Vancouver Career College v. Vancouver Community College

Vancouver Career College and Vancouver Community College are fighting over who owns the acronym VCC.

The Vancouver Career College case is before the Supreme Court of Canada.

In this trademark confusion case, the issues are:

  1. Respondent bringing passing off action against the applicant with respect to its trademarked name and acronym:
  2. In a passing off action concerning online activity, is the element of confusion to be assessed solely when an array of search results are presented to an internet user, or when the user actually visits a defendant’s website?

Does this Court’s holding in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 concerning “first impressions”, as applied to the internet search context, mean first impressions of the internet search results showing a defendant’s domain name, or first impressions of the defendant’s actual website?



 



Vancouver Career College v. Vancouver Community College Summary

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The respondent, Vancouver Community College is a public post-secondary education institution designated as a college under the College and Institute Act, R.S.B.C. 1996, c. 52. It has operated under that name since 1974 and has two campuses in the Vancouver area. In January, 1999, it caused the Registrar of Trade-marks to publish notice of “VCC” as an official mark; and “Vancouver Community College” as an official mark in October, 2005 under the Trade-marks Act, R.S.C. 1985, c. T-13. The applicant, Vancouver Career College (Burnaby) Inc. is a private college. It is regulated under the Private Training Act, S.B.C. 2015, c. 5. Both entities share the same initials, “VCC”. Vancouver Community College brought a passing off action against Vancouver Career College with respect to the use of the initials “VCC” and for breach of its official marks. Vancouver Community College alleged that Vancouver Career College, principally through keyword advertising, misrepresented its educational services as those of the respondent. Vancouver Community College also alleged the applicant improperly use the initials “VCC” both internally and externally to the world at large. It further alleged the respondent adopted the domain name “VCCollege.ca” thereby creating public confusion.

 


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation: Vancouver Community College v. Vancouver Career College (Burnaby) Inc.,
  2017 BCCA 41

Date: 20170126

Docket: CA43111

Between:

Vancouver Community College

Appellant

(Plaintiff)

And

Vancouver Career College (Burnaby) Inc., dba
Vancouver Career College, also dba CDI College,
also dba Vancouver College of Art and Design,
also dba Eminata Group

Respondent

(Defendant)

Before: The Honourable Madam Justice Saunders

The Honourable Madam Justice D. Smith

The Honourable Mr. Justice Savage

On appeal from:  An order of the Supreme Court of British Columbia, dated August 20, 2105 (Vancouver Community College v. Vancouver Career College (Burnaby) Inc.2015 BCSC 1470 (CanLII), Vancouver Docket No. S122258).

Counsel for the Appellant: C. Wilson
M. Brechtel
Counsel for the Respondent: W.K. Branch, Q.C.
L. Brasil
Place and Date of Hearing: Vancouver, British Columbia

June 2 and 3, 2016

Place and Date of Judgment: Vancouver, British Columbia

January 26, 2017

Written Reasons by:
The Honourable Madam Justice Saunders
Concurred in by:
The Honourable Madam Justice D. Smith
The Honourable Mr. Justice Savage

Summary:

The appellant, Vancouver Community College, is a public post-secondary education institution that alleges passing off by the respondent Vancouver Career College, a private post-secondary education institute, through use of the appellant’s official mark “VCC” in its Internet advertising and domain name. It alleges, also, that Vancouver Career College wrongfully used its official mark “VCC” from 2009 onwards, contrary to the Trade-marks Act. The action was dismissed. The judge found none of the three requirements of passing off – goodwill, public confusion and damage – were established. As to unlawful use of the official marks contrary to the Act, the judge found Vancouver Career College’s use of “VCC” prior to the mark’s becoming an official mark in 1999 allowed continued use. On appeal Vancouver Community College contends that the trial judge erred in his analysis of each of these issues.

Held: appeal allowed. As to passing off, the claim is established and the appellant is entitled to an injunction, with the issue of damages remitted to the trial court for assessment. “VCC” was not required to have a secondary meaning, and a significant body of evidence not referred to in the reasons demonstrates goodwill sufficient to satisfy the requirement. In respect to confusion, the moment for assessing confusion was upon the first encounter when search results appear, not when the searcher arrives at the landing page. In respect to damage, the findings of goodwill and confusion are sufficient to establish damage.

As to the claim under the Trade-marks Act, there are insufficient findings of fact to determine either the application of the official marks provisions or the application of the defence of prior use, considering the questions arising, on the record, of the extent of any use, the lawfulness of such use, and the cessation of use. The claim of breach of official marks contrary to the Trade-marks Act is remitted to the trial court for fresh determination.

 

Reasons for Judgment of the Honourable Madam Justice Saunders:

[1]           This appeal concerns passing off and the use of official marks registered to the appellant Vancouver Community College, in the context of Internet searches. The appellant contends it is entitled to declarations, a permanent injunction and damages for actions taken by the respondent Vancouver Career College (Burnaby) Inc. to direct search traffic to the respondent’s website.

[2]           It is agreed that the relevant date of assessment of the appellant’s claim is 2009, the year the respondent adopted VCCollege as a new trade-mark, adopted VCCollege.ca as a new domain name, and launched a new website using that domain name. The activity of which the appellant complains connects to the respondent’s use of the capitalized initials “VCC” in its Internet presence and the respondent’s bidding on keywords including “VCC” and “Vancouver Community College”. The appellant contends that those phrases have long been associated with it as a public post-secondary institution, and that the respondent’s activity constitutes passing off and infringement of its official marks, in effect, Internet poaching.

[3]           Mr. Justice Affleck dismissed Vancouver Community College’s claim. In this appeal the appellant contends the judge erred in his analysis of both the claim of passing off and the claim of breach of its official marks.

[4]           As to passing off, the appellant contends the judge erred in his treatment of the intrinsic concepts of goodwill and confusion, and following on those errors, erred in finding the appellant had not proven damage.

[5]           As to the appellant’s official marks, the appellant contends the judge erred in finding that the respondent’s use of “VCC” in 1998, before the appellant recorded “VCC” as an official mark, entitled the respondent to use that acronym, and erred in failing to address the coincidence of its official marks with the respondent’s use of them as keywords in Internet searching.

[6]           The appellant agrees that in order to succeed it must either satisfy this court on each of the three issues engaged in a claim of passing off: goodwill, confusion and damage; or satisfy this court that the judge committed a fatal error on the issue of its official marks.

Circumstances

[7]           Vancouver Community College is a college designated under the College and Institute Act, R.S.B.C. 1996, c. 52. Its flagship role in the modern system of public post-secondary education in British Columbia was triggered by the release in January 1963 of Higher Education in British Columbia and a Plan for the Future authored by UBC President John B. Macdonald (Vancouver: UBC Press, 1962), dubbed the Macdonald Report. It is a matter of public record, perhaps rising to the level of notorious fact for those who watched the post-war explosion of post-secondary education in this geographically-challenged province, that Dr. Macdonald proposed a plan for the development of higher education in British Columbia to address expected population growth and increased participation in post-secondary education, projected at that time to place unsustainable pressure on our Province’s then two higher education institutions – the University of British Columbia and Victoria College. President Macdonald proposed the creation of a college system to support UBC and any future universities in the Province, which soon included Simon Fraser University (first students received in September 1965). In particular, Dr. Macdonald advocated for the creation of two-year programmed regional colleges that would provide a bridge for students between secondary and higher post-secondary education. While the Macdonald Report suggested the establishment of regional colleges throughout the Province so as to allow students to gain post-secondary education without travelling far from their home community, the first regional college was proposed in Vancouver.

[8]           Largely in response to the Macdonald Report, the provincial legislature immediately amended the Public Schools Act, R.S.B.C. 1960, c-319. The amendments allowed the establishment of public regional colleges under public school board control.

[9]           Under the Public Schools Act a cabinet committee chaired by the Minister of Education, named the Council on Public Instruction, was responsible for all education matters in the Province. The powers of the Council included the power to establish colleges. By a Minute of the Council dated January 17, 1964, Vancouver City College was created by bringing together the Vancouver Vocational Institute (established in 1949), the Vancouver School of Art (established in 1925) and King Edward Continuing Education Centre (established in 1962).

[10]        In September 1965, Vancouver City College opened at the King Edward Centre on Oak Street and West 12th Avenue, Vancouver, British Columbia, becoming the first two-year community college in British Columbia and one of the first in Canada. The name of the new college was officially changed in 1974 from Vancouver City College to Vancouver Community College by Order in Council 1722-1974. It has operated under that name since.

