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

Court of Appeal for British Columbia

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Reasons for Judgment of the Honourable Mr. Justice Chiasson:

 Introduction

[1] The appellant is a regulatory body created by the Private Career Training Institutions Act, S.B.C. 2003, c. 79 [the Act]. The respondent Vancouver Career College (Burnaby) Inc. provides career training in a number of fields through the other named respondents.

[2] The respondents paid Internet search engines such as Google or Yahoo for the use of competitors’ names as a “keyword”. This resulted in one of the respondent’s name appearing first or in another preferred position on a list of names that appeared when a user searched the Internet using the competitors’ name.

[3] The appellant sought an injunction to prevent the respondents from using the names of competitors in its Internet advertising in contravention of the appellant’s Bylaw 29(1) which states:

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

[4] The chambers judge refused the injunction because he concluded the appellant had not satisfied him that the respondents’ use of their competitor’s names was misleading or was likely to mislead. He held it akin to a business paying to have its name placed next to a competitor’s name in the Yellow Pages of a telephone book.

[5] For the reasons that follow I would dismiss this appeal.

 Background

[6] Internet search engines commonly sell the use of keywords to the highest bidder for a period of time on the basis that the purchaser’s name will appear at the top of a list of names or in a special section on the first page that appears when a user searches the Internet using the competitors’ name. The purchaser’s listing may be identified as a “sponsor”, an “ad” or not at all. Other names appear in an organic list below the purchasing company’s name in an order of priority developed by the search engine.

[7] For example, a Google search of “Sprott-Shaw Community College” produced a page with a box at the top right of the page containing a list of “sponsored links”– the first one of which was the respondent Vancouver Career College. Sprott-Shaw also appeared on the page. A Google search of the term “vanarts” produced a page on the top of which was the name Vancouver Art College, the internet address of which was the respondent Vancouver College of Art and Design. This was identified as a sponsored link. The respondent’s competitor, Van Arts school, was listed next below the respondent.

[8] Disagreement arose among career colleges over the use by the respondents of competitors’ names and complaints were made to the appellant as a result of which it issued a guideline interpreting Bylaw 29(1):

Internet Advertising

With respect to internet advertising, the [appellant’s] Board agreed bymotion at its meeting of June 18, 2009 that the use of another institution’s trademarks, logo, or business name, or anything confusingly similar, by a registered institution in any metatags (website or html), search engine AdWords, adCenter keywords, or any similar medium for advertising purposes shall constitute false, deceptive or misleading activity within the meaning of Bylaw 29.1, and is prohibited.

[9] The respondents persisted in their practice contending it did not contravene the Bylaw. This led to the appellant’s application for an injunction pursuant to s. 24 of the Act, which provides that “on being satisfied there are reasonable grounds to believe” that an individual or organization has contravened or is likely to contravene the bylaws of the appellant, the Supreme Court may enjoin a person from contravening or require compliance with the bylaws.

[10] Included in the material supporting the application were affidavits from two students. Ms. Patterson deposed that she Google-searched for Van-Arts and was directed to an Internet page with the names “Vancouver Art College” and “VanArts School”. She requested information from both schools thinking the web-sites were for the same institution. She received telephone calls from both institutions and realized they were not the same. She enrolled in VanArts School.

[11] Ms. Eppele searched for Vancouver Community College. The first name on the resulting Internet page was that of the respondent Vancouver Career College. She accessed the web-site of this respondent, arranged for an interview and ultimately enrolled at the respondent. She then discovered her mistake, cancelled her registration and enrolled in Vancouver Community College. The respondent refunded her registration fee.

 The reasons of the chambers judge

[12] The judge stated the approach to interpreting Bylaw 29 in para. 53:

The proper approach to the interpretation of Bylaw 29 is set out in E.A. Driedger, The Construction of Statutes (Toronto: Butterworths, 1974) at p. 67 and affirmed by Iacobucci, J. in Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42, at para. 26:

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

[13] He then turned to the definition of “misleading”:

[54] In Director of Trade Practices v. Household Finance Corporation of Canada, [1976] B.C.J. No. 1316 (S.C.) the Court was faced with an alleged breach of s. 2(1) of the former Trade Practice Act, R.S.B.C. 1974, c. 96 (now repealed), which read in part:

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

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

(b) any conduct having the capability, tendency, or effect of deceiving or misleading a person.

[55] In addressing the meaning of “misleading”, Hutcheon J. observed at paras. 18 and 20:

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

  …

[20] Having in mind the examples of deceptive acts given in s. 2(3), I conclude that an act having the tendency of deceiving or misleading a person is one that tends to lead that person astray into making an error of judgment.

