When Legal Fictions Collide: The Primacy (Or Otherwise) of the Separate Entity Principle of Corporate Law in Intellectual Property Cases

Abstract

Both “intellectual property” and “the corporation” can be and have been characterized as convenient legal fictions. Both also continue to be increasingly instrumental realities in the commercial world. This paper examines what happens when these two fictions collide - the issue of directors’ and other officers’ liability for intellectual property infringements by companies. Courts and commentators alike have generally advocated the primacy of the separate entity principle of corporate law in order to safeguard commercial enterprise and adventure. However, if intellectual property is viewed in accordance with its underlying justification, as a form of incentive necessary to promote new and useful innovations and creations, then any avoidance of responsibility by directors potentially undermines that incentive. In this event, the question must be posed as to whether the role and place of intellectual property in society warrants (or, indeed, receives) special treatment in cases involving companies infringing intellectual property rights.