Crypto trade Coinbase has discovered itself in authorized scorching water after being accused by blockchain-based software program firm Veritaseum Capital of infringing on a patent regarding its blockchain know-how — and is now in search of $350 million in damages.
According to a lawsuit filed on Thursday by U.S. regulation firm Brundidge & Stanger within the U.S. District Court 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 devices, systems and methods” which allow events to “enforce value transfer agreements” with “little or no trust” in one another, alleging Coinbase used this for a lot of its blockchain infrastructure companies:
“Defendant’s infringing activities include but are not limited to its website […] Coinbase Android mobile wallet […] iOS mobile wallet […] its Coinbase Cloud, Coinbase Commerce APIs, Query and Transact, Participate, Delegate and Validator software, Coinbase Pay, Coinbase Wallet and Coinbase Operated Public Validators.”
The regulation firm 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 swimsuit consists of infringement of patent claims that cowl PoS & PoW Ethereum, switch of NFTs & Bitcoin. This was public information since 2015, I’ve been tweeting publicly for nearly a yr. 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 profits by virtue of its infringement” and that Veritaseum Capital “sustained damages as a direct and proximate result.”
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 knowledge, should have known, or at least been willfully blind of the ‘566 Patent. Defendant has been on notice of the ‘566 Patent at least as early as July 3, 2022, if not earlier from other sources or parties.”
In July, Vertiaseum’s “Coinbase: Forensic Analysis & Deep Dive” report instructed that there could also be different “centralized and decentralized digital asset exchanges” that make use of “unlicensed patented IP” from Veritaseum along with Coinbase.
Related: Coinbase hit with 2 recent lawsuits amid SEC probe
According to the courtroom doc, Patent 566 was awarded to Vertiaseum founder Reginald ‘Reggie’ Middleton and co-inventor Mathew Bogosian by the U.S. Patent and Trademark Office on Dec. 7. 2021. However, 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 courtroom 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.