Personal Liability For Corporate IP Infringement

As you ardently prepare for your quarterly Board meeting, a member of senior management hands you a notice letter alerting your company to the existence of a U.S. patent and suggesting that one of your new products may fall within the scope of one or more claims in this patent. You hand the letter off to a member of your in-house legal department and proceed to the Board room.

This matter does not come up again until you are served with a complaint alleging patent infringement that names your company and you personally as defendants.

As you come to appreciate, corporate officers and directors oftentimes fail to appreciate the concomitant risk to their personal assets resulting from corporate intellectual property (IP) infringement. To assuage these ongoing risks requires steadfast adherence to certain simple guidelines.

Let's start by reciting the basic tenet:

Officers and directors of a corporation may infringe intellectual property rights and thus may be held personally liable for corporate infringement.

Conditions leading to findings of personal liability in patent and trademark infringement cases can be broken down into two main categories:

• Those cases where a plaintiff successfully pierces "the corporate veil;" and
• Those cases where a plaintiff successfully establishes that the corporate officer/director actively and knowingly participated in the furtherance of the infringement.