Punctual Plumber's Damage Claims Go Down The Drain

Should "winning" a trademark infringement claim automatically mean an award of monetary damages, even without evidence of economic loss or other damage? Does the stress and strain of litigation, even in a potential "David and Goliath" scenario, justify an award of punitive damages? Those were the issues presented to the Federal Court in Clearview Plumbing & Heating Ltd. and Giraffe Corp vs. Clockwork IP, LLC, et al. 2018 FC 169, a recent decision of Justice McVeigh.

Before trial, there was an agreed statement of facts in which both parties agreed that they infringed each other's trademark and that there has been no confusion or any loss suffered as a result of the infringement. Despite this, the plaintiffs were seeking "damages at large", or in the alternative, punitive damages, based on the defendants' allegedly reprehensible conduct. The decision confirmed that even if the other party concedes infringement, damages may not be awarded unless there is evidence of an actual loss. Further, the decision confirmed that punitive damages will only be awarded in exceptional cases involving reprehensible conduct, and that the ordinary steps and tactics in litigation will typically not satisfy this test.

The facts, in brief, are as follows: The plaintiffs ("Clearview") are the owner and license of a 2006 trademark registration for THE PUNCTUAL PLUMBER for plumbing and other home care services, now owned by a holding company. Clearview also used THE TECHNICIAN SEAL OF SAFETY, but did not register this mark. The defendant Clockwork operates a franchise business, with U.S and Canadian franchisees, and owns a 2007 United States registration for PUNCTUAL PLUMBER for similar services, which claims 2002 as its U.S. date of first use, and registered a TECHNICIAN SEAL OF SAFETY mark in both Canada and the United States. It filed for a design version of the PUNCTUAL PLUMBER mark in Canada in 2011, but the application was subsequently abandoned, presumably after being blocked by Clearview's mark. It expanded its franchise network in Canada using this mark, despite, in the words of the Judge, "dropping the ball on the Canadian trademark".

Clearview sued Clockwork, its franchising entity and Canadian franchisees ("Clockwork") for infringement upon seeing Clockwork's "coming soon" advertisements in Calgary. Clockwork then applied to register the TECHNICIAN SEAL OF SAFETY mark, and counterclaimed alleging confusion with a number of marks, copying of its website...