Robert Dewald is a JD Candidate at Osgoode Hall Law School
Online advertising is a growing and lucrative business. In 2009, $22.7 billion USD was spent on online advertising within the U.S. which is projected to grow to $25.1 billion USD by 2010. A significant amount of this revenue is generated by Google, Yahoo and other search engines which allow targeted advertising linked to keywords entered when searching the internet. Advertising can be linked to any word, even those registered as trademarks for a competing company. This advertising technique allows the bidders to have their website posted as a sponsored link above the organic search results, potentially diverting customers away from the website initially sought after.
Private Career Training Institutions Agency v. Vancouver Career College is Canada’s first jurisprudence regarding keyword advertising on search engines. In this decision the Private Career Training Institutions Agency (the Agency) sought a permanent injunction restraining Vancouver Career College (Burnaby) Inc. (VCC Inc.) from attaching their advertising (i.e. being a sponsored link) to keywords that include the business names of other educational institutions.
VCC Inc. is subject to the BC Private Career Training Institutions Act, SBC 2003, c 79 and bylaw 29, passed under this Act, prohibits institutions such as VCC Inc. from engaging in advertising that is false, deceptive or misleading. The Agency alleged that VCC Inc.’s use of competitors’ business names as keywords in their Google or Yahoo advertisements was in violation of Bylaw 29, and was designed to mislead students seeking information about one institution, away from that institution, and towards one of its own.
To further its argument, the Agency utilized two accounts of complainants being mislead by VCC’s advertising. The first complainant registered at VCC Inc. in error, thinking it was the Vancouver Community College, while the second sought information about the Vancouver Institute of Media Arts but selected the sponsored link of VCAD instead. Upon discovering her error the first complainant was given a full refund.
In arriving at his decision Justice Gaul consulted Canadian Trade-mark jurisprudence and U.S. case law regarding advertising using keyword searches. Justice Gaul concluded that VCC Inc. had not misled the complainants and that VCC’s use of competitors’ business names, as keywords, within its internet advertising campaign did not contravene Bylaw 29. Justice Gaul found that the complainants “were not misdirected or led astray by anything other than [their] own oversight” (PCTIA v. VCC, para. 75) and accepted as fact that VCC had not "ever used the names of competitors or trademarked terms in the title line, description line or URL of its online advertisements." (PCTIA v. VCC, para. 26).
This decision is entirely appropriate. Consumers on the internet should always adopt a ‘buyer beware’ attitude, especially when browsing educational institution or other products on the internet. As long as a competitor’s business name is not used directly in the advertisement, this form of advertising is no different than placing an ad, next to a competitor’s, in the yellow pages, or newspaper. Providing a variety of options for consumers to consider, informs search engine users, allowing them to make informed decisions regarding which products to buy or what school to attend. This free market approach to keyword advertising on search engines benefits both advertisers and consumers and is a solid precedent for the rest of Canada to follow.