DeFi group seeks to halt DeFi protocol targeting by patent troll.

DeFi group seeks to halt DeFi protocol targeting by patent troll.

Decentralized Finance Advocacy Group Petitions Patent Office to Review Alleged “Patent Troll” in the Blockchain Industry

The blockchain industry is no stranger to legal disputes, with various companies vying for ownership of patents related to blockchain technology. In recent news, a decentralized finance (DeFi) advocacy group known as the DeFi Education Fund (DEF) has taken a bold step to petition the United States Patent and Trademark Office (USPTO) to review a patent owned by a company it accuses of being a “patent troll.”

In a blog post published on September 11th, DEF revealed that it filed a petition to the Patent Trial and Appeal Board in an attempt to cancel a patent owned by True Return Systems. The patent, granted in 2018, claims a process for “linking off-chain data to a blockchain.” DEF’s legal chief, Amanda Tuminelli, highlighted the deceptive tactics employed by True Return, stating that the company attempted to sell its patent as a non-fungible token (NFT) before resorting to filing lawsuits against DeFi protocols MakerDAO and Compound Finance in October.

Tuminelli outlined True Return’s strategy, claiming that the company intentionally targeted defendants who would not be able to adequately respond to the lawsuit, thereby hoping to obtain a default judgment. Furthermore, she warned that True Return aimed to enforce the court’s ruling against token holders and repeat the process with other protocols that lacked the resources or capacity to challenge them legally.

To defend their position, DEF argued that the technology described in True Return’s patent was not novel at the time of its granting in 2018. They emphasized the existence of “prior art,” pointing to examples like a NASDAQ patent that linked price data off-chain to on-chain transaction history. DEF also highlighted the InterPlanetary File System (IPFS) and decentralized storage platforms such as Sia, Storj, and Swarm.

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It is worth noting that True Return Systems has acknowledged the request for comment from Cointelegraph but has yet to provide an official statement. Meanwhile, DEF launched the petition with the USPTO to safeguard the ability to freely use and develop open-source software within the blockchain industry. Additionally, DEF aims to prevent True Return from pursuing future lawsuits against crypto projects and lend legal support to MakerDAO and Compound Finance in their defense efforts.

The review process initiated by DEF’s petition follows a specific timeline. True Return has three months to respond, and after six months, the USPTO must decide whether to proceed with reviewing the patent. If the review takes place, the USPTO has an additional 12 months to determine whether the patent should be cancelled.

This case highlights the ongoing challenges faced by the blockchain industry regarding patent ownership and potential patent trolls. Patents are vital for innovation, but they also have the potential to stifle progress and restrict the open nature of blockchain technology. The DEF’s petition and their efforts to defend the blockchain community’s ability to use open-source software represent a crucial step in protecting the industry’s interests.

It is essential for the blockchain community to stay vigilant against patent trolls and actively participate in legal battles when necessary to ensure the continued growth and innovation within the industry. The DEF’s action serves as a reminder that protecting the decentralized and open nature of blockchain technology requires a united front against those who seek to exploit the system for personal gain.

In conclusion, the blockchain industry continues to face legal challenges, with companies like True Return Systems being accused of being “patent trolls.” The DEF’s petition to the USPTO to review True Return’s patent demonstrates the need for active defense against those looking to profit from patent lawsuits. It also highlights the importance of maintaining an open and decentralized ecosystem for innovation within the blockchain industry. By staying informed and banding together, the blockchain community can protect its interests and continue to drive forward the technological revolution that blockchain represents.

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