In a recent legal showdown, the DeFi Education Fund (DEF) has taken proactive measures to defend the cryptocurrency industry’s right to use open-source software. DEF initiated a legal action against a firm it labels a “patent troll,” Connecticut-based technology company True Return Systems LLC. The patent dispute revolves around allegations of patent infringement against two decentralized autonomous organizations (DAOs), MakerDAO and Compound Protocol.
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The DeFi Education Fund (DEF’s) Bold Move
The DEF has petitioned the United States Patent and Trademark Office (USPTO) to initiate an inter partes review (IPR) to cancel all claims in a patent owned by True Return Systems. This patent is at the center of the legal dispute, as it claims to invent a process for bringing off-chain data on-chain. True Return Systems attempted to sell this patent as a nonfungible token (NFT). They later pursued legal action against MakerDAO and Compound Protocol for alleged infringement.
The Inter Partes Review (IPR) Explained
An IPR is a legal proceeding where a third party challenges the validity of a patent by demonstrating that “prior art” existed before the patent application. In this case, DEF argues that the technology described in the patent was not novel or unique at the time it was granted, citing prior art in circulation before the patent’s issuance.
True Return Systems and Their Actions
True Return Systems is the holder of the patent being challenged in DEF’s petition. The company alleges that it possesses the exclusive right to and standing to prosecute for patent infringement. They initially filed lawsuits against MakerDAO and Compound Protocol, claiming that both DAOs knew about the patent and infringed upon it.
DEF’s Challenge: Protecting Open Source Principles
DEF’s legal action is driven by a commitment to protect the cryptocurrency industry’s ability to use and develop open-source software. They argue that patent infringement claims should not stifle innovation in the open-source development community, as open source encourages collaboration and improvement on existing technological developments.
The Importance of This Case
This legal battle could set a precedent for handling patent claims in the crypto industry, potentially influencing future legal actions. It highlights the issue of patent trolls in the crypto sector, sparking discussions and activities to address this concern.
Conclusion: DEF’s Stand for Open Source Innovation
In conclusion, the DeFi Education Fund’s legal action against True Return Systems exemplifies the crypto industry’s commitment to defending open-source principles. As the case unfolds, it may shape the industry’s approach to patent-related challenges, ensuring that innovation continues to flourish within cryptocurrency and blockchain technology. Stay tuned for updates on this pivotal legal battle.
