A director of a company has been found personally liable for a patent infringement by a UK Court on the grounds that he had advised a client of his company to import recordable CDs which subsequently infringed PhillipsÂ patent.
The dispute arose after Princo Digital Disc had its licence withdrawn by Philips yet continued toÂ import the Discs without PhilipsÂ consent, consequently infringing its patent rights.
As a result, Philips successfully sued Princo (which lost its argument that the Patent wasÂ invalid) and furthermore sued Arthur Kuo, Managing Director of Princo submitting that he should beÂ found personally liable for the infringement.
Kuo, on behalf of Princo undertook to indemnify its client Aventi, in the event that it facedÂ legal costs as a result of the infringement.
The Judge, Justice Pumphrey, stated that the test as to whether Kuo should be found personallyÂ liable, was whether he Âwas sufficiently involved in the companyÂs tortsÂ. The Judge found that heÂ should not be found automatically liable because he was company director, however in these
circumstances Justice Pumphrey wrote:
ÂHe was the business manager of the company. He was responsible for the cultivation of Aventi asÂ a customer, and it was his decision to give the indemnityÂ I have no doubt that the indemnity wasÂ given to encourage Aventi to remain a customer and so to continue to infringe in the UnitedÂ KingdomÂ.
The key factor in deciding that Kuo was personally liable was the encouragement that he had givenÂ to Aventi to continue importing the infringing articles, and his independent authority in makingÂ decision to the company made him sufficiently involved in the infringement and should therefore beÂ jointly liable.