[11]        Vancouver Community College now has two campuses in Vancouver and nine satellite learning centers in public libraries in Vancouver and Burnaby. As a college designated under the current College and Institute Act, Vancouver Community College is a public institution governed in accordance with the Act. It is limited in the programs and level of education it may offer, and it is charged with obligations of reporting to the minister. The minister, in turn, is charged with reporting annually to the Legislature on the state of post-secondary education and training in British Columbia.

[12]        The appellant caused the Registrar of Trade-marks to publish notice of “VCC” as an official mark on January 13, 1999, and “Vancouver Community College” as an official mark on October 10, 2005, both under theTrade-marks Act, R.S.C. 1985, c. T-13. In referring to the official marks, I use the word “recorded” to describe the process by which a mark of a public authority obtains the protection of the Trade-marks Act.

[13]        The respondent Vancouver Career College (Burnaby) Inc. is a private business. In 1995, a private training school in Abbotsford was purchased, and after a stop in Richmond, British Columbia, in 1997 the respondent moved to an office building in downtown Vancouver, operating a private career college under the name Vancouver Career College. In March 2008, the respondent acquired most of the business of the much larger CDI College, another private college operating more campuses than Vancouver Career College, with the intention of increasing the Vancouver Career College business markedly. It has done so, and now provides services under the name Vancouver Career College in numerous locations after what it describes as “explosive growth”. As a private college, the respondent was regulated in 2009 by the Private Career Training Institutions Agency of B.C., a body created by the Private Career Training Institutions Act, S.B.C. 2003, c. 79. It is now regulated by the Private Training Act, S.B.C. 2015, c. 5, a statute that dissolved the Agency, prohibits the offering of a career-related program of instruction unless the institution holds the requisite certificate under theAct, and assigns matters of certification and compliance to a registrar appointed under that Act.

[14]        Both parties, as is apparent, have as their initials “VCC”.

[15]        Although the passing off claim encompassed allegations of improper use of both “VCC” and “Vancouver Community College”, it has resolved to a claim of passing off with respect only to “VCC”. The claim of breach of the official marks, on the other hand, encompasses not only complaint of the use of “VCC” but also the respondent’s behaviour in respect to bidding on both “VCC” and “Vancouver Community College” as keywords to direct searches towards its website.

[16]        The reasons for judgment touch only lightly on the educational programs offered by the appellant as a publicly regulated institution and the respondent as a private business. The judge referred to the appellant as a “career training college” with a high reputation and success “in placing students with employers for practical training”. He recited:

[64]      In January 2013, Catherine Clement became the plaintiff’s Executive Director of Marketing and Communications. She describes the plaintiff as a public institution controlled by the Ministry of Advanced Education with about 22,000 full and part-time students. It attempts to keep its tuition low to enable a wide variety of students to attend to “get a skill”. …

[17]        The programs offered by the appellant and the respondent are, at least in some measure, in the same fields of learning. Examples come from programs pursued by witnesses referred to in the judge’s reasons: paralegal training, culinary programs, medical laboratory work, licensed practical nurse training, and hospitality management.

[18]        The appellant’s complaints focus on the steps taken by the respondent in 2009 in respect to keywords used in Internet searches, and the establishment of its domain name and website. The judge discussed the issue in terms of Google searches because Google is the dominant search engine in use today. Recognizing that other search engines exist, he used the common expression “keyword”, not a word now used by Google, to describe the advertising aspect of the case. The judge largely adopted the parties’ description of the keyword advertising in issue, set out in the notice to admit, with minor modifications.

[19]        The mechanism of Internet advertising, keyword searching, the bidding process to tie a website to a keyword, and the manner in which searches are made efficacious from the advertiser’s point of view is technical and not easily summarized. What is important for this case is that a bid on a keyword will make it more likely that the bidder’s advertisement with its domain name, linking to its website, will appear on the first search page revealed to the searcher. A searcher may then “click” (with touch screens, “tap”) the address in order to travel to the bidder’s landing page which will contain more information and directions for navigating the website.

[20]        The technical “how” of this advertising design relevant to this case, in the admitted facts adopted by the judge, is appended to these reasons as Appendix A. The judge also adopted the description of the import of keywords to Internet searching written by Mr. Justice Gaul in Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., 2010 BCSC 765 (CanLII), a case in which the Agency unsuccessfully sought an injunction to restrain the respondent from using certain of the keywords at issue in this appeal, and he appended portions of Interflora Inc. & Anor v. Marks and Spencer PLC & Anor, [2013] EWHC 1291 [Ch] as a schedule to his reasons. I attach the excerpts from those cases as Appendices B and C, respectively.

[21]        It is agreed the respondent bid on many keywords including: generic terms such as “practical nursing”; various acronyms, including “VCC”; and competitor’s names including not only “Vancouver Community College” but also the names of other educational institutions. The object was to attract traffic to the respondent’s website VCCollege.ca. Attracting traffic is an objective generally well within the proper activity of a competitive market place. The question here is whether the respondent’s behaviour crossed from the permissible to the impermissible.

[22]        The judge did not direct himself to the evidence as to the relative efficacy of the respondent’s bids on keywords bearing similarities to the appellant’s name, as demonstrated by evidence of “click” frequency. It appears to be undisputed that “VCC” was the keyword that generated the most “clicks” to the respondent’s website, such that the respondent’s advertisements appeared almost always in searches for VCC (over 97% of the time), and the respondent’s text advertisements always displayed VCCollege.ca in the web address line of the advertisement. In the main, the address VCCollege.ca was displayed with bold capitalized letters, thus: VCCollege.ca, and www.VCCollege.ca.

[23]        To address the issue of goodwill the appellant adduced evidence of its history, evidence of surveys taken in 2005, 2006, and 2012 that included questions on name recognition, newspaper articles, evidence that a SkyTrain station bears the acronym “VCC”, and printed material produced by it over the years. It called evidence to the effect it established its website in 1998 using the letters “vcc.bc.ca”, subsequently changed to “vcc.ca” by November 2002. The appellant also relied on the examination for discovery of the respondent’s representative and viva voce evidence.

[24]        To address the issue of confusion, the appellant relied upon the search results recorded for the keywords, and led evidence from several students to the effect that they were confused, or misdirected to Vancouver Career College, when seeking Vancouver Community College on the Internet, consequent on the respondent’s use of “VCC” in its advertising and its appearance in advertisements when searching for their intended college. The appellant also adduced evidence of certain employees with student contact that students had reported instances of misdirection and confusion between the college of their choice – Vancouver Community College – and Vancouver Career College, because of the appearance of the latter’s name on an Internet search for the appellant. The judge identified that evidence as hearsay and accorded it no weight.

This Court’s Role

[25]        This appeal largely concerns the principles of law applied in the judge’s analysis of passing off and breach of official marks. On these issues the question for us is whether the judge was correct. The appellant also challenges certain conclusions of fact. As we are not a trial court, these challenges will only succeed if, as stated in Housen v. Nikolaisen2002 SCC 33 (CanLII) and re-stated in Benhaim v. St. Germain2016 SCC 48 (CanLII), there is an error of fact that is both obvious (palpable) and material in the sense that a correct appreciation of the factual matter may well have altered the result.

[26]        In this case I conclude the judge erred in law in respect to passing off and official marks. I conclude, as well, the judge erred in fact within the Housen v. Nikolaisen parameters when discussing passing off by failing to have regard to a substantial body of evidence as to the identification in the public mind of “VCC” with Vancouver Community College by holding in respect to the issue of goodwill that “VCC” was largely abandoned between 1990 and 2013, by misstating the year the appellant established its domain name, and by holding that the requisite connection of “VCC” to the appellant necessary to establish it had goodwill in the acronym was not established.

Discussion

I.   Passing off

[27]        The common law developed the tort of passing off. The Trade-marks Act also prohibits passing off. Section 7 of the Act provides:

No person shall

(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and goods, services or business of another;

[28]        It is settled law that s. 7(b) is a statutory enactment of the common law tort of passing off: MacDonald v. Vapor Canada Ltd.1976 CanLII 181 (SCC), [1977] 2 S.C.R. 134.

