depending on the success of the keywords or

campaign. Once the maximum amount of money to be spent in a campaign is

exhausted, including daily maximums, the online advertisement will stop appearing

when the keywords are searched.

[18] Assuming there are funds available in a campaign, all bids on keywords will

result in the online advertisement being displayed if those keywords are used in

conjunction with an online search. The higher the bid, the higher the placement of

the online advertisement. Bids that are not high enough will result in online

advertisements that do not appear on the first results page, which is the most

desirable placement.

[19] Typically, Keyword Advertising is purchased in a campaign where keywords

are grouped around themes aimed at specific marketing goals. For example, an

advertising campaign built around “online degrees” could include keywords such as

“online”, “online degrees”, “online education”, “online studies”, “online training” and

“internet training”. The idea is to try to predict what terms the searcher will use when

looking for a product or service.

[20] The keyword does not need to match the exact search term entered by the

internet user in order to trigger the occurrence of a sponsored link. For example, if

one bids on the keyword “college” and the user searches “Vancouver colleges”, the

results could include the sponsored link.

[21] In addition, keywords are not case sensitive, so if a user searches “Business”,

it may trigger the occurrence of a sponsored link where the word “business” was bid

on.

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[22] The actual online advertisement that appears as a part of Keyword

Advertising typically consists of a title, a description and a URL, and have to fit within

the following prescribed limits:

• For Google online advertisements, the title line is limited to 25 characters;

the two description lines are limited to 35 characters; and the URL is

limited to 35 characters;

• For Yahoo online advertisements, the title line is limited to 40 characters;

the two description lines are limited to 70 characters; and the URL is

limited to 40 characters.

[23] In the context of the present dispute between the parties, it is important to

note that the advertisements that are listed in the search results as “sponsored links”

do not displace or replace the organic search results that typically appear free of

charge when a user conducts an online search. The sponsored links are displayed

along with the organic search results and appear either to the right of the organic

search results, separated by a vertical line, or above the organic search results,

within either a yellow or blue shaded box. In both cases, the sponsored links are

clearly designated as such or as “sponsor results”.

[24] It is also important to note that the person who has conducted a search and

who has chosen to examine a sponsored link can always click on the “back” button

on their browser and return to the original search results page to locate other sites of

interest.

[25] Website operators will sometimes specify trademarks or operating names of

their competitors as triggering keywords, since these terms are often not bid on,

even by their rightful owner. If the owner of the trademark or operating name has not

specified their trademark or operating name as a triggering keyword in conjunction

with Keyword Advertising, or if their bid for these keywords is too low, other

advertisements may appear as a sponsored link and can outrank the rightful owner

of the trademark or operating name. Again, it is important to remember that the

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rightful owner of the trademark or operating name will still appear as part of the

organic search results; they will simply not be positioned in the “sponsored links”

area of those results.

[26] Although some of the materials filed by the Agency complain of VCC Inc.’s

possible use of competitors’ trademarks in its metatags, the evidence before the

Court does not support such a conclusion. On the contrary, VCC Inc. has specifically

denied it has ever used the names of competitors or trademarked terms in the title

line, description line or URL of its online advertisements, and I accept that as a fact.

The Use of Keyword Advertising by VCC Inc. and Other Institutions

[27] Given the demographics and generally high level of computer literacy of

prospective students of VCC Inc. and other private educational institutions, internet

advertising has become increasingly important over time for all such institutions.

Internet searches can often yield between 20,000 to 2,500,000 results and therefore

it is an accepted fact that search engine optimization is critical within the context of

online advertising.

[28] VCC Inc.’s search optimization efforts include pay-per-click Keyword

Advertising services provided by Yahoo and Google under the names “Search

Marketing” or “Google AdWords”.

[29] VCC Inc. acknowledges that it uses Keyword Advertising extensively, bidding

on an excess of 7,000 keywords through Google and Yahoo.

[30] In or around December 2008, VCC Inc. began using the business names of

other institutions as triggers for Keyword Advertising. This led to VCC Inc. having

their school names come up as the first sponsored link when the name of a different

institution was searched.

