Sole director and shareholder jointly liable for trade mark infringement and passing off

26th April 2016

Sole director and shareholder jointly liable for trade mark infringement and passing off

If you operate through a limited liability company it is tempting to think that you cannot be held responsible for its actions. Generally, your liability as a shareholder of a company is limited to the nominal value of your shares (together with any share premium you may have agreed to pay). In addition, if you are a director of a company, who has acted properly, then you should not be responsible for the actions of the company.

However, the recent case of Grenade (UK) Limited -v- Grenade Energy Limited & Anr is a reminder that even if you operate through a limited company you may still be personally liable for its actions.

Most business owners will not be surprised to hear that operating through a company will not protect them from criminal liability nor that there are certain Acts of Parliament which provide for the personal liability of company directors (for example, the Data Protection Act 1998). However, the news that a sole director and shareholder has been held jointly responsible for his company’s trade mark infringement and passing off may come as a surprise.

The defendant company was sued for trade mark infringement and passing off. It was found that the defendant company had no reasonable prospect of defending those allegations. The claimant also claimed that the sole director and shareholder of the defendant company should be jointly responsible for the company’s actions because he had actively co-operated with the company to bring about the infringements and he intended that that co-operation would bring about the infringements.

The court found that, in the case of a sole director and shareholder that there was a presumption that all of the acts of the company were done at his instigation. In effect, a sole director and shareholder have to show why the infringements were not initiated and controlled by him. In this case, he did not do so and therefore was held liable to the claimant.

If you need any advice on trademarks or any business dispute contact Victoria Spellman on 01473 298181 or email victoria.spellman@gotelee.co.uk

Partner
Practice Areas
Business Law
Commercial Dispute Resolution
Dispute Resolution
Blog Posts

Hundreds of cases dropped over evidence disclosure failings

30/01/2018

The right to a fair trial is one of the fundamental principles of a…

Read More
Upcoming Events

Inheritance Tax and Wills Planning Seminar

07/02/2018

What the seminar will cover... Inheritance Tax: - When does it apply; what are…

Read More
News Posts

Former Manchester City football coach found guilty of sexually abusing young players

14/02/2018

A former youth football coach who worked for Manchester City and Crewe Alexandra has…

Read More

Testimonials

"The friendliness of Sally Pryke making me feel at ease during the whole process"

- BV

"Always kept me informed of the progress"

- CP

"Helen Stuart was fantastic and I couldn't have asked for a better solicitor!"

- KM

"Everything was dealt with in a compassionate and friendly manner"

- AW

"Pat's service is always extremely efficient and very approachable"

- AO

"Relieved that I could leave you to deal with the legal aspect of my late husbands estate"

- DG

"We cannot thank you enough for all your hard work and sticking with us. You have been amazing and showed a lot of patience when dealing with this case and all for no reward for yourself, thank you."

- Dean Kentfield

"Approachable, very efficient, always willing to take my calls and update me."

- SH

"We were very pleased to have Jade as our solicitor, the service was excellent and we felt kept in the loop which minimised stress"

- CT

"I have used Tracey Hammond at Gotelee on a number of occasions and in my opinion, she is simply the most efficient conveyancing solicitor I have ever worked with. From the outset, she took the time to understand my specific business requirements and to date, she has exceeded all of my expectations."

- Dale Fiddy - Portobello Developments Ltd

Please select preferred method of contact

* We will only contact you by telephone if you select this as primary form of contact.