[DanBC]

There's a downside to the UK system.

You have to pay the costs, even if you win, if:

i) You're offered an out of court settlement and

ii) You reject it and

iii) the settlement is more than the damages you are awarded by the court

This is to make sure that people try to settle things before going to court.

And I'm not sure how it would work for a non-practising entity. A company that has no assets apart from the patent that they're suing for would have no money to pay fees if they lose.

[nknighthb]

Undercapitalization in the absence of liability insurance could be grounds for piercing the corporate veil.

[tptacek]

It can? Has that actually happened (in the UK or US), or been argued, ever? Can you cite a source?

[nknighthb]

Vuylsteke v. Broan, Minton v. Cavaney, State v. Weinschenk, Anderson v. Abbott.

[tptacek]

Sorry, I was imprecise. I understand that it is possible to collect damages from controlling shareholders of corporations; for instance, in any tort case; in several states, unpaid wages also incur liability on company owners, as they did in Vuylsteke. I was asking specifically about your liability insurance argument.

[nknighthb]

You mean that insurance can count in determining adequate capitalization?

The cases I can find that are most on point is Walkovszky v. Carlton, where a claim of underinsurance was directly at issue (unsuccessful because the insurance that was carried met an explicit statutory requirement) and Autrey v. 22 Texas Services Inc. (on a summary judgement motion finding there are facts in dispute, so not squarely ruled on).

A couple of relevant papers that discuss insurance throughout:

http://scholarship.kentlaw.iit.edu/cgi/viewcontent.cgi?artic...

http://www.law.emory.edu/fileadmin/journals/elj/56/5/Millon....