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Federal Court of Canada examines metatags under copyright and trademark law
In the decision Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411 travelbuys.ca) 1, the Federal Court examined whether metatags attract copyright protection and whether use of a competitor’s trademark or trade name in metatags constitutes a violation of trademark rights in Canada. Metatags are words or phrases written in a website’s source code that search engines use to rank websites and which are not displayed on the actual webpages. Although the issue of intellectual property protection in the context of metatags is the subject of heated debate all over the world, this decision marks one of the first times that the Federal Court has provided clarification on how metatags fit within the Canadian copyright and trademark schemes. Facts Red Label Vacations Inc. (the plaintiff), a business offering online travel information via its website redtag.ca, is the owner of three registered trademarks: “redtag.ca”, “redtag.ca vacations” and “Shop. Compare. Payless!! Guaranteed”. The plaintiff began an action before the Federal Court for copyright infringement, trademark infringement, passing off and depreciation of goodwill against its competitor, 411 Travel Buys Limited (the defendant), an online travel agency. Specifically, several of the defendant’s webpages contained metatags that were identical or similar to the plaintiff’s metatags, including the words “red tag vacations” and “shop, compare & payless”. Since the allegedly infringing content was only found in the defendant’s metadata, it was not visible to consumers visiting the defendant’s website. The Court dismissed the plaintiff’s action. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> Decision Concerning the alleged copyright infringement, the Court held that although the defendant copied the plaintiff’s metatags, there was no infringement since the plaintiff’s metatags did not acquire copyright protection. The Court’s rationale was based on evidence that the plaintiff’s metatags came from a list of Google key words which were combined into small generic phrases descriptive of the travel industry. As such, the threshold of originality laid out by the Supreme Court of Canada 2, i.e. requiring sufficient skill and judgment, was not met. Further, the Court concluded that in the hypothetical situation that copyright could exist in the plaintiff’s metatags, no substantial copying had occurred since only 48 out of approximately 180,000 pages of the plaintiff’s website were copied by the defendant. Finally, Justice Manson observed that the defendant inadvertently reproduced the redtag.ca metatags and that it would have nonetheless been considered innocent infringement. With regard to the alleged trademark violation, the Court acknowledged that several of the defendant’s metatags contained the dominant terms of the plaintiff’s registered trademarks and trade name, but that they were not visible to customers visiting the defendant’s webpages. The Court further indicated that the defendant had not “used” the plaintiff’s trade name or trademarks on their website. With respect to the allegations of trademark infringement and depreciation of goodwill, the Court reiterated that there had been no “use” of the plaintiff’s trademarks within the meaning of the Trademarks Act, making the claims inapplicable since “use” is a prerequisite for such claims. In assessing whether the plaintiff could succeed in a passing off claim under section 7(b) of the Trademarks Act, the Court reiterated the 3 elements that must be proven: (i) the existence of goodwill, (ii) the likelihood of deception of the public due to a misrepresentation, and (iii) actual or potential damage. The Court found that the plaintiff’s trade name Red Tag and trademarks “redtag.ca” and “Shop. Compare. Payless!! Guaranteed.” had the necessary goodwill to satisfy the first prong of the test. On the question of misrepresentation, the defendant’s use of the words “red tag” in their metadata led to redirected traffic from the plaintiff’s website to that of the defendant, both of which offer travel services to Canadians. Justice Manson’s inquiry turned on whether the defendant’s use of the dominant words of the plaintiff’s trademarks and trade name in their metatags was likely to cause deception. The Court remarked that the use of metatags in search engines provides consumers with a list of distinct links to choose from and that it does not direct them to a specific website. Although the consumers’ choice might be impacted by where a link ranks on a page of search results, the consumers always have the choice to pick the link of the particular competitor they had initially searched for. In this respect, the Court stated that: “…Accordingly, use of a competitor’s trademark or trade name in metatags does not, by itself, constitute a basis for a likelihood of confusion, because the consumer is still free to choose and purchase the goods or services from the website he or she initially searched for.” For these reasons, the Court concluded that there was no likelihood of deception and rejected the plaintiff’s claim of passing off. Our thoughts on the Federal Court decision (i) Copyright protection in metatags Although Justice Manson did not dismiss the possibility of “original” metatags, we find it unlikely that most metatags have the potential to enjoy copyright protection in Canada. Metatags, mainly composed of descriptive key words that businesses use to attract consumers to their website, are largely guided by their function to affect search engine behavior. In this respect, they have been labelled as nothing more “than the operation of an algorithm” 3. As such, it is doubtful that a metatag can be embedded with sufficient skill and judgment. It will be interesting to see whether a future decision will provide details on what constitutes a sufficiently “original” metatag to acquire copyright protection in Canada. (ii) Use of a competitor’s trademark and trade name in metatags: a case of unfair competition? No passing off was established on the basis that metatags in a search engine simply influence website rankings while the consumers are free to choose the link representing the initial source they desired. The claims for trademark infringement and depreciation of goodwill were equally rejected as there was no “use” within the meaning of the Trademarks Act by the defendant of the plaintiff’s trade name or trademarks. While we agree with the Federal Court’s statement that there can be no trademark violation without “use” of a trademark, we wonder whether, with the proper evidence of consumers’ perceptions and reactions, this practice could constitute a form of unfair competition. Conclusion The plaintiff filed for an appeal of the Federal Court’s decision. As such, the Court of Appeal may further develop the question of intellectual property rights in metatags. We suggest you tag along… Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca), 2015 FC 19 (CanLII). CCH Canadian Ltd v. Law Society of Upper Canada, 2004 SCC 13. Insurance Corp of British Columbia v. Stainton Ventures Ltd, 2012 BCSC 608.
