Blockchain firm sues Coinbase for $350M alleging patent infringement
Crypto trade Coinbase has discovered itself in authorized scorching water after being accused by blockchain-based software program agency Veritaseum Capital of infringing on a patent referring to its blockchain know-how — and is now looking for $350 million in damages.
According to a lawsuit filed on Thursday by U.S. legislation agency Brundidge & Stanger within the U.S. District Court docket in Delaware, Veritaseum alleges that Coinbase infringed on its cryptocurrency cost switch know-how patent, often known as the “566 Patent.”
Veritaseum stated the patent revolves round “novel gadgets, techniques and strategies” which allow events to “implement worth switch agreements” with “little or no belief” in one another, alleging Coinbase used this for a lot of of its blockchain infrastructure companies:
“Defendant’s infringing actions embrace however aren’t restricted to its web site […] Coinbase Android cell pockets […] iOS cell pockets […] its Coinbase Cloud, Coinbase Commerce APIs, Question and Transact, Take part, Delegate and Validator software program, Coinbase Pay, Coinbase Pockets and Coinbase Operated Public Validators.”
The legislation agency additionally defined that the patent is relevant with proof-of-stake (PoS) and proof-of-work (PoW) blockchains, which may allow the switch of cryptocurrency funds, buying and selling and staking companies on chains supported by these consensus mechanisms.
Furthering my many warnings of the dangers of poor due diligence, our go well with contains infringement of patent claims that cowl PoS & PoW Ethereum, switch of NFTs & Bitcoin. This was public information since 2015, I have been tweeting publicly for nearly a 12 months. It ought to shock nobody! https://t.co/MjuJSvYBrc
— Reggie Middleton DeFi Patent US11196566, JP6813477 (@ReggieMiddleton) September 22, 2022
Veritaseum justified the $350 million determine by arguing that Coinbase had “gained substantial income by advantage of its infringement” and that Veritaseum Capital “sustained damages as a direct and proximate outcome.”
The attorneys additionally famous that Veritaseum had beforehand despatched a letter to Coinbase in July warning it of its alleged infringement, including:
“Defendant had prior data, ought to have recognized, or a minimum of been willfully blind of the ‘566 Patent. Defendant has been on discover of the ‘566 Patent a minimum of as early as July 3, 2022, if not earlier from different sources or events.”
In July, Vertiaseum’s “Coinbase: Forensic Evaluation & Deep Dive” report recommended that there could also be different “centralized and decentralized digital asset exchanges” that make use of “unlicensed patented IP” from Veritaseum along with Coinbase.
Associated: Coinbase hit with 2 recent lawsuits amid SEC probe
In line with the court docket doc, Patent 566 was awarded to Vertiaseum founder Reginald ‘Reggie’ Middleton and co-inventor Mathew Bogosian by the U.S. Patent and Trademark Workplace on Dec. 7. 2021. Nonetheless, Vertiaseum didn’t point out how lengthy Coinbase had been allegedly utilizing Patent 566 for.
Veritaseum Capital additionally requested a trial by jury within the Delaware-based court docket as its most popular means to resolve the dispute.
Cointelegraph reached out to Coinbase for remark however didn’t get a direct response by the point of publication.
