Blockchain firm sues Coinbase for $350M for patent infringement

The plaintiff, Veritaseum believes that alternative centralized and decentralised crypto exchanges could have additionally unlawfully used the patent to facilitate crypto payments, trading, and staking services.

Crypto exchange Coinbase has found itself in legal matters after being accused by blockchain-based software system firm Veritaseum Capital of infringing on a patent concerning its blockchain technology — and is currently seeking $350 million in damages.

According to a case filed on Thursday by U.S. law firm Brundidge & Stanger within the U.S. District Court in Delaware, Veritaseum alleges that Coinbase infringed on its cryptocurrency payment transfer technology patent, referred to as the “566 Patent.”

Veritaseum aforementioned the patent revolves around “novel devices, systems and methods” that modify parties to “enforce worth transfer agreements” with “little or no trust” in one another, alleging Coinbase used this for several of its blockchain infrastructure services:

“Defendant’s infringing activities include, however, aren’t restricted to its web site […] Coinbase android mobile wallet […] iOS mobile wallet […] its Coinbase Cloud, Coinbase Commerce APIs, queries and transact, Participate, Delegate and Validator software system, Coinbase Pay, Coinbase wallet and Coinbase Operated Public Validators.”

The law firm additionally explained that the patent is applicable with proof-of-stake (PoS) and proof-of-work (PoW) blockchains, that might modify the transfer of cryptocurrency payments, commerce and staking services on chains supported by those accord mechanisms.

Veritaseum even raised the $350 million figure by dispute that Coinbase had “gained substantial profits by virtue of its infringement” while Veritaseum Capital “sustained damages as an immediate and proximate result.”

The attorneys additionally noted that Veritaseum had antecedently sent a letter to Coinbase in July warning it of its alleged infringement, adding:

“Defendant had previous information, ought to have famed, or a minimum of been wilfully blind of the ‘566 Patent. suspect has been on notice of the ‘566 Patent a minimum of as early as July 3, 2022, if not earlier from alternative sources or parties.”

In July, Vertiaseum’s “Coinbase: rhetorical Analysis & Deep Dive” report urged that there is also alternative “centralized and decentralised digital asset exchanges” that employ “unlicensed proprietary IP” from Veritaseum additionally to Coinbase.

According to the court document, Patent 566 was awarded to Vertiaseum founder Reginald ‘Reggie’ dramatist and co-inventor Mathew Bogosian by the U.S. Patent and Trademark workplace on Dec. 7. 2021. However, Vertiaseum failed to mention however long Coinbase had been allegedly using Patent 566 for.

Veritaseum Capital additionally requested a trial by jury in the Delaware-based court as its most well-liked means to resolve the dispute.

Cointelegraph reached out to Coinbase for comment however did not get an instantaneous response by the time of publication.