Although corporate officials often underestimate the degree of liability that could befall them when performing corporate duties and responsibilities, there are certain situations where an officer can be personally liable for actions that cause the corporation to infringe the property rights of other parties. A corporate officer acting within official capacity is generally shielded from personal liability by the corporation, which protects officers’ and directors’ personal assets from awards and judgments decided against the corporation. However, personal liability against corporate officials can be established by “piercing the corporate veil.” To pierce the corporate veil, a plaintiff must show a number of factors, including that the corporation was used for fraudulent or illegal purposes, among others.
When it comes to trademark infringements by a corporation, a corporate officer can be personally liable if he was a moving, active, conscious force behind the infringement. If the party suing achieves to show this in court, then the corporate officer will most likely be personally liable. It is also important to note that a corporate officer’s acts can render him individually liable for trademark infringement by his corporation regardless of whether he knows that his acts will result in an infringement. The party suing the corporate officer only needs to show she had legal interests in the trademark that were protected and demonstrate that the infringing party’s use of it is likely to confuse consumers as to the source of the product.
Additionally, in cases where there is a potential trademark infringement between two different classes of products, liability could be found if there is a likelihood of confusion between the trademarks. For example, if a company selling bicycles uses the same name as that of an already existing brand of scooters, the bicycle company would be liable if the court finds a likelihood of confusion exists. This finding depends on a series of tests.
One of the tests involves the proximity between these products in assessing the likelihood of confusion. The two elements considered for the likelihood of confusion are: (1) “market proximity,” which is an inquiry as to relatedness of the two products are in their areas of commerce; and (2) “geographic proximity,” which requires a look to the geographic separation of the products. Also, in determining the product proximity, the court will look at the class of customers to whom the goods are sold, the manner in which the products are advertised, and the channels through which the goods are sold. In lawsuits where a close proximity between the products have been found, corporate officers have been held personally liable for the judgments.
If you think your company may be in danger of trademark infringement, or would like to ensure that you and your company are protected from trademark infringement liability, and would like additional information, schedule a consultation with the experienced attorneys at EPGDLaw today, located in beautiful Coral Gables. Call us at (786) 837-6787 or e-mail us to schedule a consultation.
*Disclaimer: This blog post is not intended to be legal advise. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*