Own-it | Intellectual Property Know-How for Creative Businesses

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Personal Liability for Company’s Infringements

Published 08.06.11 at 15:09

A company is an entirely separate entity to those who own or run it - a company can own property in its own right, can enter into contracts in its own right and can be found liable of wrong doing in its own right.  This is often a comfort to the individuals behind the company since it means that their personal assets such as bank accounts, family home etc, cannot be taken to settle the debts of the company.

However, in exceptional circumstances, the individuals behind the company can be called on to make good the company's wrongs.  One such case is intellectual property infringement where, in certain cases, a director (or even someone who is not a director but is responsible for running the business) can be held personally liable for infringements committed by the company subject to certain principles:

  • A director who can be shown to be the controlling mind behind the company and to have directed or authorised the infringements can be held personally liable for the company's infringements;
  • A director is not personally liable purely by virtue of being a director even if they are the sole director;
  • Thus, if a director has put systems in place to avoid infringements but those systems have failed or not been used correctly by other personnel, the director will not be liable;
  • Conversely, a person does not need to be a director in order to be personally liable - anyone who has controlled, directed or authorised the company's infringements can be on the hook.

This Article was written by Hayley Devlin, a solicitor specialising in intellectual property and brand protection at Hamlins LLP, who represented the Defendants in this case. For more details please contact Hayley on 020 7355 6048 or at hdevlin@hamlins.co.uk.'

 

Photograph (some rights reserved) by WisconsinKow

 

Please note that this article discusses the legal position in the UK at the time of publication. It provides general information only but is not to be regarded as legal advice. You must take advice from a specialist lawyer in relation to your specific circumstances. Further, you should seek additional legal advice when dealing with parties based in other parts of the world or works originating from other parts of the world as the legal position may vary.

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