Patent Law

Weschler v. Macke (Fed. Cir. 2007)

Anthony O’Rourke was the owner and only employee of Macke Int’l. Weschler successfully sued Macke and its owner O’Rourke for patent infringement.  O’Rourke appeals his personal liability.

Rule on personal liability for inducing a corporate infringement:

“Unless the corporate structure is a sham, … personal liability for inducement must be supported by personal culpability. Hoover Group, 84 F.3d 1408 (Fed. Cir. 1996). This requires the officer to have possessed a specific intent to "aid and abet" the infringement. Water Techs, 850 F.2d 660(Fed. Cir. 1998).”

A director’s action may lead to a finding of willful infringement against the company without creating personal liability. “For example, a corporate officer could negligently believe that a patent was invalid and/or not infringed. This might support a finding of willful infringement by the corporation, see Biotec Biologische, 249 F.3d 1341 (Fed. Cir. 2001), but not a finding of personal liability for the officer. Accordingly, the district court's statement that finding Macke liable for willful infringement while exonerating O'Rourke would be "inconsistent and unreasonable" because Macke could not act independently of O'Rourke is clearly incorrect.”

Finally, the court refused to pierce the corporate veil because Weschler failed to prove that Macke’s setup was “just a sham.” (holding that the lack of patent infringement insurance does not imply a sham corporation).

Notes:

• Post-History: Macke only had $10,000 to pay the $600,000 damages. Weschler filed an involuntary bankruptcy proceeding. In a tough twist, the bankruptcy court then forced Weschler to pay Macke’s attorney fees after failing to settle. [LINK]
• Late Homework: This is an important precedential case from 2007 that I missed in the shuffle. (As an excuse, It issued on the same day that we started our trek from Boston to Missouri).
• See Sheppard Mullin Blog