[29]        The leading authority in Canada on passing off is Ciba-Geigy Canada Ltd. v. Apotex Inc.1992 CanLII 33 (SCC), [1992] 3 S.C.R. 120. Justice Gonthier, for the Court, discussed passing off in the context of the similar visual presentation of different pharmaceutical products. He said:

33        The three necessary components of passing-off action are thus: the existence of goodwill, deception of the public due to a misrepresentation and actual or potential damage to the plaintiff.

[30]        In Greystone Capital Management Inc. v. Greystone Properties Ltd.1999 CanLII 5690 (BC SC), 87 C.P.R. (3d) 43 (B.C.S.C.) Madam Justice Stromberg-Stein accurately summarized the three components at para. 27:

  1.       The existence of reputation or goodwill at the relevant time. This includes consideration of whether the plaintiff was recognized by the trade name and whether the trade name was distinctive within the relevant field of activity.
  2.       A misrepresentation leading the relevant public to believe there is a business association or connection between the parties. This includes consideration of whether the defendants’ use of the trade name is likely to deceive the relevant public. Any misrepresentation need not be deliberate and proof of intent is not necessary. Evidence of likelihood of confusion, leading to the possibility of lost business opportunity is relevant. However, the establishment of actual confusion is not required.
  3.       Damage or potential damage flowing to the plaintiff as a result of any misrepresentation due to loss of control over its reputation is presumed.

[31]        The appellant contends that the judge erred in respect to each of these components. The nuances of the first two components is at the heart of the appeal in respect to passing off, as the error alleged in respect to damages is said to follow from errors in consideration of goodwill and deception of the public (confusion).

1. Goodwill

[32]        The first of the three components required for a claim of passing off is goodwill.

[33]        The issue of goodwill proceeded on the basis that in 2009, when the respondent assumed its Internet nomenclature, the appellant had goodwill in the words “Vancouver Community College”. What was in issue was whether the appellant had goodwill in the acronym “VCC”. The judge found the appellant did not have goodwill in “VCC”.

[34]        In reaching his conclusion on goodwill the judge reviewed briefly the history of the appellant and evidence of historical advertising in which “VCC” was displayed prominently. He found that the documents showed that the practice of using “VCC” had continued until 1990, after which “the use of the initials “VCC” was largely abandoned until 2013”. He found that in 2013 the initials were again prominently displayed on the literature, and then said:

[50]      The plaintiff’s annual budget for online advertising at the time Ms. Chandler was hired was only about $60,000. By contrast, the defendant’s budget at that time was about $2 million annually. This disparity helps to explain the plaintiff’s realistic view that it was not able to “force” its identity with the initials “VCC”. There is no basis on the evidence to find that by 2009 this view had changed.

[35]        The judge found that proof of goodwill required proof that the product had acquired a secondary meaning or distinctiveness. He referred to a passage from Ciba-Geigy, referring to a statement in Oxford Pendaflex Canada Ltd. v. Korr Marketing Ltd.1982 CanLII 45 (SCC), [1982] 1 S.C.R. 494, to the effect that a plaintiff in a passing off action must establish that its product has acquired a secondary meaning, and to Molson Canada v. Oland Breweries Ltd.2001 CanLII 28238 (ON SC), [2001] 11 C.P.R. (4th) 199 (Ont. S.C.J.), to the effect that the plaintiff must lead evidence of distinctiveness, a concept that requires the product to have acquired a secondary meaning. He held:

[52]      I accept, and the defendant acknowledges, that the plaintiff had established “goodwill” in the name Vancouver Community College in February 2009, but the evidence does not persuade me that its services had acquired distinctiveness, a “secondary meaning”, as defined by the authorities.

[180]   To impose liability on the defendant for the tort of passing off the plaintiff must satisfy me that:

  1. a)   it enjoys goodwill attached to the educational services it provides;
  2. b)   its services have acquired a distinctiveness in the marketplace;

[193]   I find that the plaintiff enjoys goodwill in the educational services it provides but they have not achieved a “secondary meaning” in the marketplace. …

[36]        The appellant advances three propositions in its submission the judge erred on the issue of goodwill. It contends the judge erred: in principle in requiring it to establish a secondary meaning in “VCC” as if the acronym was a generic term used by many firms; in principle in requiring it to acquire a level of distinctiveness approaching “universally known”; and in fact in finding it had “largely abandoned” the VCC mark between 1990 and 2013 and there “was no basis in evidence” to establish the requisite level of goodwill.

[37]        In the 1901 case IRC v. Miller & Co. Margarine Limited[1901] A.C. 217 (H.L.), Lord McNaughton provided this definition of goodwill at pp. 223-224:

… What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.

[38]        Justice Binnie described goodwill in Veuve Clicquot Ponsardin v. Boutique Cliquot Ltée2006 SCC 23(CanLII) at para. 50, as “[i]n ordinary commercial use, it connotes the positive association that attracts customers towards the owner’s wares or services rather than those of its competitor”.

[39]        Where the “get-up” (mark in issue) is a name of a firm, the plaintiff must establish that the name is recognized in the marketplace as distinctive of the plaintiff’s goods or services at the time the action arose: Edward Chapman Ladies’ Shop Limited v. Edward Chapman Limited2007 BCCA 370 (CanLII) at para. 41. Thus to found an action in passing off, the “get-up” must distinguish the services of the plaintiff from the services of others. In considering that possibility, there is no rule as to the proportion of the relevant market necessary to establish the requisite reputation. A useful explanation is provided in Gill, K., Fox on Canadian Law of Trade-marks and Unfair Competition (Toronto: Carswell, 2002, 4th edition) at 4.4(h)(ii) p. 4-72-3:

… First, the plaintiff need not evidence the fact that the trade indicia is distinctive to all, or even a majority, of the relevant market. In fact the question is not really what proportion of the relevant market must know that the indicia indicate a trade source, which suggest some minimal percentage threshold for the action to be successful, but rather how many people recognize it. It is generally significant and sufficient if even a small percentage of the relevant market recognizes the indicia such as a trademark. Whether the percentage is one or five really has little impact on whether the plaintiff has a protectable reputation, but is relevant to whether there is a likelihood of confusion.

[40]        On my review of the authorities, including Oxford Pendaflex Canada Ltd., a secondary meaning is an aid to considering the posited attachment of the product or “get-up” to the plaintiff in cases of inherently unspecific language or “get-up”, where the primary meaning by itself does not point to a party. That was not the case here. The question in this case was always, in respect to the acronym “VCC”, whether it carried sufficient distinctiveness in its primary sense to be recognized as designating the appellant and the educational services it provides. As in Office Cleaning Services Ltd. v. Westminster Window & General Cleaners, Ltd. (1946), 63 R.P.C. 39 (H.L.), it was not a condition to success in the action that “the [acronym] in dispute had acquired a secondary meaning”. To put it another way, the appellant simply was required to establish that a sufficient portion of the marketplace in 2009 knew that “VCC” indicates Vancouver Community College.

[41]        I conclude it was an error in law to require Vancouver Community College to establish a secondary meaning in “VCC”.

[42]        Likewise, I consider the judge erred in principle in his view of the degree of public association between the acronym and the appellant required to establish goodwill. The judge’s reasons are somewhat opaque, but it appears he considered something akin to “universally known”, or known by a preponderance of people. I say this because he put reliance upon a newsletter published by the appellant in 1989 that stated “…outside the College, what the letters “VCC” stand for is not universally known, especially to newcomers”, and followed his replication of that evidence with the conclusion that there was “no basis in evidence” to find that Vancouver Community College was able to “force” its identity with the initials “VCC”. This suggests the judge considered that a significant degree of plurality, approaching ubiquity, was required to establish goodwill. As Fox on Canadian Law of Trade-marks and Unfair Competition noted in the passage above, this is not correct.

[43]        Apart from these two errors, I consider the judge erred in fact on the issue of goodwill in ways that are obvious and material to the outcome. Six features of the case persuade me of this error. First, I consider the judge erred in making a positive finding that the appellant had “largely abandoned” “VCC” between 1990 and 2013. In so saying the judge gave emphasis to the newsletter mentioned above, in which the then President explained a change of logo from one bearing “VCC” to a rather generic symbol intended to connote mountains. This letter explaining the change of logo does not mean, however, that “VCC” was not in public use by the appellant; the trial record contains a myriad of examples of use by Vancouver Community College of “VCC” in the years 1990 to 2013. Not the least is the appellant’s selection of its first domain name. Contrary to the judge’s finding that the initials “VCC” became part of the appellant’s domain name when Ms. Chandler took over the task of “reclaiming the plaintiff’s brand”, a hiring he says was in 2013, “vcc” was in the domain name used in 1998: “vcc.bc.ca”, changed by November 2002 to “vcc.ca”.

