Bauer Hockey Corp v Sport Maska Inc – 2014 FCA 158

This was an appeal from the trial judge’s initial order striking aggravated and punitive damages from Bauer’s Statement of Claim in the context of trade-mark infringement and subsequent order dismissing Bauer’s motion for leave to amend its Statement of Claim to reintroduce those damages. [1-3]

Appeal from the initial order is dismissed. [27] Appeal from the subsequent order allowed in part, in relation to punitive damages. [36]

Addressing punitive damages, the Court confirmed that such damages are available in trade-mark infringement cases. [22] However, the Court went on to state that “[a]llegations of willful and knowing infringement are alone insufficient to support a claim to punitive damages. Intellectual property infringement cases, even in voluntary infringement circumstances, will not necessarily attract punitive damages.” [25] The Court noted that punitive damages “should only be awarded where the evidence shows that there has been high-handed, malicious, arbitrary or highly reprehensible conduct that departs to a marked degree from the ordinary standards of decent behaviour”, and emphasized that this is a “high threshold”. [26]

Regarding the trial judge’s initial order, the Court noted that Bauer’s Statement of Claim contained “little factual elements” supporting punitive damages, and that mere assertion of knowing infringement is not sufficient. [25-27] As such, the Court dismissed the appeal from the initial order. [25]

Addressing the trial judge’s subsequent order, the Court found that the trial judge erred in law in concluding that punitive damages could be awarded only in connection with litigation misconduct. [28] The amendments Bauer sought to make to its Statement of Claim contained a number of additional allegations regarding Sport Maska’s conduct. The Court held that based on these allegations, Bauer’s claim for punitive damages could not be said to have no reasonable prospect of success. [33-35] As such, the Court allowed the appeal from the subsequent order in part, in relation to punitive damages. [36]

Regarding aggravated damages, the Court remained unconvinced that there was sufficient basis in Bauer’s pleadings for aggravated damages, and dismissed the appeal from both the initial and subsequent orders in relation to aggravated damages. [23-24]