Uniswap Patent Infringement Claims Dismissed by NY Court
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A patent infringement lawsuit filed against the developers of the Uniswap protocol has been dismissed by a New York federal court. On , the judge ruled that the patents asserted by BPROTOCOL Foundation were directed at an abstract economic idea, rendering them ineligible for patent protection under current U.S. law.

In the case of BPROTOCOL Foundation v. Universal Navigation, Judge John G. Koeltl of the U.S. District Court for the Southern District of New York dismissed claims that the Uniswap decentralized exchange infringed on two patents. The patents, U.S. Patent No. 11,107,049 and No. 11,574,291, relate to a “constant product automated market maker” (CPAMM) system. The court’s dismissal was issued without prejudice, which allows the plaintiff, BPROTOCOL Foundation, the option to file an amended complaint to address the issues raised in the ruling.

The court’s decision was based on the two-step test for patent eligibility established in the Supreme Court case Alice Corp. v. CLS Bank. Judge Koeltl determined the patents were directed to the abstract idea of “calculating currency exchange rates to perform transactions,” which he described as a “fundamental economic practice.” The court rejected the argument that implementing the idea on a blockchain made it patentable, stating the claims do not purport to solve any technological problem, but instead use existing … blockchain technology in predictable ways to address [an] economic problem.

Furthermore, the court found that the plaintiff failed to plausibly allege direct infringement. According to the ruling, the complaint did not demonstrate that Uniswap’s open-source code contained a key component required by the patents, the “reserve ratio constant.” The judge noted that the plaintiff had access to the code and failed to plead the specifics of the alleged infringement. Claims of willful infringement were also dismissed, as the court affirmed that simply filing a complaint is not sufficient to prove the defendant had knowledge of the patent.

The immediate future of the legal challenge depends entirely on the plaintiff’s next move. Should BPROTOCOL Foundation choose to file an amended complaint, it will need to provide a more compelling argument that its patents represent a specific technological solution rather than an abstract idea. This case is being watched closely, as its outcome could influence how patent law is applied to other protocols in the decentralized finance (DeFi) sector.

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