[44]        Second, in my understanding of the law of passing off, there is nothing that requires the plaintiff to establish its continuous and unvarying use of the indicia. The question is whether the indicia is recognized by members of the relevant marketplace as designating the plaintiff. This enquiry into goodwill does not need to engage an enquiry into a plaintiff’s advertising campaign, or advertising budget, and it certainly is not an enquiry into the respondent’s campaign. Rather, it is an enquiry into perceptions in the relevant marketplace. While advertising may suggest a level of public awareness, an absence of advertising using the indicia does not establish a lack of goodwill. It is for that reason I consider that the judge considered the wrong question in saying “VCC” was largely abandoned, in an advertising sense, by the appellant. I will add, here, that it is perhaps this error, combined with overlooking the historical seating of public colleges in the legislatively designed system of post-secondary education, that caused the judge to overlook the other aspects of the evidence I discuss below. That evidence, in my view, powerfully supports a conclusion that goodwill is established.

[45]        Third, apart from the multitude of examples in the evidence of the appellant’s use of “VCC” from 1990 to 2013 in brochures, calendars and other documents used in attracting students and delivering education, the record contains numerous examples of others using “VCC”: newspaper reports; media reports; and the name given to the SkyTrain station near the appellant’s campus and displayed prominently for riders, “VCC/Grant Station”. All of these examples indicate a level of easy public association of the initials to the appellant.

[46]        Fourth, the appellant led evidence of surveys it had conducted in 2005, 2006 and 2012, that included questions of name awareness. The first two of these were conducted before the relevant date, 2009, and are evidence that a percentage of the survey group associated “VCC” to the appellant. The respondent is critical of the methods used in the surveys, the reliability of the results, and the assumption one can project awareness from the 2005 and 2006 surveys to 2009, when the respondent developed its Internet presence under VCCollege.ca. It is apparent that the 2005 and 2006 surveys were not conducted in expectation of litigation. While there is room to challenge the methods used in the surveys and their implications, the 2005 and 2006 surveys are, in the least, some evidence of goodwill requiring some acknowledgment by the judge, and to the extent they demonstrate a level of identification of “VCC” to the appellant in 2005 and 2006, on the premise that public awareness of name brands and local knowledge does not have tidal action, they are evidence of goodwill at the time material to this litigation, 2009.

[47]        Fifth, we must recognize that the appellant is a public college long established in British Columbia. Its public character establishes a level of public awareness of the role it plays in the community. It is a short step to identifying the acronym “VCC” with it, there being no evidence of other public institutions with those initials, and the practice having been established in the province of identifying seats of higher learning by initials: UBC; SFU; BCIT. The public nature is further acknowledged by SkyTrain’s use of “VCC” to name a station.

[48]        Sixth, the appellant asserted use of “VCC” publicly through recording “VCC” as an official mark in 1999.

[49]        I conclude the judge erred in fact in misstating the scope of the evidence, and in failing to relate a significant body of evidence to the issue of goodwill. This is a factual error that is capable of correction based on the record. I have no hesitation in finding that as of 2009, the appellant Vancouver Community College had goodwill in the acronym “VCC”, which was recognized in the relevant market-place as a public provider of post-secondary education.

2. Confusion

[50]        The second component of passing off is deception through misrepresentation to the relevant public, in the sense that confusion in the minds of the public is a likely consequence of the impugned actions: Ciba-Geigyat p. 133.

[51]        The judge found that the appellant had not established this component and based his conclusion on the time, or stage of transaction, that the potential for confusion was to be assessed. He observed the critical moment was when the first impression was formed, which, he said, was after the searcher clicks on a search result to arrive at the landing page. Referring to the reasons for Mr. Justice Frankel in Insurance Corporation of British Columbia v. Stainton Ventures Ltd.2014 BCCA 296 (CanLII), he held:

[183]   The authorities on passing off provide that it is the “first impression” of the searcher at which the potential for confusion arises which may lead to liability. In my opinion, the “first impression” cannot arise on a Google AdWords search at an earlier time than when the searcher reaches a website. When a searcher reaches the website of the defendant in the present proceeding it is clearly identified as the defendant’s website. As was said by Frankel J.A. in Insurance Corporation of British Columbia v. Stainton Ventures Ltd. the “relevant consumer” will “understand that it is necessary to view a website to determine whose site it is”. In my opinion that is the point during a search when the relevant first impression is made.

[Emphasis added.]

[52]        The judge also commented on the policy issue of constraining competition, invoking a standard of unreasonableness:

[181]   … In my view, this lawsuit, and the previous attempts to enlist this Court and PCTIA in the plaintiff’s struggle to constrain the defendant’s ability to compete with it has been motivated by a concern that its own inability to invest the necessary funds and expertise to create a sophisticated online advertising program leaves it at a competitive disadvantage in the marketplace in comparison with the defendant. Passing off … is not intended to be used by a plaintiff to handicap a defendant that has developed a more effective means of marketing its goods and services than has a plaintiff.

And:

[186]   … It would be imprudent for this Court to attempt to preclude or even limit that practice in this jurisdiction unless it can be shown to be an unreasonable constraint on competition. That has not been shown. To award damages to the plaintiff or to enjoin the defendant from certain conduct because the defendant bids on the plaintiff’s name for the purposes of keyword advertising would be to disadvantage the defendant in a way that other online advertisers are not. It is not the defendant, or another advertiser in its position, which controls the bidding process, apart from making a decision to bid. A bid on a keyword may send a searcher to the bidder’s landing page, but the process of the search is controlled by the searcher and the search engine, not by the advertiser. Google and other providers of search engines generate revenue by offering an efficient bidding process.

[53]        The judge then observed that a prospective student would have had the opportunity to avoid the effects of any confusion because that student wishing to enroll must attend an interview, tour the campus and complete forms for enrollment that have the respondent’s name printed on them.

[54]        I will observe that whether the moment at which the confusion component is to be assessed is when the search results appear, as the appellant contends, or when the searcher arrives at the landing page, as found by the judge and contended by the respondent, any evidence of a student’s opportunity to be set straight in respect to the college he or she is seeking to enrol in, is not relevant because those opportunities occur after the later of these two events. Nor, in my respectful view, do the judge’s broad statements on constraints on competition assist in resolving the claim. Both the tort of passing off and the provisions of the Trade-marks Act are directed to behaviour that is intended by the actor to achieve a competitive edge. The issue is whether the bounds of appropriate commercial behaviour have been overstepped to the detriment of a party who has an interest the law protects. While robust competition is encouraged, this does not mean anything goes.

[55]        The issue before us in relation to the component of confusion is whether the judge erred in principle as to the moment for assessing confusion. In my view, while the judge correctly referred to the first impression test, he erred in delaying its application to the searcher’s arrival at the landing page, a moment well past the moment of first impression; the conclusion that the first impression does not occur until the searcher has reached a website by clicking on a search result, cannot be sustained on the authorities before us.

[56]        The judge started his discussion of the deceit or misrepresentation required for passing off with reference to Ciba-Geigy and s. 6 of the Trade-marks ActSection 6 provides:

6 (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.

(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the goods or services associated with those trade-marks aremanufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.

(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including

(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;

(b) the length of time the trade-marks or trade-names have been in use;

(c) the nature of the goods, services or business;

(d) the nature of the trade; and

(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

[Emphasis added.]

