QUESTION

Can I be sued personally for my company?

Asked on Jun 02nd, 2011 on Patents - California
More details to this question:
My company was manufacturing a product and found out later that it might violate someone's patent. If the patent holder sues the company, can they also sue personally the owners (if a closely held "C" corp) or the executives, or would the lawsuit and consequences be totally against the company?
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2 ANSWERS

Business Litigation Attorney serving Newport Beach, CA
Partner at Shalchi Burch LLP
2 Awards
They can sue the shareholders, directors, and/or officers although they must demonstrate the individuals knowingly and willfully infringed the patent at issue. Alternatively, they can get the shareholders as an alter ego of the corporation if corporate formalities were not adhered to and there is some manifest injustice or inequitable result.
Answered on Jun 07th, 2011 at 2:40 PM

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Its possible but unlikely so long as all activity was done by the company and you did not anything personally by yourself. However, if for example you commingled funds between you and your company and say did not operate it as a company (e.g. no meetings, incorrect corporate paperwork etc...) then its possible a court could "pierce the corporate veil" which in essence destroys the corporate liability protection and opens you up personally. With anything dealing patent litigation, you should definitely consult with a patent attorney who is knowledgeable with patent litigation to help advise you on your specific case.
Answered on Jun 06th, 2011 at 3:52 PM

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