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- DEF has saved Compound and MakerDAO from a lawsuit by buying a disputed patent
- True Return Systems had sued the DeFi exchanges for claiming ownership of a patented oracle-like technology
- True Return Systems has filed to terminate the lawsuit against the two exchanges
True Return Systems (TRS) has agreed to stop suing DeFi exchanges Compound and MakerDAO after the DeFi Education Fund (DEF) agreed to buy a patent that was at the center of the lawsuit. TRS had accused the exchanges of using a patented oracle-like technology that allows for automated ledger management among other DeFi exchange functions. DEF didn’t disclose the settlement amount, only saying they bought the patent to safeguard against potential infringement of users’ and developers’ rights, something that regulators also want to protect in the DeFi space.
Patent Now Open to All
DEF and the two exchanges had tried to dispute TRS’ claims with DEF previously describing the lawsuit as a “patent troll” and overreaching. In its lawsuit, TRS wanted the exchanges to stop using the patented technology, something that would have disrupted MakerDAO and Compound’s operations because oracles are an integral part of DeFi exchange operations.
4) To that end, DEF will dedicate the patent to the public, meaning the patent can never be used as the basis of a lawsuit for patent infringement in the future. pic.twitter.com/8eh5U8qKnv
— DeFi Education Fund (@fund_defi) August 12, 2024
DEF noted that the patent will now be dedicated to the public meaning “it can never be used as the basis of a lawsuit for patent infringement in the future.” DEF’s Amanda Tuminelli commented on the victory noting that open-source software “benefits all of us.”
2/ ICYMI, we petitioned the USPTO for the cancellation of a patent being used by a “patent troll” to sue DAOs & “protocols.” This action is just one of the many that DEF has taken in the last few months to protect DeFi & crypto.
We need your support to keep at it.
— DeFi Education Fund (@fund_defi) September 13, 2023
The Best Way to End the Lawsuit
Tuminelli also said that purchasing the patent was the best way to end the lawsuit after trying other means like asking the United States patents office to cancel TRS’ patent. DEF noted that the TRS case is one among many it’s handling to “protect DeFi and crypto.”
2/ ICYMI, we petitioned the USPTO for the cancellation of a patent being used by a “patent troll” to sue DAOs & “protocols.” This action is just one of the many that DEF has taken in the last few months to protect DeFi & crypto.
We need your support to keep at it.
— DeFi Education Fund (@fund_defi) September 13, 2023
Other crypto companies that have been accused of patent infringement include Coinbase which was sued by Veritaseum two years ago. Veritaseum demanded $350 million from the crypto exchange.
With DEF making the patent available to all, it’s likely to spur innovations in the DeFi sector.