[56] The meaning of “mislead” was also considered in Lotte Enterprises v. B.C. (Private Post-Secondary Education Commission), 2001 BCSC 1613. In that case, Pitfield J. quashed an order of the Agency’s predecessor, the Private Post-Secondary Education Commission, which directed a registered institution to refund the tuition fees of a student because of an alleged misrepresentation on the part of the institution regarding the qualifications of its instructors. When addressing the question of whether the student in question was misled by the representation, Pitfield J. opined at para. 23:

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

[14] The judge observed that he had been referred to no cases in Canada that had addressed keyword advertising. Reference was made to decisions made in the courts of the United States which had done so. After reviewing these cases, the judge stated in paras. 61 - 63:

[61] Although apparently no Canadian court has opined on the propriety of Keyword Advertising that uses the business name of competitors, in my view resort can be had to the Canadian jurisprudence that has developed in the area of trademark law in order to glean what is meant by the term “confusing” or “misleading” in the context of alleged improper advertising. An essential element to a claim of statutory passing-off under s. 7(b) of the Trade-marks Act, R.S.C. 1985, c. T-13 is the presence of “confusion”.

[62] To determine whether trademarks are confusing, the Court must make a determination of their effect on those persons who normally comprise the relevant market. The average consumer will not be the same for different products, and will not have the same attitude at the time of purchase: United Artists Corp. v. Pink Panther Beauty Corp. (1998), 80 C.P.R. (3d) 247 (F.C.A.).

[63] Moreover, in assessing the likelihood of confusion, the Court ought to give the average consumer a certain amount of credit. Consumers are not generally completely devoid of intelligence or of normal powers of recollection; nor are they totally unaware or uniformed as to what goes on around them. The overriding consideration regarding the likelihood of confusion is “all the surrounding circumstances”. This allows the Court to examine and assess any and all facts peculiar to the case before it: Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22.

[15] The judge identified the issue to be decided in para. 65 as whether the respondents “use of Keyword Advertising and more particularly the use of competitors’ names in that form of internet marketing is misleading”.

[16] He accepted the appellant’s position that the analysis “must not lose sight of the [appellant’s] consumer protection mandate and the fact that Bylaw 29 was passed in order to protect any potential student from being deceived and potentially harmed by misleading advertising”.

[17] He observed that the services being offered were post-secondary courses that costs between $4,000 and $24,000 and that embarking on such a program involves a serious decision by students. He then reviewed the evidence of Ms. Eppele and Ms. Patterson and concluded they were not misled by the respondents’ use of its competitors’ names as keywords.

[18] The judge stated in para. 78 that the appellant “has not persuaded me that [the respondents’] Keyword Advertising strategy has actually or could in the future lead a potential student astray or into making a harmful error of judgment”. He expressed his conclusions in paras. 82 - 84:

[82] I find [the respondent’s] advertising program, including its use of Keyword Advertising that incorporates the names of competitor institutions, was not designed to mislead anyone. The two situations of what the [appellant] says were students who were deceived by [the respondent’s] advertising are, in my opinion, actually examples of students who made mistakes and it was their own actions or inactions that prompted the errors. Had they been more cautious in their reviews of their search results they would have realized that they were looking at a website of an institution other than the one they were initially seeking.

[83] In my opinion, [the respondent’s] internet advertising strategy provided Ms. Eppele and Ms. Patterson with the opportunity to investigate and consider other institutions besides the ones they were looking for. Not only do I find there is nothing wrong with that, I think the option to examine a number of institutions offering similar educational programs is a good one for the consumer.

[84] Having considered and incorporated the principles articulated in the American jurisprudence on Keyword Advertising as well as the Canadian cases that have dealt with allegations of confusing or misleading advertising in the context of trademark disputes, I am satisfied that the impugned advertising strategy of [the respondent] is not false, deceptive or misleading. Consequently, I find [the respondent] has not breached Bylaw 29.

 Positions of the parties

[19] The appellant asserts that the judge erred “by applying principles of trade-mark law to the interpretation of a consumer protection statute”.

[20] The respondents contend the issue is whether the judge “made an error of mixed law and fact including that the [respondents’] keyword advertising efforts did not contravene Bylaw 29”.

 Discussion

Standard of review  

[21] The appellant asserted that this Court should defer to its interpretation of Bylaw 29(1) because it is a specialized administrative tribunal. The contention is misplaced.

[22] The application before the chambers judge was for an injunction, not for the judicial review of an administrative decision. The appellant was the applicant. It was obliged to satisfy the court that there were reasonable grounds to believe that the respondents’ arrangement with the search engines was misleading advertising. The appellant could urge its interpretation of the Bylaw on the court, but the court was obliged to interpret the bylaw and then to determine whether the appellant had established the required reasonable grounds.

[23] Because the appellant urged this Court to accept its interpretive guideline on the basis of deference, the respondents sought to introduce fresh evidence to show the course of dealings between the parties in advance of the hearing of the appellant’s application. I would not admit the fresh evidence because I conclude that no issue of deference arises in this case.

