Which Country is Suitable for Legal Protection in Game Automation Software Development

After reading today's Gamasutra article about Jagex vs Impulse Software, and considering my own academic activities, I suddenly became very concerned with my legal protection.

As such I would like to know, in which country should I incorporate to afford myself the greatest personal legal protection against lawsuits like that? Relevant areas include lawsuits to recover monetary damages to the game/community due to automated in-game activities, violation of intellectual property laws and violation of website/game/community terms of service.

To be clear, I am only academically pursuing this matter as a way to get easy feedback in my exploration of AI, computer vision and robotics using the game environment as a real world proxy. I'm specifically not selling or making the bots/research public, but I would like to take proactive measures to protect myself rather than have the rest of my life ruined due to legal fees, even if they're unfounded, as I can't afford to defend myself.

I chose RuneScape as a model for pursuing my research simply because the game actions are elementary and the game models are very simple compared to most other games, with the added bonus of it being a huge environment for modeling and thousands of players/NPCs for interaction. Even if I stopped developing on RuneScape this question would be relevant to most, if not all, other games.

I'm mainly interested in just personal protection because, as I said before, I'm not going to be selling the technology or publicizing it in any way. If I have to set up a shell company to take the legal fall, then that's perfectly fine as long as I'm not personally affected or liable.

In the US, it's actually better to incorporate within the country for legitimacy issues. Foreign companies just don't seem as credible as those within the US.

For that matter, I'd recommend forming a Nevada Limited Liability Company through http://www.nchinc.com/home.htm where you are shielded from any lawsuit claiming up to $100,000 in damages from you. Nevada corporations are the safest corporations in the country, and if you have ANY question about the nature of your business and moving it overseas, then a Nevada LLC is for you.

I had formed a Nevada LLC through Nevada Corporate Headquarters, and it was a great feature to my business. As I ran an investment club, I was able to offer my investors up to $100k in protection against lawsuits. And that doesn't come cheap in any other state for a start-up.

Asia and certain offshore locations which do not disclose the names of their stakeholders is the way to go.