Crypto exchange Coinbase has found itself in legal hot water after blockchain-based software firm Veritasium Capital accused it of infringing patents related to blockchain technology — and is now seeking $350 million in damages.
According to a lawsuit filed Thursday by the US law firm Brundage & Stanger in US District Court in Delaware, Veritasum alleges that Coinbase infringes on a patent for cryptocurrency payment transmission technology known as the “566 patent.”
The patent revolves around “novel devices, systems and methods,” he said.
“The defendant’s infringing activities are not limited to the website […] Coinbase Android mobile wallet […] iOS mobile wallet […] Its Coinbase Cloud, Coinbase Commerce APIs, Query and Transact, Participate, Delegate and Verifier software, Coinbase Pay, Coinbase Wallet and Coinbase Operated Public Validators.
The law firm also stated that it is applicable to proof of proof (PoS) and proof of work (PoW) blockchains, which transfer cryptocurrency payments, trade and stock services on chains supported by these consensus mechanisms. .
In keeping with my many caveats about poor due diligence, our lawsuit includes patent claims covering PoS and PoW Ethereum, NFTs, and Bitcoin transfers. This has been public information since 2015, I’ve been tweeting publicly for about a year. It shouldn’t surprise anyone! https://t.co/MjuJSvYBrc
– Reggie Middleton DeFi Patent US11196566, JP6813477 (@ReggieMiddleton) September 22, 2022
Veritaseum confirmed the $350 million figure, arguing that Coinbase “made substantial profits as a result of the breach” and that Veritaseum Capital sustained damages as a “direct and proximate result.”
The lawyers also added that Veritaseum had previously sent a letter to Coinbase warning of the breach in July.
“Defendant had prior knowledge, should have known, or at least was willfully blind to the ‘566 patent. Defendant has been in possession of the ‘566 patent since at least July 3, 2022, unless earlier from other sources or parties.
In July, Vertiaseum’s “Coinbase: Forensic Analysis & Deep Dive” Report In addition to Coinbase, he suggested that there may be other “centralized and decentralized digital asset exchanges” that employ “unlicensed patent IP” from Veritaseum.
Related: Coinbase was hit with 2 new lawsuits amid the SEC investigation
According to court documents, Patent 566 was awarded to Vertiaseum founder Reginald ‘Reggie’ Middleton and co-inventor Matthew Bogosian by the US Patent and Trademark Office on December 7, 2021. However, Verticium did not say how long Coinbase was sued for. Using the 566 patent.
Veritaseum Capital has also requested a jury trial in a Delaware-based court as the preferred method to resolve the dispute.
Cointelegraph reached out to Coinbase for comment but did not receive an immediate response at the time of publication.