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Use of competitor’s metatags supports claim for elevated legal costs

Originally published in AdvocateDaily.com

A recent decision from the Ontario Superior Court is of particular interest to trademark lawyers as it deals with using metatags of a competitor’s trademarks, says Toronto intellectual property lawyer John Simpson.

“The practice of using a competitor’s trademark as metatags — the HTML tags inserted in a Web page to describe its content and provide search engine keywords — has been addressed in the courts on a number of occasions in the context of whether and when it amounts to trademark infringement,” says Simpson, principal of Shift Law.

In the matter of Boaden Catering v. Real Food, 2016 ONSC 4098 (CanLII), the issue came up in a novel context — namely, whether the plaintiff’s use of the defendant’s trademarks as metatags could support the defendant’s claim for elevated costs.

In this case, which Justice John R. Sproat called a case “of considerable legal complexity,” Simpson successfully represented the defendants, Real Food for Real Kids Inc. and David Starbuck Farnell, obtaining summary judgment on behalf of the defendants, dismissing all of the plaintiff’s claims, and an order that the plaintiff compensate the defendants for all of their legal costs.

The plaintiff, Boaden Catering Ltd. — doing business as Organic Kids Catering (OKC), had sought relief against the defendants based on a number of allegations, including that the defendants were defaming OKC, misappropriating its menu and passing themselves off as OKC.

In dismissing all the plaintiff’s claims, Justice Sproat noted evidence raised by the defendants that OKC had used the defendants’ trademarks on its website to attract individuals searching for the defendants’ website. Since it was the plaintiffs who were suing the defendants, Justice Sproat noted that he need not determine whether the plaintiff’s practice was “strictly legal.” However, he described it as “unethical, deceptive and the antithesis of” the business values proclaimed by the plaintiff.

Simpson tells AdvocateDaily.com that these findings became especially relevant when awarding costs.

“A key factor the court will consider when ordering the losing party to compensate the winning party for its legal costs is whether the losing party engaged in reprehensible conduct,” he says.

In his costs order awarding full indemnity costs to the defendants, Justice Sproat stated: “My findings do amount to a finding of reprehensible conduct, justifying a cost award on a higher scale.”

Regarding other factors relevant to costs, Justice Sproat stated: “The hourly rate charged by Mr. Simpson was reasonable, I expected it would be higher” and “The time spent by Mr. Simpson was also reasonable. Having spent the time I did to review the voluminous material to write my decision I have a good appreciation for the time Mr. Simpson had to spend to master the material and the law — which he did.”

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