[57]        Referring to the jurisprudence the judge recognized, correctly, that whether there is likely to be confusion must be answered in the context of the circumstances of the case. He referred to these observations by Justice Binnie in Mattel Inc. v. 3894207 Canada Inc.2006 SCC 22 (CanLII):

56        What, then, is the perspective from which the likelihood of a “mistaken inference” is to be measured? It is not that of the careful and diligent purchaser. Nor, on the other hand, is it the “moron in a hurry” so beloved by elements of the passing-off bar: Morning Star Co-Operative Society Ltd. v. Express Newspapers Ltd., [1979] F.S.R. 113 (Ch. D.), at p. 117. It is rather a mythical consumer who stands somewhere in between, dubbed in a 1927 Ontario decision of Meredith C.J. as the “ordinary hurried purchasers”Klotz v. Corson (1927), 33 O.W.N. 12 (Sup. Ct.), at p. 13. See also Barsalou v. Darling (1882), 1882 CanLII 40 (SCC), 9 S.C.R. 677, at p. 693. …

[58]        The judge referred as well to the judgment of Justice Rothstein in Masterpiece Inc. v. Alavida Lifestyles Inc.2011 SCC 27 (CanLII), including:

[70]      The focus of this question is the attitude of a consumer in the marketplace. Properly framed, consideration of the nature of the wares, services or business should take into account that there may be a lesser likelihood of trade-mark confusion where consumers are in the market for expensive or important wares or services. The reduced likelihood of confusion is still premised on the first impression of consumers when they encounter the marks in question. Where they are shopping for expensive wares or services, a consumer, while still having an imperfect recollection of a prior trade-mark, is likely to be somewhat more alert and aware of the trade-mark associated with the wares or services they are examining and its similarity or difference with that of the prior trade-mark. A trade-mark, as Binnie J. observed in Mattel, is a shortcut for consumers. That observation applies whether they are shopping for more or less expensive wares or services.

[Emphasis in original.]

[59]        That passage, as the judge noted, was not written in the context of passing off, but it is an apt description of the mind a court should ascribe to the hypothetical relevant consumer.

[60]        To this discussion I would add reference to Veuve Clicquot at para. 20:

20        The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot on the respondents’ storefront or invoice, at a time when he or she has no more than an imperfect recollection of the VEUVE CLICQUOT trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks. As stated by Pigeon J. in Benson & Hedges (Canada) Ltd. v. St. Regis Tobacco Corp.1968 CanLII 1 (SCC), [1969] S.C.R. 192, at p. 202:

It is no doubt true that if one examines both marks carefully, he will readily distinguish them. However, this is not the basis on which one should decide whether there is any likelihood of confusion.

. . . the marks will not normally be seen side by side and [the Court must] guard against the danger that a person seeing the new mark may think that it is the same as one he has seen before, or even that it is a new or associated mark of the proprietor of the former mark.

(Citing in part Halsbury’s Laws of England, 3rd ed., vol. 38, para. 989, at p. 590.)

[Emphasis added.]

[61]        The judge relied heavily upon ICBC in reaching his conclusion on confusion. However, in my respectful view, ICBC is not determinative of the issue as was said by the judge. ICBC concerned the domain name “ICBCadvice”. In itself that name distinguishes between the defendant and ICBC. The trial judge, Mr. Justice Grauer, explained in his reasons for judgment indexed at 2012 BCSC 608 (CanLII):

[45]      In this way, this case is also distinguishable from Masterpiece Inc. v. Alavida Lifestyles Inc.2011 SCC 27(CanLII), [2011] 2 S.C.R. 387, where the Supreme Court of Canada considered trade-mark priorities between two corporations involved in the retirement residence industry. One used the mark “Masterpiece Living”, while the other used the mark “Masterpiece the Art of Living”. The context of the industry in which both parties were active is important. It would be akin to the defendant in this case using the name “ICBCinsurance.com” as opposed to ICBCadvice.com.

[48]      In the context of British Columbia’s universal automobile insurance scheme, I am satisfied that the average customer of normal intelligence would not be led astray, and would have no difficulty recognizing that ICBCadvice.com would probably relate to how to deal with ICBC in an arm’s length or even adversarial sense, rather than in a manner endorsed by ICBC.

[Emphasis added.]

[62]        On appeal, Mr. Justice Frankel for the court agreed:

[37]      I am unable to accept this argument as it fails to give the “relevant consumer”, i.e., an Internet user, credit for even the most basic understanding of the function of a domain name. Even though there is some resemblance between ICBCadvice.com and ICBC’s family of marks, the average Internet user with an imperfect recollection of ICBC’s marks would not likely be mistaken by the domain name. They understand, for example, that a domain name which, in part, contains the name of a business or its acronym will not necessarily be affiliated with or endorsed by that business and may, instead, be the subject matter of the website or entirely unrelated to that business.

[Emphasis added.]

[63]        ICBC, in both courts, is consistent with BCAA v. Office and Professional Employees’ International Union2001 BCSC 156 (CanLII), a case concerning the domain name “bcaaonstrIke.com”, held not to confuse with any website of BCAA.

[64]        The point of both ICBC and BCAA is that the impugned domain names contained information disclaiming attachment to the plaintiff and were found by the court not to be confusing for that reason.

[65]        In contrast Law Society of British Columbia v. Canada Domain Name Exchange Corporation2005 BCCA 535 (CanLII) addressed a contest between the domain names of the Law Society of British Columbia “lawsociety.bc.ca” and “lsbc.org”, and the names “lawsocietyofbc.ca” and “lsbc.ca”. The Law Society learned that “lawsocietyofbc.ca” was linking to a website containing adult content, and possibly to a minor political party. It successfully applied for relief (2004 BCSC 1102 (CanLII)), a judgment upheld on appeal for substantially the reasons of the trial judge, Mr. Justice Sigurdson. He said:

[29]      Evidence of actual confusion could bolster the fact that there is a misrepresentation but it is not needed here where the misrepresentation is so obvious and that it exists is just a matter of common sense. The use of a domain name that is so similar to the name that the plaintiff is known by and has substantial goodwill in (without additional words) would lead a person surfing the web and going to <lawsocietyofbc.ca> to believe, I conclude, that they were going to the plaintiff’s web site or one that was affiliated with the plaintiff.

[30]      As I noted in BCAAsupra, at para. 73:

If someone uses a person’s trade-mark as the domain name, such as Marks & Spencers.com or McDonalds.com, without any other words or letters, that is likely to confuse members of the public who type in the domain name looking for the website of Marks & Spencers or McDonalds and then come to something else. They will think the website has some connection with the site they were seeking.

[31]      Here the use of such a similar name and a name by which the plaintiff is specifically and commonly known would misrepresent that the domain name was associated with the plaintiff.

[Emphasis added.]

[66]        I consider Law Society of British Columbia precludes the idea one has to arrive at the landing page to assess confusion: the court did not require the searcher to arrive at the adult site as a condition of establishing the confusion necessary for passing off.

[67]        What then of the statement in ICBC relied on by the judge that the relevant consumer would “understand that it is necessary to review a website to determine whose site it is”, that is, the moment for assessing confusion is when the searcher arrives at the landing page? I read that statement as obiter dicta because the case is fully decided on the conclusion the impugned domain name disclaims association with the plaintiff. Further, the statement was made without reference to Law Society of British Columbia, which precludes that view, and does not place the issue in the circumstances of the wide range of websites a searcher can be taken to with a simple “click”. As Mr. Justice Sigurdson observed in Law Society of British Columbia:

[41]      Apart from that plan which the evidence shows was in operation, it appears to me self-evident that use of “lawsocietyofbc” as the domain name effectively or potentially causes the plaintiff to lose control over its goodwill. This is particularly so when a professional body with the stature of the plaintiff, the governing body for lawyers, is suggested to be connected to an adult site or a site of a political party.

[68]        In Masterpiece Inc. Justice Rothstein observed:

[71]      It is not relevant that, as the trial judge found, consumers are “unlikely to make choices based on first impressions” or that they “will generally take considerable time to inform themselves about the source of expensive goods and services” (para. 43). Both of these — subsequent research or consequent purchase — occur after the consumer encounters a mark in the marketplace.

[73]      Indeed, before source confusion is remedied, it may lead a consumer to seek out, consider or purchase the wares or services from a source they previously had no awareness of or interest in. Such diversion diminishes the value of the goodwill associated with the trade-mark and business the consumer initially thought he or she was encountering in seeing the trade-mark. Leading consumers astray in this way is one of the evils that trade-mark law seeks to remedy. Consumers of expensive wares or services and owners of the associated trade-marks are entitled to trade-mark guidance and protection as much as those acquiring and selling inexpensive wares or services.

[74]      For these reasons, it was an error to discount the likelihood of confusion by considering what actions the consumer might take after encountering a mark in the marketplace. The trial judge should have instead limited his consideration to how a consumer, upon encountering the Alavida mark in the marketplace, with an imperfect recollection of the Masterpiece Inc. mark, would have reacted. … in circumstances where a strong resemblance suggests a likelihood of confusion, and the other s. 6(5) factors do not point strongly against a likelihood of confusion, then the cost is unlikely to lead to a different conclusion.

[Emphasis added.]

