Lynda J. Oswald

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 Act1 and Copyright Act2 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

Unexpected Hazards of a Specialized Patent Court: Lessons from Joint Infringement Doctrine

There are a number of reasons why a legislature might create a specialized court to address the technical issues raised by patent law, including fostering uniformity in outcomes, coherent evolution of patent law doctrine and policy, and development of judicial expertise and competency. The US Congress created the US Court of Appeals for the Federal Circuit in 1982 with the goal of achieving just these objectives. However, the creation of this specialized court has had its downside as well. Because the Federal Circuit has limited jurisdiction and hears a narrow range of cases, it is much less likely to look at traditional common law doctrines, such as tort and agency law, across numerous dimensions, as would the regular federal courts of appeal with broader jurisdiction. In particular, because the Federal Circuit is not applying traditional legal principles in a variety of settings, its decisions can contort those principles to fit the unique and complex patent law issues before the court. The result is that the fundamental doctrines underlying those principles can become distorted and ultimately lost and patent law can become distanced from traditional legal doctrine in a manner never contemplated by the legislature. Joint patent infringement doctrine illustrates this phenomenon. The US Patent Act does not address the liability of multiple parties whose collective action is necessary to support direct infringement of a multi‐step process or method patent claim. The federal courts have recognized, however, that allowing parties to evade infringement liability merely by divvying up their actions among multiple actors can be grossly unfair to patent rights holders. Thus, the federal courts have stepped into the statutory void, devising a common law derivative of direct infringement liability for such instances: joint infringement. The courts’ formulation of this common law doctrine has morphed over time, from an agency law standard to a tort‐like standard of cooperation or connection, and back again to the current standard of control or direction, which draws heavily upon the original agency law standard. The theoretical underpinnings of the Federal Circuit’s theories are not pure, however, and rest upon perverse or inaccurate applications of traditional tort and agency doctrines. Joint infringement thus displays a serious disconnect between the manner in which it is applied by the court and its theoretical bases. Returning explicitly and openly to the foundations of the tort and agency law doctrines that purportedly underlie joint infringement doctrine would enable the Federal Circuit to articulate liability rules that are more principled, more grounded in the traditional legal doctrine, and more consistent with the overall patent scheme. The lessons that can be drawn from the joint infringement scenario give important insight into how a specialized patent court should structure its decision‐making process to ensure that its patent law decisions are consistent with the underlying legal doctrine of the jurisdiction in which it operates.