[31] Throughout the various affidavits filed there are a number of examples of the

sponsored links that appeared as a result of a variety of search terms:

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• A May 4, 2009 search for the term “vanarts” on Google resulted in the first

sponsored link belonging to VCAD. The sponsored link had the title “New

Vancouver Art School” in large font. Underneath the title was the following

URL and description: “www.VCAD.ca Career focused, lower tuition costs

Interior + Fashion, Graphic, 3D”;

• A May 8, 2009 and May 12, 2009 search for the term “vanarts” on Google

resulted in the first sponsored link belonging to VCAD. The sponsored link

had the title “Art Institute – Vancouver” in large font. Underneath the title

was the following URL and description: “www.VCAD.ca VCAD - Graphic

Design, 3D Animation Interior + Fashion Design Programs”;

• A June 6, 2009 search for the term “vanarts” on Google resulted in the first

sponsored link belonging to VCAD. The sponsored link had the title

“Vancouver Art College” in large font. Underneath the title was the

following URL and description: “www.VCAD.ca VCAD - Graphic Design,

3D Animation Interior + Fashion Design Programs”;

• August 4, 2009 searches for the terms “vfs”, “Vancouver film school” and

“art institute of Vancouver” on Google all resulted in the first sponsored

link belonging to VCAD. The sponsored link had the title “Vancouver Art

College” in large font. Underneath the title was the following URL and

description: “www.VCAD.ca VCAD – Graphic Design, 3D Animation

Interior + Fashion Design Programs”;

• An August 5, 2009 search for the term “vanarts” on Yahoo resulted in the

first sponsored link belonging to VCAD. The sponsored link had the title


following URL and description: “VCAD – Graphic Design, 3D Animation

Interior + Fashion Design Programs.

Go. www.VCAD.ca/vancouverartcollege”;

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• August 5, 2009 searches of the terms “Vancouver film school” and “art

institute of Vancouver” on Yahoo resulted in the second sponsored link

belonging to VCAD. The sponsored link had the title “Vancouver Art

College” in large font. Underneath the title was the following URL and

description: “VCAD – Graphic Design, 3D Animation Interior + Fashion

Design Programs. Go. www.VCAD.ca/vancouverartcollege”; and

• An August 6, 2009 search for the term “vanarts” on Google resulted in the

first sponsored link belonging to VCAD. The sponsored link had the title


following URL and description: “www.VCAD.ca VCAD – Graphic Design,

3D Animation Interior + Fashion Design Programs”.

[32] There is also evidence that other accredited institutions use Keyword

Advertising:

• A July 15, 2009 search for the term “CDI College” on Google resulted in

the first sponsored link belonging to the Art Institutes. The sponsored link

had the title “BC Design College” in large font. Underneath the title was

the following URL and description: “The Art Institutes – Get Info on the

Media Arts Program. www.artinstutites.edu”. Clicking on the web address

led to the webpage for the Art Institute of Vancouver (“AIV”), a competitor

of VCC Inc.’s;

• A September 15, 2009 search for the term “VCAD” on Google resulted in

the first sponsored link belonging to the Art Institutes. The sponsored link

had the title “The Art Institutes” in large font. Underneath the title was the

following URL and description: www.artinstitutes.edu Pursue Your

Passion. Get Info on Classes in Vancouver. Apply Now! Clicking on the

web address led to AIV’s webpage; and

• A September 25, 2009 search for the terms “Vancouver College of Art and

Design” and “Vancouver Career College” on Google resulted in a

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sponsored link for “The Art Institute Offers” and “The Art Institute of BC”

both of which led to the AIV’s webpage.

Chronology of Complaints

[33] Beginning in April 2009, the Agency received complaints from several

member institutions, including AIV, regarding VCC Inc.’s use of Keyword

Advertising.

[34] At their meeting on June 18, 2009, the Agency’s Board of Directors discussed

the issue of the use of “AdWords” marketing by some member institutions, including

VCC Inc.

[35] On June 24, 2009, as a result of a motion passed at the Board’s meeting of

June 18, the Agency sent to all of its member institutions the following Bylaw

Interpretation / Information Guideline (the “Interpretation Guideline”) regarding

Bylaw 29(1):

With respect to internet advertising, the PCTIA Board agreed by motion at its meeting of June 18, 2009 that the use of another institution’s trademarks, logo, or business name, or anything confusingly similar, by a registered institution in any metatags (website or html), search engine AdWords, adCenter keywords, or any similar medium for advertising purposes shall constitute false, deceptive or misleading activity within the meaning of Bylaw 29(1), and is prohibited.