[69]        The judge discussed Red Label Vacations Inc. v. 411 Travel Buys Limited, 2015 FC 18, aff’d 2015 FCA 290 (CanLII), finding it supported his conclusion. Red Label concerned meta tags, those being text that is not displayed to the consumer. In her concurring judgment Madam Justice Dawson explained that the case was one of use of a trademark in a meta tag, and not one of “initial interest confusion”. I do not consider it helpful in the circumstances before us. Further, the majority reasons do not refer to Masterpiece, and to the extent they are not consistent with the views expressed in Masterpiece on the temporal issue, I am bound by Masterpiece.

[70]        As I consider the judge erred in assessing confusion at the time of arrival at the website, the question is whether this case, viewed at the time the search results appear, is akin to ICBC and BCAA or akin to the Law Society of British Columbia. It is apparent that there is nothing about the domain name “VCCollege.ca” that distinguishes the owner of that name from Vancouver Community College. The letters “ollege” added to the acronym “VCC” are as equally reminiscent of the appellant as the respondent, and there are no words or letters that disclaim affiliation with the appellant.

[71]        I conclude the second component of passing off, confusion, is fully established by proof that the respondent’s domain name is equally descriptive of the appellant and contains the acronym long associated to it. 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. Adopting the language of Masterpiece at para. 24, the judge “should have limited his consideration to how a consumer, upon encountering the [“VCC”] would have reacted”, and on that question, the necessary likelihood of confusion is established.

[72]        The appellant asks us to go farther and find that the respondent’s practice of bidding on keywords, including “VCC” and “Vancouver Community College” is sufficient to satisfy the second component of passing off. It invokes Orkin Exterminating Co. Inc. v. Pestco Co. of Canada Ltd.1985 CanLII 157 (ON CA), 5 C.P.R. (3d) 433 (Ont. C.A.) in support of that proposition. Orkin, however, is unlike this case in that it was a case of a clear misrepresentation, wherein Pestco put its telephone number in an advertisement containing Orkin’s name. More significantly, 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. What is key is how the defendant has presented itself, and in this the fact of bidding on a keyword is not sufficient to amount to a component of passing off, in my view.

3. Damage

[73]        Damage is the third component of passing off. The judge held damage was not established. He said:

[193]   … Those findings are sufficient to dispose of the action, but I will add that, in my opinion, it is unlikely that the plaintiff has suffered damage from the conduct of the defendant of which it complains.

[74]        Passing off requires only that some damage is established, in which case injunctive relief may be ordered and the trial court will be put to the task of assessing damages.

[75]        In the trial decision of Edward Chapman Ladies’ Shop Limited2006 BCSC 14 (CanLII), Mr. Justice Shaw admirably described the jurisprudence on damage, including:

[53]      The defendant argues that no financial loss has been proven by the plaintiff. In terms of demonstrable loss of business to date, I agree with the defendant. As I read the case law, however, proof of actual financial loss is not required; rather, damage may be inferred from the unauthorized use of another’s goodwillDamage may also be inferred from the loss of control over one’s goodwill.

[54]      In Sir Robert McAlpine Ltd. v. Alfred McAlpine Plc., 2004 EWHC 630 at para. 20 (Ch.), Mann J. said:

When it comes to considering damage, the law is not so naïve as to confine the damage to directly provable losses of sales, or “direct sale for sale substitution”. The law recognises that damage from wrongful association can be wider than that.

[55]      In Irvine v. Talksport Ltd.[2002] 1 W.L.R. 2355, at 2366 (Ch.), Laddie J. said:

But goodwill will be protected even if there is no immediate damage….[A]lthough the defendant may not damage the goodwill as such, what he does is damage the value of the goodwill to the claimant because, instead of benefiting from exclusive rights to his property, the latter now finds that someone else is squatting on it.

[56]      In Visa International Service Association v. Visa Motel Corporation (1984), 1984 CanLII 517 (BC CA), 1 C.P.R. (3d) 109 at 119 (B.C.S.C.), Proudfoot J. (as she then was) said:

[T]he lack of power to control the use of the marks to which goodwill attached by unauthorized users was recognized as an apprehended form of damage to goodwill.

[Emphasis added.]

[76]        In this case the interference with the appellant’s goodwill is sufficient to establish damage.

4. Conclusion on Passing Off

[77]        As I consider a proper application of the law and full consideration of the circumstances establish all three required components, I conclude the appeal must be allowed on the passing off claim, and judgment entered in favour of the appellant. I will deal with the details of the appropriate order at the conclusion of these reasons.

II.   Use of the Official Marks

[78]        The appellant recorded “VCC” and “Vancouver Community College” as official marks in 1999 and 2005 respectively. Independent of its claim of passing off, it says the respondent is in breach of ss. 9 and 11 of the Actby its business practices. The judge did not agree, and dismissed the claim of violation of the official marks on the basis the respondent had used “VCC” before registration of the official marks and so, as a prior user, was protected in its use of the mark:

[29]      The evidence satisfies me that the defendant used the initials “VCC” to identify itself before the plaintiff had registered them as its official mark. The provisions of sections 9 and 11 of the Trade-marks Act do not operate retrospectively so as to prohibit a person from continuing to use a mark which is subsequently declared to be an official mark under the Trade-marks Act.

[79]        In having settled on the prior use issue, the judge did not discuss the several issues that require resolution before one can say with confidence that the impugned behaviour violates the protections afforded official marks by the Trade-marks Act, and did not make certain factual findings that such an enquiry entails. Further, the reasons are silent on the scale of and nature of prior use that the judge found had occurred, did not relate that use to what I have found was tortious behaviour in passing off in relation to “VCC”, did not consider whether any prior use (assuming it is not held as disqualifying because it was tortious) had so expanded after the recording of the official marks as to avoid the defence of prior use, and did not consider whether prior use had already been abandoned at the time the official marks were recorded.

[80]        In my view, this court is not in a position to perform an appellate review of the order dismissing the claim of breach of official marks; for us to do so would require us to act as a trial court, and to make conclusions of some significance to the development of the law in relation to the Internet on an incomplete record. I consider the order dismissing the claim of breach of official marks must be set aside and the claim remitted to the trial court for determination, as I shall now expand upon.

[81]        The official marks provisions of the Trade-marks Act provide broad and enduring protection to the marks recorded. In ICBC Mr. Justice Frankel described the system of official marks:

[21]      To my knowledge, Canada is the only jurisdiction in the world with legislation that grants such a broad power to “public authorities” and others to create official marks. While bearing some similarity to trade-marks, official marks are not governed by the same rules as trade-marks. Indeed, they are not “registered” as are trade-marks. However, they are recorded by the Registrar of Trade-marks and are included in the Trademarks Database found on the website of the Canadian Intellectual Property Office, an agency of Industry Canada.

[22]      In her text, Canadian Trademark Law (Markham:  LexisNexis Canada, 2010), Professor Teresa Scassa says the following about the nature of official marks and the process by which they are created:

At 81:

Any entity which qualifies as a “public authority” may request that the Registrar give public notice of the adoption and use of any badge, crest, emblem or mark adopted by that public authority. Public notice is not the same as registration; there is no examination process, and indeed, there is no requirement that official marks conform to any particular standards. There is thus no requirement of distinctiveness, nor is there any requirement that the official mark not be confusing with registered trademarks or marks already used or made known in Canada. They do not need to be renewed, and can only be challenged through an application for judicial review of the decision of the Registrar of Trademarks to give public notice of the mark as an official mark. [Footnotes omitted.]

At 159:

There is no public notice or opposition period for official marks. There is also no examination requirement for the mark — it may be identical to or confusing with existing registered trademarks. It is not necessary for wares or services to be identified with respect to official marks, although some public notices do provide this information. Even if wares or services are specified, these do not limit the scope of the mark. An official mark can be descriptive and is not required to be distinctive. It may also be confusingly similar to an already existing mark. Once public notice is given, no one may adopt the mark, or a mark “so nearly resembling as to be likely to be mistaken for” the official mark. Official marks do not expire. They are not registered trademarks, and are not subject to the same proceedings for examination, opposition, challenge or expungement. As noted by one court, “[o]nce public notice has been given with respect to the adoption and use of an official mark, the mark is ‘hardy and virtually unexpungeable’”. Any challenge to the validity of the mark must be made through the vehicle of an application for judicial review of the Registrar’s decision to give public notice of the adoption and use of the mark. [Footnotes omitted.]