The Oasis case: When juice turns to vinegar – The impact of social media on justice
Two Lassonde companies (hereinafter Lassonde), holders of the OASIS trade-mark used mainly to identify fruit juices, instituted legal proceedings against Oasis d’Olivia Inc., requesting that the Quebec Superior Court order it to stop using the OLIVIA’S OASIS trade-mark for soap, and to pay exemplary and punitive damages. Lassonde also opposed the registration of the OLIVIA’s OASIS trade-mark before the Canadian Intellectual Property Office. Lassonde lost before the Superior Court, which found that there was no likelihood of confusion between the two trade-marks and condemned Lassonde’s abuse of procedure, ordering it to reimburse Oasis d’Olivia’s legal fees and to pay $25,000 as punitive damages. Lassonde appealed the question of legal fees and punitive damages to the Quebec Court of Appeal, where the decision of the Superior Court was quashed because there was no evidence of abuse of procedure. After analyzing Lassonde’s behavior in this case, the absence of explicit intimidation, and in view of the fact that the exercise of two concurrent remedies is common practice in trade-mark matters, the Court of Appeal was not convinced that there was an abuse of procedure. The Court added that the legal question at the heart of the debate must not have been obvious considering that the trial judge wrote a 50-paragraph judgment after 5 days of trial and a long deliberation. Following the Court of Appeal’s decision, the press, closely followed by social media, seized on the matter and expressed such dissatisfaction that Lassonde decided to retreat and to reimburse Oasis d’Olivia Inc.’s legal fees. The following reflections stem from these events: 1. A trade-mark owner must exercise judgment to identify the situations where he should take action and those where he should refrain from acting. When an owner analyzes this question, he must take into account his chances of success, the importance of the problem and the future impact on his rights, etc., and he must also explore the possible impact of such an action on his reputation. This consideration is not new but is increasingly important now that social media can spread information around the world instantly. 2. The Court of Appeal stressed that legal action was justified as a means to strengthen Lassonde’s identification to its trade-mark. We add that a trade-mark owner who does not react when his rights are violated can see his rights undermined and even nullified in certain circumstances. 3. Article 54.1 of the Québec Code of Civil Procedure states that an action may be deemed improper if it is clearly unfounded. Given that the trade-marks in question have significant differences as far as the phonetic, visual and semantic aspects are concerned, that the term OASIS has a meaning in ordinary language, that no one can own this term, that the protagonists sold their products for different purposes and to different clients, that their products were not found side by side in the same establishments and that there was no overlapping of distribution niches, we question the legal basis for the action. 4. It may be difficult to show an abuse of procedure. One cannot unduly interfere with access to our legal system. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> 5. The duration of the trial is not indicative of abuse but depends on the efforts deployed by both parties. The long decision could be explained by the fact that the analysis of the likelihood of confusion requires the examination of several criteria and considerations, which has no bearing on whether or not the conclusion could be easily predicted. 6. Social media can react to situations in an unfair manner although there is no question that their impact is powerful. The opinions expressed on social media do not necessarily take into account the rules of law and evidence, and may even be contrary to law. Social media can lead to other types of abuse such as, for instance, when contributors are moved by their degree of sympathy for the parties involved more than by a consideration for their legal rights. 7. Properly used, social media may be an interesting tool for whoever wants to gather information to assert their rights, to identify those who have received similar demand letters and those who decide not to sue or not to defend themselves for lack of sufficient economic means, and thus, social media may assist in gathering broad evidence of abuse of procedure.