Final week, the DeFi Schooling Fund (DEF) swung into motion, submitting a petition with the U.S. Patent and Trademark Workplace. Considerably, this transfer comes after a lawsuit in opposition to MakerDAO and Compound Protocol by True Return Programs LLC. The Connecticut-based tech firm claims these decentralized autonomous organizations (DAOs) knowingly infringed on their 2018 patent, threatening the very basis of open-source innovation within the crypto world.
The Patent in Query
True Return owns a patent granted in 2018, claiming an innovation for transferring off-chain information by oracles. Oracles are third-party providers that liaise between the blockchain world and real-world information. Furthermore, True Return asserts it has the unique proper to prosecute for infringement, as outlined in its complaints in opposition to MakerDAO and Compound Protocol.
Nonetheless, the DeFi Schooling Fund argues that the patent is much from novel. The group cites a Nasdaq patent filed greater than a 12 months earlier than True Return’s software. Amanda Tuminelli, DEF’s Chief Authorized Officer, states,
“The Nasdaq patent intently resembles True Return’s, specializing in bringing value feed information on-chain. Therefore, the patent ought to by no means have been granted.”
Authorized Tug-of-Battle and the Implications
What provides complexity to the state of affairs is the decentralized nature of the defendants—DAOs, or decentralized autonomous organizations, which aren’t managed by a single entity. Consequently, no person confirmed up in court docket to defend MakerDAO and Compound Protocol, making it simple for True Return to hunt a default judgment.
As of July, MakerDAO has enlisted the authorized providers of Perkins Coie, whereas Compound Labs is in search of to intervene within the case, represented by Morrison Cohen LLP. Moreover, DEF has initiated an Inter Partes Evaluation (IPR) course of to reveal that “prior artwork” invalidates the True Return patent. Within the petition, DEF cites the Nasdaq patent and different applied sciences like IPFS and SIA, circulated effectively earlier than the True Return patent.
The DeFi Schooling Fund is standing up in opposition to what it labels ‘patent trolling,’ desiring to safeguard the cryptocurrency business’s dedication to open-source software program improvement. By doing so, DEF hopes to problem True Return Programs and set a precedent that might deter future infringement claims in opposition to decentralized entities. It’s a posh authorized battle with excessive stakes, one that might considerably affect the way forward for innovation within the cryptocurrency realm.
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