[82]        The Trade-marks Act legislates in respect to both trade-marks and the marks available to public institutions known as official marks. “Trade-mark” is defined by the Act but official mark is not. Further, the Actaddresses the terms “adopted” and “used” in reference to trade-marks, but not official marks.

[83]        The force of an official mark is established by ss. 9 and 11 of the Act. Section 9 identifies a list of marks protected from outside exploitation including emblems, coats of arms and other symbols associated with the Royal Family, Canada, provinces, international organizations, and other countries. The list includes marks that are recorded by public authorities, in these terms:

9 (1) No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for,

(n) any badge, crest, emblem or mark

(i) adopted or used by any of Her Majesty’s Forces as defined in the National Defence Act (leng/acts/N-5),

(ii) adopted and used by any public authority, in Canada as an official mark for goods or services,

(iii) adopted and used by any public authority, in Canada as an official mark for goods or services,

in respect of which the Registrar has, at the request of Her majesty or of the university or public authority, as the case may be, given public notice of its adoption and use;

[84]        Section 11 prohibits use of marks adopted under s. 9 in these terms:

11 No person shall use in connection with a business, as a trade-mark or otherwise, any mark adopted contrary to section 9 or 10 of this Act …

[Emphasis added.]

[85]        The two official marks “VCC” and “Vancouver Community College” are registered under s. 9(1)(n)(iii).

[86]        A claim of breach of the official mark provisions in respect to the two official marks in issue requires consideration of, first, the provisions to determine whether the impugned behaviour fits within the prohibited activity described in ss. 9 and 11, and, second, the application of any positive defence asserted.

[87]        Here the alleged breach of s. 11 was said to have occurred in respect to both marks, “VCC” and “Vancouver Community College”. The allegation in respect to “VCC” addressed both the use of that acronym by the respondent in its Internet presence and bidding on “VCC” as a keyword. The allegation in respect to “Vancouver Community College” addressed only the bidding on it as a keyword.

[88]        In order for s. 11 to prohibit the impugned activity, the mark must have been adopted by the defendant for purposes of s. 9. I question whether the answer to that question is the same for both “VCC” and “Vancouver Community College”, it being clear the latter does not appear in the respondent’s domain name and was not used by the respondent as a description of itself. The issue of adoption must be addressed before any liability can attach to the respondent but I consider we do not have the findings of fact that would underpin that determination.

[89]        Second, the respondent must have used the official mark in connection with its business, as a trademark or otherwise. Again, it may be that the answers concerning the use of “VCC” and “Vancouver Community College” differ in respect to use as a “trademark” and use “otherwise”. Again, in my view, we are without the factual tools to decide these questions.

[90]        After determining the application of s. 11, comes the issue of prior use. Here the nature of that use, the timing of that use, the scale of that use and whether there has been expansion, and the degree to which the respondent had abandoned that use when the marks were recorded may bear upon the application of the defence. These are aspects not addressed in the reasons for judgment and they are not without controversy. Further, the judge’s decision was made in the context of his order dismissing the claim in passing off, which I consider was in error. In my view, the disposition of the claim for breach of official marks is fatally impaired.

[91]        Where it is possible this court provides an answer for the parties. In this case, however, I do not consider that the claim of breach of official marks is one we can resolve as there are too many factual determinations and outstanding issues for us to do so, given our function as a court of appellate review. Accordingly, and recognizing that this result will put the parties to yet further litigation, I conclude the appeal from the order dismissing the claim of breach of official marks must be allowed and that the claim must be remitted to the trial court for fresh determination.

Conclusion

[92]        In my view, the order appealed must be set aside in its entirety. For the reasons given, I consider the cause of action in passing off is established and the appellant is entitled to a permanent injunction, in terms that may be the subject of further submissions if required, restraining the respondent from use of “VCC” and “VCCollege” in respect to its Internet presence. It will be necessary to remit the issue of quantum of damages for passing off to the Supreme Court of British Columbia for assessment. Further, I would remit the claim of breach of official marks to the Supreme Court of British Columbia for fresh determination. In my view, costs in the trial court should be determined by the trial court.

“The Honourable Madam Justice Saunders”

I AGREE:

“The Honourable Madam Justice D. Smith”

I AGREE:

“The Honourable Mr. Justice Savage”

 

Appendix A

(Admitted Facts adopted by the judge at para. 33)

  1.    Google AdWords is an online advertising program provided by Google.
  2.    Keywords are words or phrases chosen by the AdWords advertiser that can trigger an advertisement to appear.
  3.    When someone searches Google using an advertiser’s keyword, its advertisement may appear next to the Google search results. Keywords can also trigger advertisements to show on other sites across the internet which are affiliated with Google AdWords.
  4.    If multiple advertisers use the same keyword to trigger their advertisements to appear, Google uses Ad Rank to determine whose advertisements will appear, and in what order.
  5.    An advertisement’s Ad Rank is a score based on:

(a)     The advertiser’s bid (how much the advertiser is willing to pay for the advertisement);

(b)     The advertisement’s Quality Score, which is based on the expected clickthrough rate of the advertisement, the relevance of the advertisement to the search terms, and the quality of the website the advertisement links to; and

(c)     The impact of the advertisement’s format.

  1.    Advertisements cycle through the search results pages based on their Ad Rank. The advertisement with the highest Ad Rank appears in the first eligible position on the search results page, the advertisement with the second-highest Ad Rank appears beneath it, and so on down the page.
  2.    An advertiser can use “keyword insertion” to update the text of an advertisement to include one of the advertiser’s keywords that matches a customer’s search terms. When a customer uses one of the advertiser’s keywords in their search, AdWords automatically replaces the selected portion of the advertisement with the keyword that triggered the advertisement to appear. This feature allows one advertisement to appear differently to customers depending on their search terms.
  3.    The “display URL” is the webpage address that appears with an advertisement, typically shown in green text. The display URL is what appears to users who see the advertisement.
  4. The “destination URL” is the URL address for the page in the advertiser’s website where people are sent after they click the advertisement. The destination URL generally isn’t visible in the advertisement.
  5. An “ad group” is a set of keywords, ads, and bids which are managed together, in order to show ads to people likely to be interested in them. Separate ad groups can be used for different types of products or services.
  6. A “campaign” is a set of ad groups that share a budget, location targeting, and other settings. Campaigns can be used to organize categories of products or services.

Where AdWords Advertisements Can Appear

  1. The “Google Network” is all of the places where AdWords advertisements can appear, including Google sites, websites that partner with Google, and other placements like mobile phone apps.
  2. The Google Network is divided into the “Search Network” and the “Display Network.”
  3. The Search Network is a group of search-related websites where AdWords advertisements can appear, including Google search sites and non-Google search sites (like AOL) that partner with Google to show search ads, called search partners.
  4. An AdWords advertisement can show on the Search Network when someone searches with terms related to one of the advertiser’s keywords.
  5. The Display Network is a group of more than a million websites, videos, and apps where AdWords advertisements can appear.
  6. AdWords advertisements can be automatically matched to websites and other placements like mobile phone apps when the advertiser’s keywords are related to the sites’ content. An advertiser can also choose to target specific sites, pages about specific topics, or specific demographic groups.
  7. “Display partners” are websites in the Display Network that partner with Google to show advertisements.
  8. “Placements” are locations on the Display Network where advertisements can appear. AdWords advertisers can choose specific websites on which they want their advertisements to appear by adding “managed placements.” Advertisers can also let Google choose relevant “automatic placements” based on keywords or other targeting methods.
  9. AdWords advertisements in the Display Network may be displayed on Gmail.

Targeting AdWords Advertisements

  1. There are a variety of methods an advertiser can use to target AdWords advertisements on the Search Network and the Display Network.
  2. An advertiser can use location targeting to show advertisements to customers in a selected geographic region. For each ad campaign, an advertiser can select locations where advertisements can be shown. The location may be an entire country, areas within a country like cities or territories, or a radius around a location.
  3. An advertiser can choose targeting settings on the Display Network for each individual ad group. The advertiser can add a single targeting method, such as keywords, or more than one targeting method, such as keywords and placements.

