Is a Director Liable for an IP Infringement by the Company?

The threshold is quite high under Dutch law: a director's liability is only assumed if the director can be seriously and personally blamed for infringing company acts. Yet this risk can be helpful to the IP owner who wants an infringement to be ceased. In case of clear infringements, especially counterfeit matters, directors face personal liability. If the infringement is less obvious, liability for future damage may still be assumed as of the day the director receives a letter of summons. 

An example of the latter is the Cepia/X case that was decided by the Court of Appeal of The Hague, the Netherlands. Entrepreneur X purchased a number of toy hamsters outside the regular circuit, paying in cash. This often indicates counterfeiting - and that also appeared in this case: the company infringed Cepia's trademark, Registered Community Design (RCD) and copyright. After a summons from Cepia and X's subsequent check (yes: indeed infringement), X should have ensured that a careful statement was made of numbers, origin and customer details. It later turned out that X had kept one large customer out of the picture ("forgot that there was another one"). So he had deliberately reported incomplete infringement data, and moreover it took him three months to do so. The Court of Appeal of The Hague found the director personally liable for Cepia's damage arisen now that Cepia was deprived of the possibility to take action against further marketing of the counterfeit hamsters (downstream). So this damage due to a deliberate incorrect statement was blamed personally and seriously on the director, and an infringement injunction was also personally imposed on X. 

In this case director X deliberately made a mess. In other matters it needs to be assessed on a case-by-case basis whether the director can be seriously and personally blamed. Especially in case of blatant infringements the IP owner has additional leverage. And that may be rather helpful if the infringing company suddenly becomes insolvent. Recognize the situation?

Do you have a question relating to IP enforcement in the European Union / Benelux / the Netherlands? I'm happy to provide guidance.