A decentralized finance (DeFi) advocacy organization has formally requested the United States Patent and Trademark Office (USPTO) to review a patent owned by a company it accuses of engaging in “patent trolling” – a practice where a company seeks to profit from patent litigation.
In a blog post dated September 11th, the DeFi Education Fund (DEF) announced that on September 7th, they submitted a comprehensive petition spanning over 90 pages to the Patent Trial and Appeal Board. The objective is to invalidate a patent held by True Return Systems.
This patent, which was granted in 2018, asserts ownership of a method for “connecting off-chain data to a blockchain,” according to Amanda Tuminelli, the legal head of DEF, as stated in a September 11th tweet.
Tuminelli also alleged that True Return Systems attempted to sell this patent as a nonfungible token (NFT). When no buyer materialized, the company initiated legal action against DeFi platforms MakerDAO and Compound Finance in October.
Tuminelli asserted, “It is evident that True Return’s intention was to target defendants who would be unable to respond to the lawsuit, thereby securing a default judgment.”
She further alleged that True Return’s strategy involved attempting to enforce the court’s judgment against token holders and subsequently repeating the process with other protocols that lacked the means to challenge them in a legal setting.
DEF contended that the technology covered by True Return’s patent was not novel at the time of its issuance. They pointed out the existence of comparable pre-existing technologies such as the InterPlanetary File System (IPFS) and decentralized storage platforms like Sia, Storj, and Swarm.
True Return Systems has acknowledged Cointelegraph’s inquiry but did not furnish an immediate response.
DEF stated that it initiated the petition with the USPTO to safeguard the capacity to employ and advance open-source software, with the aim of preempting any potential legal action by True Return against cryptocurrency projects. Additionally, DEF seeks to assist in the legal defense of MakerDAO and Compound.
True Return now has a three-month window to optionally provide a response to the petition. Following this period, the USPTO must render a decision within six months regarding whether to proceed with the patent review process. If the review proceeds, there is a subsequent 12-month period during which the USPTO will determine whether the patent should be invalidated.
