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Last week, the DeFi Education Fund (DEF) swung into motion, submitting a petition with the U.S. Patent and Trademark Office. Significantly, this transfer comes after a lawsuit towards MakerDAO and Compound Protocol by True Return Systems LLC. The Connecticut-based tech firm claims these decentralized autonomous organizations (DAOs) knowingly infringed on their 2018 patent, threatening the very basis of open-source innovation within the crypto world.

The Patent in Question

True Return owns a patent granted in 2018, claiming an innovation for transferring off-chain information by way of oracles. Oracles are third-party companies that liaise between the blockchain world and real-world information. Moreover, True Return asserts it has the unique proper to prosecute for infringement, as outlined in its complaints towards MakerDAO and Compound Protocol.

However, the DeFi Education Fund argues that the patent is much from novel. The group cites a Nasdaq patent filed greater than a 12 months earlier than True Return’s software. Amanda Tuminelli, DEF’s Chief Legal Officer, states,

“The Nasdaq patent closely resembles True Return’s, focusing on bringing price feed data on-chain. Hence, the patent should never have been granted.”

Legal Tug-of-War and the Implications

What provides complexity to the state of affairs is the decentralized nature of the defendants—DAOs, or decentralized autonomous organizations, which aren’t managed by a single entity. Consequently, no person confirmed up in courtroom to defend MakerDAO and Compound Protocol, making it straightforward for True Return to hunt a default judgment.

As of July, MakerDAO has enlisted the authorized companies of Perkins Coie, whereas Compound Labs is searching for to intervene within the case, represented by Morrison Cohen LLP. Additionally, DEF has initiated an Inter Partes Review (IPR) course of to show that “prior art” invalidates the True Return patent. In the petition, DEF cites the Nasdaq patent and different applied sciences like IPFS and SIA, circulated nicely earlier than the True Return patent.

The DeFi Education Fund is standing up towards what it labels ‘patent trolling,’ meaning to safeguard the cryptocurrency trade’s dedication to open-source software program growth. By doing so, DEF hopes to problem True Return Systems and set a precedent that might deter future infringement claims towards decentralized entities. It’s a posh authorized battle with excessive stakes, one that might considerably affect the way forward for innovation within the cryptocurrency realm.

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Kelvin is a distinguished author specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive evaluation and insightful content material, he has an adept command of English and excels at thorough analysis and well timed supply.

The offered content material might embody the non-public opinion of the writer and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The writer or the publication doesn’t maintain any accountability on your private monetary loss.