Before becoming involved in trademark litigation in Canada, it is crucial for parties to be aware of the standard for entitlement to damages or punitive damages.

A recent case decided by the Federal Court illustrated that even removing all of the uncertainties of determining liability, priority, and likelihood of confusion, the right to collect damages for an infringement is far from certain, and cannot be taken for granted.

In Clearview Plumbing & Heating Ltd. v. Clockwork IP, LLC 2018 FC 169, the parties filed an agreed statement of facts in which both parties agreed that they infringed the other’s trademark (PUNCTUAL PLUMBER and TECHNICAL SEAL OF SAFETY), and that there had been no confusion or any loss suffered as a result of the infringement.

The Plaintiff sought damages at large and/or punitive damages for the infringement of its rights. Justice McVeigh held that the concept of “damages at large” or damages without proof of loss does not exist under Canadian law. In cases in which it is difficult to quantify the loss, courts will on occasion award “lump sum damages”, but only where there is some evidence of loss, as opposed to speculative claims or arguments in support of loss.

The Plaintiff’s claim for punitive damages was also denied, despite evidence of the strain of the litigation and the litigation tactics of the Defendant. The Court held that punitive damages would only be awarded in the face of reprehensible conduct or repeated infringements.

Parties in Canadian trademark litigation therefore need to be aware that damages will only be awarded in cases where there is actual evidence of loss, and that punitive damages will only be awarded in the clearest cases of misconduct.