Research Summary
The DeFi Education Fund (DEF) has taken legal action against True Return Systems LLC (TRS), a company they label as a patent troll. DEF has filed a petition with the United States Patent and Trademark Office (USPTO) to initiate an inter partes review (IPR) and cancel all claims in a patent owned by TRS. The patent in question, which TRS attempted to sell as an NFT before suing MakerDAO and Compound Protocol for alleged infringement, claims to invent a process for bringing off-chain data on-chain.
Key Takeaways
DEF’s Legal Action Against TRS
- DEF’s proactive stance: DEF has taken a proactive approach to protect DeFi and crypto from invalid patent infringement claims by filing a petition with the USPTO.
- Targeting TRS: The petition targets TRS, a company that DEF labels as a patent troll, and seeks to cancel all claims in a patent owned by TRS.
- Patent in question: The patent, which TRS unsuccessfully tried to sell as an NFT, claims to invent a process for bringing off-chain data on-chain.
Inter Partes Review (IPR)
- IPR explained: An IPR is a trial proceeding where a third party challenges the validity of a patent by demonstrating that “prior art” existed before the patent application.
- IPR timeline: Once an IPR petition is filed, the patent owner has three months to respond. The USPTO must decide whether to accept the petition and proceed with the review within six months of the IPR filing.
- DEF’s IPR petition: DEF’s petition argues that the technology described in the patent was not new or unique at the time the patent was granted, citing prior art that was in circulation before its issuance.
True Return Systems LLC (TRS)
- TRS’s patent: TRS is the holder of the patent being challenged in DEF’s petition. The patent claims to invent a “method and system for separating storage and process of a computerized ledger for improved function.”
- TRS’s actions: TRS has filed lawsuits against MakerDAO and Compound Protocol alleging patent infringement. TRS attempted to create an easy path to a default judgment that it could then try to enforce against token holders.
- DEF’s challenge: DEF is challenging the patent to defend people’s ability to use and develop open source software and to invalidate TRS’s efforts to sue additional crypto projects.
Actionable Insights
- Monitor the progress of the IPR: Stakeholders should keep an eye on the progress of the IPR to understand its potential impact on the DeFi and crypto space.
- Understand the implications of the case: The case could set a precedent for how patent claims are handled in the crypto industry, potentially influencing future legal actions.
- Consider the role of patent trolls: The case highlights the issue of patent trolls in the crypto industry, which could prompt further discussion and action on this topic.
