Veritaseum, the plaintiff, believes that crypto trading, payments and staking could have been illegally enabled by other decentralized and centralized crypto exchanges. After being accused by Veritaseum Capital, a blockchain-based software company, of infringing a patent related to its blockchain technology, crypto exchange Coinbase is now seeking $350M in damages.
According to a lawsuit filed by Brundidge & Stanger, a United States law firm, in the U.S. District Court, Delaware, Veritaseum claims that Coinbase violated its patent for cryptocurrency payment transfer technology, also known as the “566 Patent.
Veritaseum claimed that the patent revolves about “novel systems, devices and methods” that enable parties to “enforce values transfer agreements” with little or no trust in one another. Coinbase is alleged to have used this method for many of its Blockchain infrastructure services.
“Defendant’s infringing actions include, but are not limited, to its website Coinbase Android Mobile wallet iOS phone wallet and its Coinbase Cloud, Coinbase commerce APIs, Query, Transact, Participate and Validator software.
Veritaseum Capital requested that the dispute be resolved by a trial before a jury in Delaware.
The law firm explained that the patent was applicable to proof of-stake and proof-of work blockchains. This could allow for the transfer and trading of cryptocurrency on chains supported with those consensus mechanisms.
Veritaseum defended the $350m figure by arguing Coinbase had “gained substantial profit by virtue of its infringement” and Veritaseum Capital had “sustained damages direct and proximately to that result.”
They also pointed out that Veritaseum had sent Coinbase a July letter informing it of the alleged infringement.
“Defendant knew, or should have known, the ‘566 Patent.” The ‘566 Patent was known to defendant at least three days before July 3, 2022. If not earlier, it was already known from other sources.
Vertiaseum’s July “Coinbase” report indicated there could be other “centralized” and “decentralized” digital asset exchanges that use “unlicensed, patented IP” from Veritaseum.
According to court documents, Patent 566 was granted to Veritaseum founder Reggie Middleton and coinventor Mathew Bogosian by the U.S. Patent and Trademark Office Dec. 7, 2021. Veritaseum didn’t mention for how long Coinbase was allegedly using Patent 566, however.
Coinbase was contacted by Cointelegraph for comment, but they did not respond to our request at the time of publication.