{"id":40177,"date":"2025-10-17T10:40:01","date_gmt":"2025-10-17T14:40:01","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=40177"},"modified":"2025-10-17T10:40:04","modified_gmt":"2025-10-17T14:40:04","slug":"can-a-business-use-a-competitors-name-in-online-advertising-what-canadian-courts-say","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/commercial-litigation\/can-a-business-use-a-competitors-name-in-online-advertising-what-canadian-courts-say\/","title":{"rendered":"Can a business use a competitor\u2019s name in online advertising?\u00a0What Canadian courts say"},"content":{"rendered":"\n

Even though online commerce has been around for decades, Canadian courts have provided little guidance on the permissible use of competitors\u2019 trade names in internet advertising. In the absence of an explicit statutory framework, courts have relied on section 7(b) of the Trademarks Act<\/em><\/a> and the tort of passing off to assess whether such practices mislead consumers, occasionally granting injunctions where confusion is likely.<\/p>\n\n\n\n

Businesses are becoming increasingly dependent on search engine optimization (\u201cSEO<\/strong>\u201d) and paid search ads (pay-per-click, or \u201cPPC<\/strong>\u201d), where keywords and \u201cmeta tags\u201d may \u2013 whether inadvertently or by design \u2013 encroach on a competitor\u2019s branding. Understanding what courts have allowed and where they have drawn the line is essential to managing digital advertising risk.<\/p>\n\n\n\n

What are meta tags and why can they be problematic?<\/h2>\n\n\n\n

Meta tags are invisible snippets of code embedded in a website that help search engines categorize content.  For instance, a company can use a competitor\u2019s trade name as an invisible meta tag on its website, allowing its business to appear in search results when the competitor\u2019s trade name is entered into a search engine.<\/p>\n\n\n\n

However, this tactic can raise issues of confusion and unfair competition, as courts may view it as an attempt to divert potential customers. This was the concern in the 2007 Ontario Superior Court of Justice decision<\/a> Pandi v. Fieldofwebs<\/em>, where the defendant, Fieldofwebs, used Pandi\u2019s store name \u2013 \u201cJumpin Jammerz\u201d \u2013 as a hidden meta tag on its website. Justice Low noted that \u201cin [her] view, the practice of using another trader\u2019s domain name, trade name, trade mark or logo as a meta tag for a website selling competing wares is objectionable unless the name or mark itself is merely descriptive of the wares sold\u201d (para 39<\/a>). However, because Fieldofwebs had already removed the offending meta tag, the court did not issue an injunction restricting its use of \u201cJumpin Jammerz\u201d in internet advertising.<\/p>\n\n\n\n

How have Canadian courts addressed keyword advertising?<\/h2>\n\n\n\n

In <\/em>Private Career Training Institutions<\/em> Agency v. Vancouver Career College (Burnaby) Inc.<\/em> (2010 BCSC 765)<\/a> (\u201cPrivate Career<\/em><\/strong>\u201d), the British Columbia Supreme Court (the \u201cBCSC<\/strong>\u201d) and the British Columbia Court of Appeal (the \u201cBCCA<\/strong>\u201d) took a broader view of keyword and PPC advertising. In that case, the Private Career Training Institutions Agency (the \u201cAgency<\/strong>\u201d) published a bylaw interpretation that Vancouver Career College\u2019s practice of bidding on competitors\u2019 trade names \u2013 so that its ads appear first in search results \u2013 contravened the Agency\u2019s Bylaw 29. \u00a0<\/p>\n\n\n

Bylaw 29 provided that:<\/p>\n

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.<\/p>\n\n\n

Because limited Canadian case law existed on the issue, Justice Gaul reviewed U.S. authorities on keyword advertising, which identified situations where customer confusion resulted from seeing a competitor\u2019s information instead of that of the business they were searching for. The BCSC noted that although no Canadian authorities had addressed the use of keyword advertising involving competitors\u2019 names, the Canadian Trademarks Act<\/em> similarly addresses \u201cconfusion\u201d under s. 7(b) on passing off, consistent with the U.S. case law reviewed.<\/p>\n\n\n\n

The BCSC concluded that Vancouver Career College had not breached the Agency\u2019s bylaw because potential customers who inadvertently reached its website could still view other pages listed in the search results. Justice Gaul analogized the situation to companies placing advertisement next to a competitor\u2019s phone number in a phone book: the competitor\u2019s potential customers simply become aware of another company offering similar services, but still make their own choice about which business to engage.<\/p>\n\n\n\n

