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Patent Infringement
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   Does an LLC protect against Patent Infringement?
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   Author  Topic: Does an LLC protect against Patent Infringement?  (Read 2123 times)
lemonbar
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Does an LLC protect against Patent Infringement?
« on: Oct 3rd, 2007, 9:49pm »
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Does an LLC protect against Patent Infringement or can they break through it and get to the induvidual possessions of a 1 person LLC?
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patent_type
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Re: Does an LLC protect against Patent Infringemen
« Reply #1 on: Oct 4th, 2007, 6:52am »
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Depends on the state law, but LLCs are generally set up to protect the personal property of the principals.  That corporate veil, however, can be pierced.  Too many fact variation possibilities to get a good answer from a fake interent lawyer--at least from this fake internet lawyer.
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Isaac
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Re: Does an LLC protect against Patent Infringemen
« Reply #2 on: Oct 4th, 2007, 8:52am »
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In many jurisdictions, the liablity shield is relatively weak when it comes to protection from tort liability resulting from a business owner's own actions.   In particular, I would generally expect the corporate veil to be pierced in the case where the infringement were found to be willful.
 
 
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Isaac
lemonbar
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Re: Does an LLC protect against Patent Infringemen
« Reply #3 on: Oct 4th, 2007, 11:10am »
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Lets say the case is a 1 person LLC and for worst case scenario that person created a product after another persons product that is US patent pending but the product ended up infringing on their patent ideas.  
 
Not sure to what that person would have to do in this case to be willful so I ask this:
 
If the person that created the new product stopped as soon as they received a "infringment" letter OR the other products patent was finally granted then is that considered infringement.
 
Can you give examples of willful infringement that would force them to peirce the veil of the LLC?  
 
(joke: which by the way said person will never concede too)
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JSonnabend
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Re: Does an LLC protect against Patent Infringemen
« Reply #4 on: Oct 4th, 2007, 11:27am »
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I don't agree with Isaac or the other poster.  Generally, if you follow business entity formalities, the LLC will be difficult to pierce.  This holds true for torts as well as other causes of action.  (If it didn't hold true for torts, the corporate shield would be pretty worthless, no?)
 
- Jeff
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SonnabendLaw
Intellectual Property and Technology Law
Brooklyn, USA
718-832-8810
JSonnabend@SonnabendLaw.com
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