BC Court of Appeal Finds Using Trademarks as Keywords in Internet Advertising Constitutes Passing Off

Vancouver Community College v Vancouver Career College (Burnaby), 2017 BCCA 41, concerns the use of competitors’ marks in the context of keyword internet searches. The appellant claimed that the respondent’s use of its official mark “VCC” in their internet advertising and domain name (VCCollege.ca) constituted passing off. The appellant further asserted that the respondent’s use of the official marks “VCC” and “Vancouver Community College” in keyword advertising, was a breach of official marks, contrary to the Trade-marks Act.

As previously reported in the E-TIPS^® newsletter, the trial judge found that none of the three elements of passing off – goodwill, public confusion and damage – could be established (2015 BCSC 1470). The BC Court of Appeal overturned the lower court on each ground.

The Court of Appeal found that the VCC mark held sufficient goodwill to satisfy the test.

The Court of Appeal rejected the lower court’s determination on the point at which to assess confusion. The lower court held that confusion should be assessed from the point that the searcher reached the advertiser’s website, after they had clicked on an advertisement displaying the mark(s). The Court of Appeal found that confusion should be assessed from the searcher’s first encounter with the search results (initial interest confusion).

The Court of Appeal further found that the findings of goodwill and confusion were sufficient to establish damage.

Lastly, the Court of Appeal held there were insufficient findings of fact to determine the claim of breach of official marks and remitted the issue back to the trial court.