Domestic and Global Contexts
Elgar Law and Entrepreneurship series
Edited by Lynda J. Oswald and Marisa Anne Pagnattaro
Chapter 1: The individual liability of corporate officers under patent and copyright law
The law encourages economic activity by limiting the personal liability of corporate owners through the corporate form. Not surprisingly, corporate officers are also concerned with personal liability. Unlike owners, officers do not participate to the full extent in the success of the corporation; correspondingly, they have little interest in assuming the risks. Imposition of officer liability should be fair, predictable, and further (rather than frustrate) important societal goals. Otherwise, corporate officers may be overcautious, make inefficient decisions, and forego economic activity that the corporate form was intended to encourage. Patent and copyright law share certain fundamental characteristics: both encourage invention and creation but also provide for the public interest. In addition, the infringement of a patent or a copyright is a tort. The critical implication of this characterization is that general principles of tort and agency law apply to such infringement – a point that has important ramifications for infringement rules and individual liability. However, corporate officer liability doctrines under both the Patent Act and Copyright Act diverge markedly from traditional corporate, agency, and tort doctrines. This chapter examines traditional corporate, agency, and tort law concepts that impose liability upon a corporate officer for his or her own wrongful acts, and agency rules of respondeat superior that impute that individual’s actions to the corporation. In the patent infringement arena, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) has deviated from traditional doctrine and inappropriately imposed liability upon corporate officers through a distorted application of piercing doctrine.