[36] The Interpretation Guideline was issued to articulate the Agency’s view of the

purpose and scope of Bylaw 29. It was not intended to have and does not have the

same force as a bylaw under the Act and is not a tool the Court can use in its

statutory interpretation of Bylaw 29.

[37] In or around the time the Interpretation Guideline was issued, the Agency

received complaints from two students who claimed they had been misled by the

internet advertising of VCC Inc.

[38] The first student, Carlin Eppele, searched the term “Vancouver Community

College” and subsequently clicked on a sponsored link for VCC. Ms. Eppele followed

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through with VCC and eventually registered for a course at that institution before

realizing that it was not the institution she had intended on attending.

[39] It should be noted that Ms. Eppele registered with VCC after having had a

one and one-half hour personal interview with a VCC representative, as well as

having met with a financial administrator of the institution and successfully

completed an admissions test.

[40] When Ms. Eppele discovered she had registered at VCC in error, she was

able to withdraw from the institution and receive a refund of the registration fee she

had paid.

[41] The second student, Janessa Patterson, had heard of the Vancouver Institute

of Media Arts (“VanArts”) through advertising and searched the term “VanArts” on

the internet to obtain further information about the institution. The results of her

search disclosed sponsored links for both VanArts and VCAD. Ms. Patterson

followed the first link to the VCAD website because she “assumed that VCAD was

another name for VanArts, because the link to this website had come up in response

to my Google search for VanArts.” She subsequently filled out the form to request

additional information about the institution available on that website. Ms. Patterson

also followed the second link, because she “assumed that this was another website

for VanArts.” She also filled out the form available on that website to request

additional information about the institution. When she was contacted by both

institutions, she realized they were different, and cancelled her appointment with

VCAD because “they did not offer the program I wanted to enrol in. As such, I did

not want to waste my time touring VCAD.”

Position of the Agency

[42] The Agency argues that it has been vested with the regulatory power to

provide consumer protection to students and prospective students of registered

institutions and to regulate the quality of these institutions. According to the Agency,

the issue before the Court must be examined from a consumer protection

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prospective and not one concerned with the restriction of trade between commercial

parties.

[43] The core of the Agency’s argument is that Bylaw 29 was created and enacted

to protect the consumer, in this case students or potential students, by prohibiting

member institutions from engaging or using advertising which has the capacity of

being deceptive or misleading. The Agency maintains that there is no exception for

advertisements which temporarily mislead students. Consequently, the Agency

asserts that an advertisement is prohibited when it may mislead some of the people,

some of the time, even if, upon being misled, those people are subsequently

informed of their mistake and are able to correct it.

[44] The Agency alleges that VCC Inc. has engaged in false, deceptive or

misleading advertising, contrary to Bylaw 29 in two different ways:

a) Using competitors’ business names as keywords in their Google or

Yahoo advertisements; and

b) Failing to use its own business name in its internet advertising.

[45] In advancing its claim that VCC Inc.’s internet advertising program breaches

Bylaw 29, the Agency asserts that the strategy is clearly designed to lead students

seeking information about one institution away from that institution and towards one

of its own.

[46] The Agency maintains that if the Court is satisfied that VCC Inc.’s actions

have or may have the effect of leading a potential student astray or provide them

with an incorrect impression about the services being offered by other institutions

registered with the Agency, then VCC Inc.’s conduct violates Bylaw 29.

[47] The Agency points to Ms. Eppele and Ms. Patterson as real-life examples of

consumers who were allegedly misled when they conducted internet searches, and

uses them as proof that VCC Inc.’s advertising offends Bylaw 29.

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Position of VCC Inc.

[48] VCC Inc. has candidly acknowledged that as a part of its on-going

promotional program, it bids on certain business names in connection with Keyword

Advertising on Yahoo and Google. It argues that a significant portion of students

who originate from web inquiries come from Keyword Advertising and therefore this

means of advertising is a vital element of its online marketing strategy.