The issue  

[24] The judge identified the issue before him as whether the respondents’ form of Internet marketing was misleading advertising. In my view, the statement places the bar too high, but I am satisfied the judge did address the correct issue which is: whether there were reasonable grounds to believe that the respondents’ form of Internet marketing was misleading advertising.

[25] This is apparent from the judge’s conclusion that the appellant did not persuade him that the advertising could lead a potential student astray. He stated that this was because the information available to students on the web-page was more than adequate to alert them to the fact that the respondents’ Internet site was not the site in which they were interested. In addition, the judge concluded that the respondents’ keyword advertising did not mislead the two students because they did not deal reasonably with the information that was available to them. In my view, the judge was not satisfied that there were reasonable grounds to believe the respondents contravened Bylaw 29.

Analysis  

[26] In argument before the chambers judge and in this Court, the respondents contended that their keyword advertising is akin to advertising that places a business advertisement proximate to a competitors listing in the Yellow Pages of a telephone book. The appellant rejects this contention as do I, but I do not accept the appellant’s assertion that the proper analogy is to the white pages where individual names appear.

[27] These propositions seek to analyze the legal implications of the use of modern technology with practice and technology that bears no resemblance to it. The Yellow Pages are based on topics, not names. The white pages contain names, but no choices. An Internet page gives choices, names and topics. It is information technology carried far beyond the traditional.

[28] The task for the chambers judge in this case was to consider whether there were reasonable grounds to believe that the results of the use of today’s technology misled or were likely to mislead. That is, whether using a competitor’s name as a keyword to electronically produce a web-page showing the respondents’ web-site in priority on a list of possible career colleges was misleading or likely to mislead.

[29] In its factum, the appellant contends that the judge’s reference to trade-mark cases was an error because it led him to consider the effect of the respondents’ keyword advertising on average consumers as opposed to “vulnerable” consumers, potential students of the training institutions.

[30] Notwithstanding its position on the judge’s use of trade-mark authorities, at the hearing of the appeal, the appellant sought to support its contention the advertising was misleading on the basis of cases that considered whether the use of a trade-mark was confusing. The genesis of the appellant equating “misleading” with “confusing” appears to be its interpretive guideline which was based on trade-mark and confusion. The judge also focused to some extent on whether the respondents’ keyword advertising was confusing.

[31] In my view, cases that deal with confusion in the trade-mark context are not of assistance in this case.

[32] Bylaw 29(1) prohibits “false, deceptive or misleading” advertising. The Concise Oxford English Dictionary, 11th edition, defines “confusion” as, “the state of being bewildered, the mistaking of one…thing for another”. “Mislead” means “cause to have a wrong impression”. The definition of “deceptive” includes “misleading” and “giving an appearance or impression different from the true one”.

[33] I do not accept the appellant’s argument insofar as it is based on equating misleading with confusing. In my view, advertising that is misleading also likely is confusing, but simply because advertising is confusing does not mean it is misleading.

[34] I am not satisfied that the judge’s reference to trade-mark cases undermined his consideration of the appropriate consumer. As noted previously, in paras. 62 and 63, he discussed the approach to be taken to the average consumer.

[35] He was alive to the need to consider the applicable consumer in context. He did not err in concluding the consumer must be given credit for having normal intelligence.

[36] The judge was well aware of the composition of the potential student body, but he was entitled to put the issue into context. He observed that the decision to spend thousands of dollars and several years on a course of education was very important. It was reasonable to expect that potential students would approach the issue with some care. He found that the only two students whose evidence was given to him did not exercise appropriate care. In addition, there was no evidence to suggest that these students were particularly vulnerable. Although there was some evidence that many potential students are international, for whom English would not be their first language, the evidence also showed that these persons would be familiar with the Internet.

[37] The judge correctly focused on the definition of “misleading”. He did not need to go beyond that to determine whether there were reasonable grounds to believe that the keyword advertising of the respondents’ contravened Bylaw 29.

Conclusion  

[38] It is important to understand what this case concerns. It is not a dispute over intellectual property and the result should not be considered in that context.

[39] The application before the chambers judge was for an injunction. The burden was on the appellant to satisfy the judge that there were reasonable grounds to believe that the respondents’ use of keyword advertising was actually or potentially misleading. He found as a fact that the appellant had not established that the respondents’ keyword advertising was actually or potentially misleading. He stated that the appellant had not persuaded him that the respondents’ use of its competitors’ names in keyword advertising “could…lead a student astray or into making a harmful error of judgment”. There was evidence to support those findings.

[40] In my view, that evidence and the judge’s findings show that he was not satisfied that there were reasonable grounds to believe that the respondents contravened Bylaw 29(1). There is no basis on which this Court should or could interfere.

“The Honourable Mr. Justice Chiasson”

I agree: “The Honourable Madam Justice Prowse”

I agree: “The Honourable Madam Justice Kirkpatrick”

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