COPA Tackles Patent Issues in Cryptocurrency and Blockchain Space

TLDR

• COPA and Unified Patents launch “Blockchain Zone” campaign against patent trolls
• Patent trolls accounted for 58% of all US patent litigation in 2023
• Campaign aims to protect blockchain firms from costly legal claims
• Crypto sector has faced patent troll issues, including cases involving DeFi protocols
• ENS is challenging a patent granted to rival Unstoppable Domains

The Cryptocurrency Open Patent Alliance (COPA) and Unified Patents have joined forces to combat patent trolls in the blockchain and cryptocurrency sector.

Their new “Blockchain Zone” campaign targets non-practicing entities (NPEs) that hold patents for various blockchain technologies, including non-fungible tokens (NFTs), wallets, and smart contracts.

Patent trolls, also known as NPEs, are companies that acquire patents solely to profit from licensing or litigation, without actually using the technology themselves.

These entities have become a significant problem in the tech industry, accounting for 58% of all patent litigation in the United States in 2023, according to Unified Patents. Moreover, 95% of their targets were technology companies.

The crypto industry has not been immune to this issue.

For example, the DeFi Education Fund (DEF) recently had to intervene in a case involving True Return Systems, which had filed patent infringement claims against prominent DeFi protocols MakerDAO (now Sky) and Compound Finance.

The DEF ultimately purchased the patent from True Return as part of a settlement agreement to end the claims against these protocols.

COPA’s initiative aims to protect blockchain firms and developers from what they describe as “unwarranted and costly” legal claims.

Patent trolls often leverage the high costs of court battles to pressure companies into settlements, even when the claims may be baseless.

Paul Grewal, Coinbase’s legal chief, emphasized the importance of this campaign, stating, “Patent trolls are barriers in the path of innovation.

They must be stopped so that the community can continue to do the important business of building the crypto-economy.”

The partnership between COPA and Unified Patents is expected to provide a united front against patent trolls in the crypto sector.

Kevin Jakel, CEO of Unified Patents, expressed confidence that this collaboration would help prevent “baseless patent assertions” from hindering the growth of the crypto industry.

In another ongoing patent dispute, the Ethereum Name Service (ENS) is challenging a patent granted to its competitor, Unstoppable Domains.

The patent in question relates to technology that uses blockchain to determine domains. ENS claims it pioneered this technology, highlighting the complexity of patent issues in the rapidly evolving blockchain space.

The “Blockchain Zone” campaign represents a proactive approach by the crypto industry to address the growing threat of patent trolls.

By targeting patents held by NPEs, COPA and Unified Patents aim to create a more favorable environment for innovation in blockchain and cryptocurrency technologies.