This pragmatic analogy illustrates how courts may tolerate keyword bidding when transparency and consumer choice remain intact.<\/p>\n\n\n\n

What role does \u201cpassing off\u201d play in these cases?<\/h2>\n\n\n\n

The Federal Court in Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca)<\/em> (2015 FC 18)<\/a> applied the tort of passing off under section 7(b) of the Trademarks Act<\/em> in considering the use of competitors\u2019 trade names in internet advertising. Red Label Vacations Inc. (\u201cRed Label<\/strong>\u201d) brought an action against 411 Travel Buys Limited for passing off, among other claims. Justice Manson noted that to establish passing off under s. 7(b) of the Trademarks Act<\/em>, Red Label was required to prove three elements:<\/p>\n\n\n\n

    \n
  1. the existence of goodwill;<\/li>\n\n\n\n
  2. the likelihood of deception of the public due to a misrepresentation; and<\/li>\n\n\n\n
  3. actual or potential damage.<\/li>\n<\/ol>\n\n\n\n

    Goodwill refers to \u201ca consideration of whether the plaintiff was recognized by the trade name and whether the trade name was distinctive within the relevant field of activity.\u201d The court assessed these elements as follows:<\/p>\n\n\n\n

      \n
    1. Goodwill: <\/strong>Red Label had sufficient goodwill in its \u201credtag.ca\u201d and \u201cShop. Compare. Payless!! Guaranteed.\u201d trademarks based on extensive marketing campaigns using this name and slogan.<\/li>\n\n\n\n
    2. Deception (Confusion): <\/strong>The use of a competitor\u2019s trademark or trade name in a meta tag does not, on its own, create a likelihood of confusion, as consumers still land on the search engine results page and can choose which business to pursue.<\/li>\n\n\n\n
    3. Damage: <\/strong>Because the court found no likelihood of deception, it did not address the issue of damage.<\/li>\n<\/ol>\n\n\n\n

      Although Red Label had sufficient goodwill in its trademarks, the absence of deception and damage meant that the court did not find 411 Travel Buys Limited liable for passing off, particularly since Red Label\u2019s trademarks and trade names were not visible on 411 Travel Buys Limited\u2019s website.<\/p>\n\n\n\n

      How did later cases refine the rule?<\/h2>\n\n\n\n

      The leading case on the use of competitors\u2019 trade names in internet advertising, Vancouver Community College v. Vancouver Career College (Burnaby) Inc.<\/em> (2017 BCCA 41) <\/a>(\u201cVCC<\/em><\/strong>\u201d), confirmed that using a competitor\u2019s name as a keyword can constitute passing off when confusion is likely. \u00a0Similar to Private Career<\/em>, the BCCA in VCC<\/em> addressed Vancouver Career College\u2019s bidding on keywords containing its competitors\u2019 trade names and trademarks, including \u201cVCC\u201d and \u201cVancouver Community College.\u201d Vancouver Community College brought an action for passing off, and Justice Saunders noted that courts must consider both section 7(b) of the Trademarks Act<\/em> and the common law when assessing a claim of passing off.<\/p>\n\n\n\n

      In applying the elements of passing off, the BCCA found the following:<\/p>\n\n\n\n

        \n
      1. Goodwill: <\/strong>Vancouver Community College had goodwill in \u201cVCC\u201d because it had registered the initials as a trademark and was widely recognized under that acronym, including through media use and the naming of the nearby SkyTrain station \u201cVCC\/Grant Station.\u201d<\/li>\n\n\n\n
      2. Deception (Confusion):<\/strong> Confusion could reasonably result from both entities operating under the same \u201cVCC\u201d initials.<\/li>\n\n\n\n
      3. Damage:<\/strong> The court stated that \u201cthe interference with the appellant\u2019s goodwill [was] sufficient to establish damage.\u201d<\/li>\n<\/ol>\n\n\n\n

        The BCCA concluded that Vancouver Career College (Burnaby) had committed the tort of passing off contrary to section 7(b) of the Trademarks Act<\/em>, and Vancouver Community College was entitled to a permanent injunction prohibiting Vancouver Career College (Burnaby) from using \u201cVCC\u201d in its internet advertising.<\/p>\n\n\n\n