[49] VCC Inc. denies that such an advertising practice is false, deceptive or

misleading and in any way in breach of Bylaw 29. Similarly, it denies that it has

engaged in any online advertising without using its registered operating name.

[50] VCC Inc. asserts that its internet advertising strategy is essentially a modern-

day technological version of the generally accepted marketing practice of a company

placing its advertisement in close proximity to a competitor’s advertisement.

[51] VCC Inc. maintains that the Agency has no factual foundation to claim VCC

Inc.’s internet advertising strategy is confusing or misleading to prospective

students. In particular, VCC Inc. argues the two cases proffered by the Agency as

examples of students led astray by VCC Inc.’s internet advertising are of little

evidentiary value as they eventually obtained what they were searching for and were

therefore not misled or deceived.

[52] VCC Inc. claims that the Agency’s position on Bylaw 29 as evidenced by its

Interpretation Guideline and its decision to treat the bidding on trade names or

business names as part of Keyword Advertising as false, deceptive or misleading

advertising, is a reverse engineered attempt to respond to the concerns of other

competitor institutions, not student concerns. In making this point, VCC Inc.

underscores the suspicious fact that it was only after the Agency had concluded that

the type of internet advertising VCC Inc. uses breaches Bylaw 29 that the complaints

of Ms. Eppele and Ms. Patterson arose.

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Jurisprudence

[53] The proper approach to the interpretation of Bylaw 29 is set out in E.A.

Driedger, The Construction of Statutes (Toronto: Butterworths, 1974) at p. 67 and

affirmed by Iacobucci, J. in Bell ExpressVu Limited Partnership v. Rex, [2002]

2 S.C.R. 559, 2002 SCC 42, at para. 26:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament ... [“Driedger’s Modern Approach”].

[54] In Director of Trade Practices v. Household Finance Corporation of Canada,

[1976] B.C.J. No. 1316 (S.C.) the Court was faced with an alleged breach of s. 2(1)

of the former Trade Practice Act, R.S.B.C. 1974, c. 96 (now repealed), which read in

part:

2 (1) For the purposes of this Act, a deceptive act or practice includes

(a) any oral, written, visual, descriptive, or other representation, including non-disclosure; or

(b) any conduct

having the capability, tendency, or effect of deceiving or misleading a person.

[55] In addressing the meaning of “misleading”, Hutcheon J. observed at paras. 18

and 20:

[18] There is no definition in the Act of “deceiving or misleading”. A dictionary definition of “mislead” which seems to me to convey the flavor of the representations stated in s. 2(3) to constitute a deceptive act or practice is “to lead astray; to cause to go in the wrong direction” (Dictionary of Canadian English – The Senior Dictionary).

…

[20] Having in mind the examples of deceptive acts given in s. 2(3), I conclude that 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.

[56] The meaning of “mislead” was also considered in Lotte Enterprises v. B.C.

(Private Post-Secondary Education Commission), 2001 BCSC 1613. In that case,

Pitfield J. quashed an order of the Agency’s predecessor, the Private Post-

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Secondary Education Commission, which directed a registered institution to refund

the tuition fees of a student because of an alleged misrepresentation on the part of

the institution regarding the qualifications of its instructors. When addressing the

question of whether the student in question was misled by the representation,

Pitfield J. opined at para. 23:

There is no reason to give the word “misled” any meaning other than that which it has in its ordinary context. In the Shorter Oxford English Dictionary “mislead” is defined to mean “lead astray in action or conduct; cause to have an incorrect impression or belief; lead or guide in the wrong direction”. In another authority to which I was referred, “mislead” is described as “caused to have a wrong impression about someone or something”.

[57] While counsel were unable to bring to my attention any Canadian

jurisprudence that has directly addressed Keyword Advertising, this kind of

marketing has been the subject of judicial consideration in the United States.

[58] Merck & Co. V. Mediplan Health Consulting, 425 F. Supp. 2d 402 (U.S.D.C.,

N.Y.), a decision of the United States District Court for the Southern District of New

York, involved six cases all relating to the operations of Canadian online pharmacies

selling generic versions of the plaintiff’s medication Zocor to U.S. consumers.

