Re: personal liability for copyright infringement

On 10/9/97, Mark Lemley <mlemley[_at_]mail.law.utexas.edu> wrote:
>
> Is there any set of circumstances under which a corporate officer can
> be held personally liable for acts of copyright infringement by the
> corporation, *without* piercing the corporate veil?

I think the answer is yes. An act done by the officer him/her self that is infringing may well also be an act of copyright infringement by the corporation because it was done in the officer's "official" capacity. However, the fact that it was done in an official capacity, and is therefore _also_ a corporate act, does not by itself shield the officer from individual liability for his/her own conduct. What the corporate shield does do is shield owners and officers from derivative liability for the acts and omissions of their agents/employees, and for liability which arises without "fault" as a matter of law, e.g. as a matter of contract.

Take a look at Softel, Inc. v. Dragon Medical, et al., No. 95-9151 (2d Cir., July 9, 1997), which discusses the issue. Holding that the President of Dragon Medical was not jointly liable, the court notes that Softel failed to prove contributory infringement because there was no evidence that the President "authorized the infringing use," citing _Sony_; and failed to prove vicarious liability because there was no evidence that the President had a "right and ability to supervise [that] coalesce[d] with an obvious and direct financial interest in the exploitation of the copyrighted materials," citing _Shapiro, Bernstein & Co. v. H.L. Green Co._, 316 F2d 304 (2d Cir., 1963). The case doesn't discuss direct infringement, but I can't see why, if the officer of the company himself made the unauthorized copies, that he couldn't be held liable for direct infringement.

As Softel indicates, though, the courts aren't particularly friendly to claims against officers acting in an official capacity, and as a practical matter the corporation will usuallly indemnify the officer and pay any award rather than alienate a potentially disastrous witness.

John Noble
<jnoble[_at_]dgsys.com> Received on Fri Oct 10 1997 - 15:51:53 GMT