        Although few Canadian cases on the use of competitors\u2019 trade names in internet advertising have emerged since VCC<\/em>, the Court of Appeal of Quebec (\u201cQCCA<\/strong>\u201d) applied similar principles in a dispute between competing shed and garage manufacturers and distributers. In Cabanons Fontaine inc. v. 9036-4316 Quebec inc. (Cabanons Mirabel)<\/em> (2022 QCCA 1243)<\/a>, Cabanons Mirabel brought a passing off action against Cabanons Fontaine after the latter used \u201ccabanonsmirabel\u201d in its internet advertising for the Mirabel area, including registering the domain name \u201ccabanonmirabel.ca.\u201d<\/p>\n\n\n\n

        In its assessment of passing off, the QCCA found:<\/p>\n\n\n\n

          \n
        1. Goodwill: <\/strong>Although Cabanons Mirabel had not registered a trademark for its name, more than 30 years of marketing under that name led the court to find that Cabanons Mirabel had established sufficient goodwill.\u00a0<\/li>\n\n\n\n
        2. Deception (confusion): <\/strong>The court focused on the domain names \u201ccabanonsmirabel.ca\u201d (used by Cabanons Mirabel\u2019s) and \u201ccabanonmirabel.com\u201d (which redirected customers to Cabanons Fontaine\u2019s website). The QCCA agreed with the trial judge that \u201cthe consumer who wishes to visit the \u2026 cabanonsmirabel.com website, but who types \u2018.ca\u2019 or forgets the \u2018s\u2019 is automatically and erroneously directed to the Cabanons Fontaine website.\u201d<\/li>\n\n\n\n
        3. Damage: <\/strong>The court inferred that Cabanons Mirabel likely lost sales because potential customers were inadvertently redirected to Cabanons Fontaine\u2019s misleading domain.<\/li>\n<\/ol>\n\n\n\n

          Finding that Cabanons Fontaine had committed the tort of passing off, the QCCA upheld the lower court\u2019s decision granting Cabanons Mirabel a permanent injunction restraining Cabanons Fontaine from using \u201ccabanonmirabel.com\u201d or similar keywords in its internet advertising.<\/p>\n\n\n\n

          Key takeaways<\/h2>\n\n\n\n

          In assessing the use of competitors\u2019 trade names in internet advertising, Canadian courts are likely to apply a passing off analysis that considers the following:<\/p>\n\n\n\n

            \n
          1. Goodwill: <\/strong>Does the competitor have sufficient goodwill in the trade name to distinguish it from other similar businesses or products? \u00a0In other words, is the competitor\u2019s name recognized and distinctive?<\/li>\n\n\n\n
          2. Deceit (Confusion): <\/strong>Would the business\u2019 use of a competitor\u2019s trade name cause confusion among consumers seeking the competitor?<\/li>\n\n\n\n
          3. Damage: <\/strong>Would the business\u2019 use of the competitor\u2019s trade name cause damage (e.g., loss of sales) to the competitor?<\/li>\n<\/ol>\n\n\n\n

            If a court finds that all three elements are met, it may grant a permanent injunction preventing the business from using its competitor\u2019s trade name in internet advertising.  A key consideration appears to be whether the competitor\u2019s trade name is visible on the business\u2019 website or remains invisible to consumers in meta tags.<\/p>\n\n\n\n

            What\u2019s next for businesses advertising online?<\/h2>\n\n\n\n

            Case law on this topic remains limited, but the trend is clear: Canadian courts appear to permit the use of a competitor\u2019s name in internet advertising, provided it does not cause customer confusion. This approach is likely to continue in the absence of new statutory or regulatory provisions specifically addressing internet advertising. Businesses should therefore avoid using competitors\u2019 names in any manner that could confuse consumers or suggest an affiliation.<\/p>\n\n\n\n

            If your business advertises online, ensure your marketing practices comply with trademark and competition laws.  Please contact a member of our Commercial Litigation Group<\/a> to assess your risk and protect your brand.<\/p>\n","protected":false},"excerpt":{"rendered":"

            Even though online commerce has been around for decades, Canadian courts have provided little guidance on the permissible use of competitors\u2019 trade names in internet advertising. In the absence of an explicit statutory framework, courts have relied on section 7(b) of the Trademarks Act and the tort of passing off to assess whether such practices […]<\/p>\n","protected":false},"author":122,"featured_media":25530,"parent":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[545],"insight-format":[416],"class_list":["post-40177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-litigation"],"acf":[],"yoast_head":"\nCan a business use a competitor\u2019s name in online advertising?\u00a0What Canadian courts say | Miller Thomson<\/title>\n<meta name=\"description\" content=\"Canadian courts have relied on passing off principles under section 7(b) of the Trademarks Act to evaluate when using competitors\u2019 trade names in online ads misleads consumers or breaches fair competition rules.\" \/>\n<meta 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