Case Analysis: Tangle v One For Fun

Intellectual Property infringement and director's liability

Summary

A well-recognised benefit of establishing a limited liability company is that it offers a degree of protection from third party claims to directors (and shareholders) with responsibility for running the company. However, in IP infringement actions, a tactic frequently deployed is to make directors co-defendants on the basis of a joint tortfeasorship claim. Naturally, this begs the question: how much protection does a company structure really offer?

There is a fine balance to be struck between, on the one hand, ensuring that a company's separate legal identity is properly recognised and, on the other, precluding directors from committing tortious acts and avoiding liability by hiding behind the so-called 'corporate veil'.