Several of the defendants promoted their services by way of Keyword Advertising

with Google and Yahoo, so that when a consumer searched the internet using either

of those search engines and entered the word “Zocor” as its query, the defendants’

websites were listed in a prominent position in the search results as “sponsored

links”. In granting the defendant’s motion to dismiss a claim based upon the bidding

on trademarks in connection with Keyword Advertising, Chin D.J. concluded:

Here, in the search engine context, defendants do not “place” the ZOCOR marks on any goods or containers or displays or associated documents, nor do they use them in any way to indicate source or sponsorship. Rather, the ZOCOR mark is “used” only in the sense that a computer user’s search of the keyword “Zocor” will trigger the display of sponsored links to defendants’ websites. This internal use of the mark “Zocor” as a key word to trigger the display of sponsored links is not use of the mark in a trademark sense...

As the Second Circuit observed in 1-800 Contacts, “[a] company’s internal utilization of a trademark in a way that does not communicate it to the public is analogous to an individual’s private thoughts about a trademark.” 414 F. 3d at 409 ... Moreover, it is significant that defendants actually sell Zocor ...

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on their websites. Under these circumstances, there is nothing improper with the defendants’ purchase of sponsored links to their websites from searches of the keyword “Zocor”.

[59] In Government Employees Insurance Company v. Google Inc. et al., 2005

U.S. Dist. LEXIS 18642 (E.D. Va.), the United States District Court for the Eastern

District of Virginia (Alexandria Division) found that no confusion arose from Google’s

use of the plaintiff’s trademark as a keyword. The plaintiffs in that case alleged that

Google had engaged in unfair competition by, amongst other things, allowing

advertisers to bid on the term “Geico” for the purposes of Keyword Advertising. In

particular, Geico argued that the sponsored links which appeared when customers

searched for the term “Geico” were misleading “because of the implied association

of those sites with the Geico search term.” In rejecting this argument, the Court

concluded that as long as the word “Geico” did not appear in the heading or text of

the advertisement, there was no likelihood of confusion.

[60] The final American authority that I will reference is J.G. Wentworth, S.S.C.

Limited Partnership v. Settlement Funding LLC, 2007 U.S. Dist. LEXIS 288 (E.D.

Penn.). In that case the plaintiff, a finance company, alleged that a competitor was

engaged in acts of trademark infringement, false representation, and injury to

business reputation in connection with the use of the plaintiff’s name in its Keyword

Advertising efforts. The defendant brought a motion to dismiss the plaintiff’s claim on

the basis that there was no likelihood of confusion. In allowing the application and

dismissing the claim, O’Neil J. of the United States District Court for the Eastern

District of Pennsylvania concluded:

Likelihood of confusion exists where “consumers viewing the mark would probably assume that the product or service it represents is associated with the course of a different product or service identified by a similar mark ...

...

I respectfully disagree with the Ninth Circuit’s conclusion in Brookfield. The Court asserted that “[w]eb surfers looking for [plaintiff’s] “MovieBuff” products who are taken by a search engine to [defendant’s website] will find a database similar enough ... such that a sizeable number of consumers who were originally looking for [plaintiff’s] product will simply decide to utilize [defendant’s] offerings instead”. Id. I find this to be a material

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mischaracterization of the operation of internet search engines. At no point are potential consumers “taken by a search engine” to defendant’s website due to defendant’s use of plaintiff’s marks in meta tags. Rather, as in the present case, a link to defendant’s website appears on the search results page as one of many choices for the potential consumer to investigate. As stated above, the links to defendant’s website always appears as independent and distinct links on the search results page regardless of whether they are generated through Google’s AdWords program or search of the keyword meta tags of defendant’s website.

[61] Although apparently no Canadian court has opined on the propriety of

Keyword Advertising that uses the business name of competitors, in my view resort

can be had to the Canadian jurisprudence that has developed in the area of

trademark law in order to glean what is meant by the term “confusing” or

“misleading” in the context of alleged improper advertising. An essential element to a

claim of statutory passing-off under s. 7(b) of the Trade-marks Act, R.S.C. 1985,

c. T-13 is the presence of “confusion”.