Measuring the Effectiveness of a Google AdWords Advertisement

  1. Analytics is a Google product that provides in-depth reporting on how people use websites. Analytics can be used to determine what people do on an advertiser’s website after clicking on their advertisement.
  2. AdWords advertisers can access their AdWords account history online. This history contains a variety of data, including changes to advertisements, campaign budgets, bids, network settings, keywords, and campaign targeting.
  3. A search terms report is a list of search terms that people have used before seeing an AdWords advertisement and clicking it. This report shows every search query that resulted in an advertisement being shown and clicked. It can be accessed online by an AdWords advertiser.
  4. “Impressions” are a measurement of how often an advertisement is shown. An impression is counted every time an advertisement is shown on a search result page or other site on the Google network.
  5. An advertisement’s “impression share” is the number of impressions the advertisement has received divided by the number of impressions it was eligible to receive. Impression share is a way of measuring the share of online advertising space an advertiser has obtained,
  6. When someone clicks on an advertisement, such as the blue headline of a text advertisement, AdWords counts that as a “click”.
  7. An advertisement’s “clickthrough rate” or “CTR” is a ratio showing how often people who see the advertisement end up clicking it. The CTR is calculated by dividing the number of clicks the advertisement receives by the number of impressions for the advertisement.

  1. A “conversion” occurs when someone clicks on advertisement andafter arriving at the landing webpagethen takes an action that the advertiser has defined as valuable to its business, such as making a purchase, filling out a form or signing a contract. An AdWords advertiser can choose what is considered to be a conversion based on what that advertiser recognizes as valuable.

 

Appendix B

(From Private Career Training Institutions Agency v.
Vancouver Career College (Burnaby) Inc
., 2010 BCSC 765 (CanLII))

[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 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.

[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 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.

 

Appendix C

(From Interflora Inc. & Anor v. Marks and Spencer PLC & Anor,
[2013] EWHC 1291 [Ch])

  1.    The principal way in which Google provides advertising is by means of a service Google calls AdWords. It is important to note that Google constantly refines the way in which its search engine operates and that Google regularly changes the way in which AdWords operates. There have been a considerable number of such changes in the period from April 2008 to now which are potentially relevant to the issues in the present. I cannot hope to describe all these changes. Accordingly I shall first attempt to describe the common features of AdWords over this period, and then to indicate some of the principal changes that have occurred during this time.
  2.   Common features. When a user of the Google search engine carries out a search, the SERP presented to the user usually contains three main elements. The first is the search box, which displays the search term typed in by the user. This may consist of one or more than one word. The second element comprises the “natural’” or “organic” results of the search, consisting of links to websites assessed to be relevant to the search term by the search engine’s algorithm, accompanied in each case by some text derived from the website in which the search term appears, sorted in order of relevance. Typically, there is a large number of natural results, the listing of which continues on succeeding pages. Although there are various ways in which website operators can and do seek to influence their position in the “natural” search results, a process known as “search engine optimisation” or SEO, in principle the ranking is an objective one based solely on relevance. The third element comprises advertisements containing links to websites which are displayed because the operators of those websites have paid for them to appear in response to the search term in question. The advertisements are generally displayed in one or more of three sections of the SERP, namely (i) in a shaded box at the top of the SERP (often referred to as the “golden box”) which contains up to three advertisements, (ii) in a panel on the right-hand side of the SERP and (iii) a panel at the bottom of the SERP after the first ten natural results.
  3.    The display of such advertisements is triggered when the user enters one or more particular words into the search engine. These words, which are referred to as keywords, are selected by the advertiser in return for the payment of a fee calculated in the manner described below. This is often referred to as “bidding on” or “purchasing” the keywords.
  4.    The advertisements consist of three main elements. The first is an underlined heading (consisting of a maximum of 25 characters) which functions as a hyperlink to a landing page specified by the advertiser. That is to say, when the user clicks on the link, the user’s browser is directed to that page on the advertiser’s website. The hyperlink may consist of or include the keyword or it may not. The second element consists of two lines of promotional text (with a maximum of 35 characters for each line), which may or may not include the keyword. The third element consists of the URL of the advertiser’s website (maximum of 35 characters). It should be noted that the URL does not function as a hyperlink (although the user could type it or cut-and-paste it into his or her browser and access the website in that way).
  5.    The way in which the advertiser pays for this form of advertising is that the advertiser pays a certain amount each time a user clicks on the hyperlink in its advertisement and thus is directed to the advertiser’s website (known as “click through”). Accordingly, the advertiser does not pay for the display of advertisements to users who do not click through. The amount the advertiser pays is calculated as the “cost per click” or CPC for each keyword purchased subject to a maximum daily limit specified by the advertiser. If the daily limit is exceeded, the advertisement will not be displayed.
  6.    More than one person can purchase each keyword. Where more than one person purchases a particular keyword, there is an automated auction process whereby, subject to the influence of the Quality Score discussed below, the advertiser who bids the highest maximum CPC has its advertisement displayed in the highest position and so on. This means that popular keywords are more expensive than unpopular ones.
  7.    In addition to the CPC, the positioning of advertisements is influenced by the Quality Score or QS which Google ascribes to the advertisement. Google does not publish all the factors it takes into account in determining the QS, and I believe that this has changed over time, but they include the relevance of the promotional text, the “click through rate” or CTR and the relevance of the landing page. An advertiser whose advertisement has a high QS, but low maximum CPC, can appear higher in the ranking than one whose advertisement has a lower QS but higher maximum CPC.
  8.    Google offers advertisers the facility to match a keyword to the user’s search query so as to trigger an advertisement in various different ways. An “exact match” is where the search term entered by the user must be the same as the keyword selected by the advertiser in order for the advertisement to appear, with no additional words, A “phrase match” requires the search term to contain the same words as the keyword in the same order, but it may include additional words before or after the phrase. A “broad match” enables the search term to be matched to variants of the keyword such as plurals. By May 2008 Google’s broad match included a facility referred to by practitioners (but not Google) as “advanced broad match”, namely for a search term to be matched to a different keyword which was nevertheless relevant. For example, this enabled M & S to display advertisements associated with the keyword “florists” when the search term “flowers” was entered. “Negative match” enables advertisers to prevent advertisements from appearing when the search query includes a particular word or phrase. Negative matching is a straightforward and routine process.
  9.    Google enables advertisers to organise their keyword advertising in various ways. An advertiser may have one or more accounts, which may be categorised by reference to product or service. Within each account, advertisers can have various “campaigns”. Each campaign is subject to settings determined by the advertiser that dictate the manner in which advertisements are displayed e.g. in which geographical area, on what devices, at what times of day and in what sequence. Within each campaign, there can be various “groups”. Each group contains a list of keywords and the promotional text, URL and match type associated with it. The process of creating a keyword advertising campaign as at April 2009 is illustrated in Annex 1 to my first judgment.
  10.    Google enables advertisers to assess and manage their keyword advertising campaigns by means of Search Query Reports or SQRs. Depending on how they are set up and used, SQRs can produce information on a variety of performance measures for keywords, as follows:
  11. i)         Impressions – how many times the advertiser’s advertisements appeared following a search which has been conducted against a search term which, in some way, matches the keyword bid on.
  12. ii)         Clicks – how many times the advertiser’s advertisements were clicked on by users who had searched for a particular search term and had been presented with an advertisement.

iii)         CTR – the proportion of clicks to impressions.

  1. iv)        CPC – on average, how much the advertiser had to pay to Google per click on the advertisement.
  2. v)         Cost – how much in total the advertiser spent on bidding for that search term.
  3. vi)        Conversions – how many tracked events were recorded from the keyword if Google AdWords tracking is implemented on the site.

vii)      Revenue – how much revenue has been generated from the keyword if this facility was implemented as part of setting up Google AdWords tracking on the site.

viii)      Conversion Rate – the rate at which conversions (sales) are made to the number of clicks generated. A 50% conversion rate would indicate that one in every two people that clicks on the advert purchases from the website.

David Michaels

David Michaels, J.D., B.Eng., CHRM is a trained attorney who holds certificates in Canadian Trademark Law (2012) and Canadian Patent Law (1996) from McGill University. He has worked in the area of trademark law in Canada since 1995 and in the USA since 1993. David is a legal blogger, brand consultant, an eCommerce entrepreneur, and an aeronautical engineer. http://ca.linkedin.com/in/davidtmichaels/ Warning & Disclaimer: The pages, articles and comments on trademarkpro.ca do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the author's notes of the current state of trademark law and should not be attributed as opinions of the author, his employer, clients or the sponsors of trademarkpro.ca. The author does not warrant that these notes are up-to-date. Trademark law is constantly changing and it varies between jurisdictions and even within jurisdictions. This website should not be relied upon.

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