Coinbase: US-based crypto exchange giant faces $350 million lawsuit over alleged patent coverage
Major US crypto exchange Coinbase is facing a lawsuit alleging the company infringed a patent for a value transfer technology.
According to court filings in Delaware, Veritaseum Capital is seeking $350 million in damages from Coinbase, alleging that the exchange is using its patents to support some of its services, including Coinbase Cloud, Coinbase Pay, and Coinbase Wallet.
The filing states that Coinbase should have known about the patent's existence at least before July 3 of this year, when the plaintiffs made the announcement about the exchange.
Veritaseum Capital, a firm affiliated with blockchain technology firm Veritaseum, is led by crypto entrepreneur Reggie Middleton, who co-owns the patent with fellow Matthew Bogosian.
Patent claims ownership:
“Devices, systems, and methods that enable parties with little or no mutual trust to enter into and enforce conditional value transfer agreements based on third-party contributions or participation.” three, in arbitrary distances, without special technical knowledge of the underlying transfer mechanism. The option(s), the option of providing the involvement of third-party mediators, replacing assignor and assignee, replacing, modifying or reforming terminology, etc. ".
The filing states that the plaintiffs' allegations apply to Coinbase services that use proof-of-work and proof-of-stake blockchain and that a "significant" amount of Coinbase's revenue comes from micro-services patent infringement.
"A substantial portion of Defendant's revenue derives from transaction fees generated from the client's use of Defendant's blockchain infrastructure...
Defendant manufactures, uses, sells and/or supports infringing products and services on the Bitcoin, Bitcoin Cash, Litecoin, Ethereum and Solana platforms, as well as the NFT for its products and services running on and facilitate those platforms. "
Coinbase has not issued a public statement about the lawsuit at the time of this writing.
Sep 26, 2022