[62] To determine whether trademarks are confusing, the Court must make a

determination of their effect on those persons who normally comprise the relevant

market. The average consumer will not be the same for different products, and will

not have the same attitude at the time of purchase: United Artists Corp. v. Pink

Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.).

[63] Moreover, in assessing the likelihood of confusion, the Court ought to give the

average consumer a certain amount of credit. Consumers are not generally

completely devoid of intelligence or of normal powers of recollection; nor are they

totally unaware or uniformed as to what goes on around them. The overriding

consideration regarding the likelihood of confusion is “all the surrounding

circumstances”. This allows the Court to examine and assess any and all facts

peculiar to the case before it: Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22.

Analysis

[64] At the outset I note that I do not find, on the evidence before me, that VCC

Inc. uses or has used metatags in its internet advertising program. This argument

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was not advanced with any vigour by the Agency and I find its decision not to do so

was appropriate in the circumstances of this case. Nor do I find that the institutions

that form part of VCC Inc. have failed to use their proper names in their internet

advertising.

[65] The only question before me is whether VCC Inc.’s use of Keyword

Advertising and more particularly the adoption and use of competitors’ names in that

form of internet marketing is misleading.

[66] I accept the Agency’s argument that the Court’s analysis must not lose sight

of the Agency’s consumer protection mandate and the fact that Bylaw 29 was

passed in order to protect any potential student from being deceived and potentially

harmed by misleading advertising.

[67] In the present case, the services that are being advertised through VCC Inc.’s

online advertising campaign are post-secondary education courses which can range

from 3 to 18 months in terms of study commitment and cost between $4,000 and

$24,000. Embarking upon an educational program involves a serious decision and,

in my view, the extent of the financial and personal commitment expected of

prospective students requires that they should, and can be expected to, exercise a

high degree of care in making their decisions as to which school they should attend.

[68] The Agency says the conduct of VCC Inc. in purchasing the words of a

competitors’ name for the purposes of Keyword Advertising on the internet is

designed to do one thing: lead prospective students seeking information about the

competitor institution away from that institution and towards its own institutions. The

Agency says that on a plain, purposive reading of Bylaw 29, VCC Inc.’s use of other

institutions’ names for Keyword Advertising has actually and will continue in the

future to deceive and mislead students and potential students.

[69] The Agency has offered two examples of students who apparently went to the

website of a VCC Inc. institution when they thought they were going to some other

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institution’s website. In my view, these mistakes on the part of the students were not

prompted or caused by VCC Inc.’s Keyword Advertising.

[70] In the spring of 2009, Ms. Eppele was interested in pursuing a career as a

pharmacy technician. She had been told by a friend that Vancouver Community

College offered such a program and decided to make further inquiries to determine if

she should register for that program. As a part of her investigation, Ms. Eppele

conducted an internet search which she describes as follows:

After Googling Vancouver College, I clicked on the first listing which came up. The first listing was in a slight brownish yellowish tinge, and I thought that it was the Vancouver Community College. I did not realize at the time that it was in fact Vancouver Career College.

In any event, I clicked on the first item which came up in the Google search, and called for directions and an appointment.

I made an appointment for June 1, and attended at the appointment and met with a woman by the name of Ms. Elizabeth Liang. I asked Ms. Liang some questions, and particular questions about the practicum, and was told that it would likely not be in a hospital, but that maybe I could arrange for that on my own. I was a little bit surprised, but thought that perhaps my friend had misinformed me about this aspect of the course. In any event, thinking that I was signing up with the Vancouver Community College, I signed up, and registered for the course.

One day later, on June 2, I realized that I had signed up for a course with the incorrect institution ...

...

I had always intended to sign up for the course with the Vancouver Community College, and had in fact Googled Vancouver Community College in order to find information about them and to take the course there. When I saw the first result of the Google search, I simply clicked on it and I was misled into thinking that it was the Vancouver Community College.

[71] In my opinion there are a number of important questions left unanswered by

Ms. Eppele’s evidence:

a) When she called the telephone number she obtained from her internet

search and spoke with a representative of VCC, did she tell that

person that she was looking to register at Vancouver Community

College?

