Comment by cookiecaper
10 years ago
This is a cute fantasy but it's wrong on multiple fronts. First, incorporation does not protect directors from tort liability. If you can't invoke respondeat superior, it's somewhat likely that you'll be personally liable for any tort claims. Your LLC won't shield you, and you'll be liable for infringement damages.
Second, corporations have teams of lawyers whose whole job is to find marginal infringements of their IP and pursue said infringers. It doesn't matter that it's going to cost the company more money than it's worth in your particular instance. What matters is that the company establishes a reputation for mercilessly pursuing infringers, because such a reputation deters further infringement, and because it precludes the possibility of someone claiming that the work was abandoned or no longer of interest (which doesn't negate copyright infringement claims, but could limit damages; it potentially could negate trademark claims).
Do not fool yourself into believing that your small-time operation won't raise the attention of big corporate lawyers. For the extra cherry on top, note that if you do raise the notice of big corporate lawyers, you'll be forced to comply no matter how wrong they are, since they'll pursue every strategy to make the legal fight as long and expensive as humanly possible and you'll eventually have to settle unless you already have $5 million+ sitting around with your lawyers' name on it.
Uzi Nissan, rightful owner of nissan.com, spent 9 years and approximately 3 million dollars defending against Nissan's attempt to wrest his domain from him, and they're still trying to get at him by filing frivolous trademarks. [0]
That is the MO of big corporate law. They absolutely can and will use their larger position to bully you, and you don't really have the option to take the dispute to court if you aren't pulling in tens of millions in annual revenue.
The Walt Disney Company famously sent a C&D to a day care in Florida [1] for having unlicensed representations of their characters painted on the walls.
IANAL and everything I said is probably wrong.
I agree with everything you said (and have made the same sort of point on many threads about the strategic imperative for corporations to pick such facially unfair fights). But what's sauce for the goose is sauce for the gander - it's not that hard to obscure the beneficial ownership of a company, and setting up an SPV whose only purpose is to be towed out to sea and sunk (so to speak) is a well-established corporate strategy. Yes, it's a risky strategy, but only by employing such strategies can people respond to the inequitable business practices of large corporations.
In the case of mr Nissan, if he wins doesn't he get his legal costs back? (I know it's a huge hassle anyway, but better than nothing)
He addressed this at the end of the posted timeline. He was awarded $58k in legal fees, which he calls "less than 2%" of the total cost of the defense (this is where the $3 million cost estimate is calculated from, which is aligned with the expense of similar cases that I'm familiar with).