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Stupid question but, if that's true, then wouldnt that destroy the credit of the people who setup shell companies to begin with?

That is unless they are all setup illegally I guess?

It is called "piercing the veil" - go after the assets of the individuals running a shell company to limit their liability. It is possible but not easy to do if they structure and operate the "company" properly. You would spend a lot of money trying to get them to pay...

Furthermore, if you do it in a series of shells in different jurisdictions (think countries and continents, not just states), it becomes effectively impossible to pierce - it can cost millions or even tens of millions to pierce a series of 50 companies, even though setting them up and maintaining them can be done for as little as $100K.

But doesn't the shell company have to OWN the IP/patent in order to sue? If they lose and can't pay, then transfer the patent to the defendant. Guess it still doesn't completely stop the trolls... Definitely need some bonding.

If they lose the case, then the IP/patent is likely worthless.

Not necessarily. They can have a "we're allowed to sue on your behalf" agreement with the owner. Also, the patent owner could sell it to them for $5K, wait a couple of years, claim that the value has ballooned to $2T, and let them sue.

(Oh, patent owner also owns troll, but you can't know that without spending a few hundred K$)

And if they lose, the patent apparently is worthless, so not much help there.

I assumed that something similar to the RightHaven copyright case might stick... since the troll company doesn't/wouldn't own the IP then they wouldn't have standing to sue...



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