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b) When she met with Ms. Liang of VCC, did Ms. Eppele say she wanted

to register at Vancouver Community College? Of the questions she

says she asked Ms. Liang, did Ms. Eppele ask whether Vancouver

Community College and Vancouver Career College were the same or

associated institutions?

c) When she became “surprised” that the program offered by VCC did not

match the description of the program she was looking for, did she tell

Ms. Liang what her friend had told her about the Vancouver

Community College program?

[72] On the whole, I am unconvinced by Ms. Eppele’s evidence and reject the

assertion that she was deceived or misled in any way by VCC Inc. Ms. Eppele

obviously did not examine the results of her Google search very closely, as if she

had, she would have discovered that the choice she made was not the one she

wanted. That fact was, or should have been, clear to her. By “simply clicking” on the

first result she found without properly examining it before she did, I find Ms. Eppele

was careless and the resulting problems she had flowed from that fact and not from

anything done by VCC Inc.

[73] In my view, the second example of what the Agency claims is a student who

was victimized by the misleading advertising of VCC Inc. suffers from similar

weaknesses as the first. Ms. Patterson is presently enrolled at VanArts and she

summarizes her internet search experience and eventual enrolment at VanArts as

follows:

During May of 2009, I came across an advertisement for VanArts which was posted on the social networking site Facebook. In order to obtain more information about the institution, I went to the internet and typed the name “VanArts” into the Google search engine.

My search resulted in several links with the first being a link to the website for “Vancouver Art College” and the second being a link to the website for “VanArts School”. Based on my search terms, I thought that both websites were for VanArts or institutions affiliated with VanArts. As such I decided to visit both websites ...

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I clicked on the first link for Vancouver Art College, and was taken to a website for the Vancouver College of Art and Design (“VCAD”). I assumed that VCAD was another name for VanArts because the link to this website had come up in response to my Google search for VanArts. I did not study the website in any great detail, but simply filled out the form to request additional information about the institution ...

I then went back to my Google search results and clicked on the second link for VanArts School. I was taken to another website, which looked very similar to the first. I assumed that this was another website for VanArts. Again, I did not study the website in any great detail, but simply filled in the form to request additional information about the institution.

[74] Ms. Patterson was puzzled when she was contacted by both schools to

arrange for tours of their respective facilities. She conducted another Google search

for VanArts and again found in the search results links for both VanArts and VCAD.

According to Ms. Patterson’s evidence, “It was at that point that I began to suspect

that the two institutions may not actually be related”.

[75] I find Ms. Patterson was as imprudent as Ms. Eppele when she conducted

her internet search. Moreover, I find Ms. Patterson was not misdirected or led astray

by anything other than her own oversight. I accept Ms. Patterson developed an

incorrect impression; however that impression was not caused by VCC Inc. Had

Ms. Patterson paid a reasonable amount of attention to what she was doing, she

would have noticed that VCAD and VanArts were not the same institutions.

Moreover, had Ms. Patterson asked either institution whether it was the same as or

associated with the other, she would have immediately discovered they were not.

There was, in my opinion, no rational foundation for Ms. Patterson to assume the

institutions were the same or associated. Ms. Patterson, like Ms. Eppele, was not

misled, she was mistaken, and the cause of her mistake was not any deception on

the part of VCAD; it was because, as she notes, she “did not study the website in

any great detail.”

[76] In advancing its position, the Agency asks rhetorically: “why would a

prospective student who searches for one institution on the internet make an inquiry

of another institution whose name appears on the search results?” In answering its

own question, the Agency argues the student must have been duped into doing so

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by the deceptive advertising of the other institution. I reject this argument. The

student could just as easily have been interested in a certain program, such as a

program for pharmacy technicians, like Ms. Eppele, and may have been aware that

a certain institution offered such a program. Upon examining the results of her

internet search she would see the institution she was looking for as well as others,

including those institutions that have used Keyword Advertising to locate their

respective advertisements in the more prominent “sponsored links” position. The

student then has an option. She can examine the website of the institution she was

initially looking for that appears in the organic results of her search or she can

examine other institutions, including those listed as “sponsored links”. The results of

her search do not force her, trick her, or tell her to examine those institutions located

in the “sponsored links”. If she chooses to investigate those other institutions, she

does so of her own volition. Having done so, she is able to quickly and easily retreat

from that inquiry and return to her original search results page, with no harm done.

