In Red Label Vacations Inc v 411 Travel Buys Limited,
2015 FCA 290, the Federal Court of Appeal has ruled that the trial
judge did not err in finding that the Plaintiff's trademark
rights were not infringed when its marks were used in metatags on
the Defendant's website. (Our discussion of the trial
judge's decision is available
here.) However, the Appeal Court commented that, in the right
circumstances, such employment of another's trademarks
could constitute infringement.
Red Label Vacations operates an online travel business. It sued
a competitor, 411 Travel Buys, over the latter's use of
metatags comprising Red Label's trademarks, including "Red
Tag Vacations" and "shop, compare, & pay less."
The metatags were not visible to users of the Defendant's
website. Red Label alleged copyright and trademark infringement,
depreciation of goodwill, and passing off.
The trial judge dismissed all the claims. He held that the
employment of a competitor's mark in metatags (that are not
ordinarily visible to the consumer) was not trademark
"use" and was not infringement. He found that the
contents of metatags do not by themselves constitute a basis for a
likelihood of confusion because consumers are still free to choose
and purchase goods or services from the website for which they
initially searched. He also commented that the concept of
"initial interest confusion" had not "gained a
foothold" in Canada. The copyright claims were dismissed on
the basis that the copied metatags were essentially generic terms
used in the travel industry and were not subject to copyright
protection -- the evidence had not shown sufficient skill and
judgment in creating the metatags, or originality in making a
compilation, as required by the tests in CCH and
The Court of Appeal reviewed on the deferential standard of
"palpable and overriding error." It found that the trial
judge cited the correct test for trademark infringement (i.e. the
Defendant must have sold or advertised services in association with
a confusing trademark), and found no error in the implicit finding
that 411 Travel Buys did not use any of Red Label's trademarks
"for the purpose of distinguishing or identifying 411 Travel
Buys' services in connection with Red Label's
services" (language from the 1996 Michelin v. CAW
decision), or in a way that would give rise to source
confusion. Also, there was no error in the trial judge's
finding that the metatags did not meet the threshold for copyright
protection in Canada.
However, the Court of Appeal stated that "in some
situations, inserting a registered trade-mark [or a confusing mark]
in a metatag may constitute advertising of services that would give
rise to a claim for infringement." In a concurring opinion,
Justice Dawson echoed these remarks holding that "the extent
to which a trademark may be used in metatags without infringing the
trademark is, of necessity, fact specific." Justice Dawson
commented that although the appeal was dismissed, this did not mean
that the appeal court endorsed every alternate basis on which the
trial judge dismissed the action, and that the reasons ought not to
be read as endorsing the trial judge's remarks relating to
initial interest confusion.
The Court of Appeal's decision thus leaves the door open to
future trademark infringement claims based on metatags.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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