Owners or those otherwise primarily responsible for the management of a corporation or limited liability company may be personally liable for copyright infringement

In an interesting order recently issued by the New Hampshire Federal District Court, the court reminded us that the owners or business managers of a legal entity may be personally liable for copyright infringement.  Although the court’s order was in response to the plaintiff’s request to amend its complaint to add several individuals personally as defendants, the court took the time to address the issue of whether individuals could be personally, vicariously liable for copyright infringement in an effort to determine whether the plaintiff should be allowed to amend their complaint or whether the amendment would be futile.  The judge sets out clearly that vicarious liability for copyright infringement is alive and well in this district.  Since the proposed additional defendants had both the right and ability to supervise the infringing activities and an obvious and direct financial interest in the exploitation of the copyrighted materials, the proposed amended complaint set forth a plausible claim for vicarious (copyright) infringement.

The moral of the story is that a legal entity such as a corporation or limited liability company cannot be expected to serve as a shield for preventing against an accusation that an individual had the ability to personally control (and was ultimately financially benefiting from) infringing activity such as copyright infringement and thus may be vicariously liable.  Similar cases exist for patent infringement is well.

See Design Basics v. R.J. Moreau Communities 15-cv-309-LM 3/29/16