[77] In my view, the answer to the question posed by the Agency does not have to

lead to the conclusion that the second institution, having used Keyword Advertising

incorporating the business name of its competitors, is attempting to misdirect

students away from the competitor’s website and improperly and deceptively

towards their own website.

[78] The Agency has not persuaded me that VCC Inc.’s Keyword Advertising

strategy has actually or could in the future lead a potential student astray or into

making a harmful error of judgement. Where a student erroneously chooses to

examine a VCC Inc. “sponsored link” website instead of the website of the institution

they originally wanted, I am satisfied the information readily available on the various

VCC Inc. websites is more than adequate to inform the student that they are

examining a VCC Inc. institution and not the one they were initially searching for.

The student can then easily return to their search results and locate the website of

the institution they desire. I am also satisfied, on the evidence presented, that

students who actually contact and speak with a representative of a VCC Inc.

institution are informed of the institution’s name and are not mislead or deceived with

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respect to the institution’s identity. If an error has been made and the prospective

student has contacted the wrong institution, then the error would be clearly evident

at this point and corrective measures could easily be taken with no resulting harm to

the student.

[79] The timing of the complaints of Ms. Eppele and Ms. Patterson is, as VCC Inc.

has noted, odd in that they appear to have surfaced after the Agency issued its

Interpretation Guideline. While this could suggest the issuance of the guideline was

driven primarily by a desire to protect competitors’ business interests and not the

well-being of students, I find that issue has little impact on the final resolution of the

issue before the Court and need not be determined.

[80] On the whole, I accept VCC Inc.’s position with respect to the nature, purpose

and propriety of its Keyword Advertising program. I also accept VCC Inc.’s argument

that its practice of using Keyword Advertising is no different than the time-honoured

and generally accepted marketing practice of a company locating its advertisement

close to a competitor’s in traditional media (e.g., placing its Yellow Pages

advertisement next to or in close proximity to a competitor’s telephone number in

the same directory so that potential customers of that competitor discover there is

another company offering a similar product or service and that they, the consumer,

have a choice).

Summary - Conclusion

[81] In summary, I find:

a) VCC Inc. does not use metatags as a part of its internet advertising

strategy;

b) The institutions that form part of VCC Inc. do not hold themselves out

in their internet advertisements as anyone other than who they are

and, in particular, they do not use the business names or trade-names

of their competitors to misidentify themselves;

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c) The use of Keyword Advertising, including the use of competitors’

names, is a advertising practice used by other institutions registered

with the Agency, not only VCC Inc.; and

d) Anyone who uses Google and Yahoo to search for career training

institutions will generally find the school they are looking as well as

others. That person will have the option to investigate the school that

was the target of the initial search and/or investigate others that are

listed in the search results. Nothing compels the person to do one or

the other.

[82] I find VCC Inc’s advertising program, including its use of Keyword Advertising

that incorporates the names of competitor institutions, was not designed to mislead

anyone. The two situations of what the Agency says were students who were

deceived by VCC Inc.’s advertising are, in my opinion, actually examples of students

who made mistakes and it was their own actions or inactions that prompted the

errors. Had they been more cautious in their reviews of their search results they

would have realized that they were looking at a website of an institution other than

the one they were initially seeking.

[83] In my opinion, VCC Inc.’s internet advertising strategy provided Ms. Eppele

and Ms. Patterson with the opportunity to investigate and consider other institutions

besides the ones they were looking for. Not only do I find there is nothing wrong with

that, I think the option to examine a number of institutions offering similar

educational programs is a good one for the consumer.

[84] Having considered and incorporated the principles articulated in the American

jurisprudence on Keyword Advertising as well as the Canadian cases that have dealt

with allegations of confusing or misleading advertising in the context of trademark

disputes, I am satisfied that the impugned advertising strategy of VCC Inc. is not

false, deceptive or misleading. Consequently, I find VCC Inc. has not breached

Bylaw 29.

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[85] The Agency’s petition is dismissed with costs to VCC Inc.

“G.R.J. Gaul, J.” The Honourable Mr. Justice G.R.J. Gaul

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PCTIA v. VCC - 2010

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Transcript of PCTIA v. VCC - 2010