Using a Competitor's Trademark in Online Ads: What's Allowed in Canada?

Bidding on a competitor's brand name as a search keyword, naming them directly in a comparison ad, or referencing their product in a social media campaign — all of this happens constantly in Canadian advertising, and businesses are often unsure where the legal line actually sits. The short answer is that using a competitor's trademark in online ads is not automatically illegal, but several distinct areas of law can be triggered depending on exactly how you do it.

This article breaks down what is generally lower-risk, what tends to create real exposure, and the specific Canadian legal concepts that make this a genuinely different question than it would be in some other countries.

The Short Answer: It Depends on Confusion, Accuracy, and Goodwill

There is no single bright-line rule that says "you can never mention a competitor's brand" or "anything goes as long as it's true." Instead, several overlapping legal concepts apply, and the actual risk in any given campaign depends on the specific words, images, and context used.

What Tends to Be Lower-Risk

• Truthful, verifiable comparisons between your product and a competitor's, where the competitor is identified accurately and the comparison is not misleading.
• Using a competitor's name purely to explain that you are compatible with, or an alternative to, their product, without implying any affiliation, sponsorship, or endorsement.

What Tends to Be Higher-Risk

• Ad copy or landing pages that could lead a reasonable consumer to believe your business is affiliated with, sponsored by, or the same as the competitor.
• Using a competitor's logo or distinctive branding — not just their word mark — in a way that suggests an official partnership.
• Comparisons that are inaccurate, exaggerated, or presented in a misleading way.
• Repeated or prominent use of a competitor's mark in a way that goes well beyond what is needed to make an honest comparison.

Two Areas of Canadian Law That Apply Here

Trademark Law and Depreciation of Goodwill

Canadian trademark law includes a distinct concept — beyond ordinary confusion-based infringement — that can let a trademark owner object to a use of its mark that is likely to depreciate the value of the goodwill attached to it, even where consumers are not actually confused about the source of the goods. This is a meaningful difference from some other countries' trademark systems and is worth keeping in mind specifically for Canadian campaigns, since a comparison that disparages or unfairly rides on a competitor's brand can raise this issue even without creating confusion.

The Competition Act and Misleading Advertising

Separately, the federal Competition Act prohibits false or misleading representations in advertising, including in comparative advertising. A comparison that misstates a competitor's product, price, or features — not just one that misuses their trademark — can expose a business to a complaint or enforcement action under this framework, independent of any trademark issue.

A Practical Checklist Before You Launch the Campaign

• [ ] Confirm every factual claim about the competitor's product is accurate and can be backed up with evidence.
• [ ] Avoid using the competitor's logo or distinctive visual branding unless you have a specific legal reason to believe it is permitted.
• [ ] Review the ad copy for anything that could be read as implying affiliation, partnership, or endorsement.
• [ ] Keep the use of the competitor's name limited to what is genuinely necessary to make an honest, specific comparison.
• [ ] Have a lawyer review higher-visibility or higher-spend campaigns before launch, given how fact-specific this area is.

Frequently asked questions