Court confirms that directors may be held liable for company IP breaches

Denmark

In Artexyl SARL v Geographical Norway ApS (Case V-59-12 et al, October 28 2013), the Maritime and Commercial Court has held that the sole proprietor and managing director of the defendant company incurred a separate liability for the violations committed by the company.

Artexyl SARL owns various trademarks for clothing. Geographical Norway ApS, of which Nikolaj Weir was a shareholder and managing director, had acted as Artexyl's distributor in Denmark. The distributorship ended in December 2011.

In 2011 Topgarments Ltd China (Artexyl's normal manufacturer in China) produced 12,920 coats for Artexyl. However, Artexyl cancelled the order due to delay and informed Topgarments that under no circumstances could it allow the sale of the coats in Europe.

Despite this, Topgarments sold the coats to Geographical Norway. When Artexyl discovered the sale, it obtained an interim injunction and requested the preservation of evidence.

The Maritime and Commercial Court ruled that the injunction and preservation of evidence request were legal, and that Geographical Norway had violated Artexyl's trademark rights.

Artexyl claimed Dkr500,000 as compensation and damages. The court ascertained that a profit of between Dkr50 and Dkr75 had been made on each coat - the total profit consequently equalled at least Dkr650,000. As Artexyl had limited its claims to Dkr500,000, the court complied with this claim without further discussion.

Further, the courts ascertained that Weir had been sole proprietor and managing director of the defendant company, and had carried out and been responsible for those acts detailed in the court action. Consequently, the court found that Weir had incurred a separate liability for the violations and was responsible to pay jointly and severally together with the defendant company.

The decision confirms the new trend in Denmark that natural persons may be held liable for IP violations performed by companies, provided that the person was the sole owner, and in reality acted as manager and was responsible for the acts performed by the company.

Mads Marstrand-Jørgensen, MAQS Law Firm, Copenhagen

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