Blockchain-based software firm Veritaseum Capital has accused Coinbase of infringing on a blockchain-related patent. The firm has decided to sue the popular crypto exchange for $350 million in damages.
Speaking for Veritaseum, US law firm Brundidge & Stanger has alleged in the lawsuit that Coinbase has undermined Veritaseum’s cryptocurrency payment technology patent or the “566 patent”. The lawsuit has been filed in the U.S. District Court in Delaware.
According to Veritaseum, the patent facilitates novel devices, systems and methods which enable parties to enforce value transfer agreements with little or no trust in each other.
The firm alleges in the lawsuit that Coinbase has used this system to run many of its blockchain infrastructure services, including Coinbase Android mobile wallet, iOS mobile wallet, its Coinbase Cloud, Coinbase Commerce APIs, Query and Transact, Participate, Delegate and Validator software, Coinbase Pay, Coinbase Wallet and Coinbase Operated Public Validators.
Veritaseum has argued that the $350 million compensation is justified considering that Coinbase has gained substantial profits due to its infringement and Veritaseum Capital “sustained damages as a direct and proximate result.”
The law firm has also pointed out that a letter warning Coinbase of the infringement was sent in June and received no favourable response:
“Defendant had prior knowledge, should have known, or at least been willfully blind of the ‘566 Patent’. Defendant has been on notice of the ‘566 Patent’ at least as early as July 3, 2022, if not earlier from other sources or parties.”
The July letter was sent in the context of Vertiaseum’s “Coinbase: Forensic Analysis & Deep Dive” report that suggested that Coinbase was only one of the many centralized and decentralized digital asset exchanges that are employing “unlicensed patented IP” from Veritaseum.
The firm, however, has not clarified how long Coinbase has been allegedly using the patent.
Court documents confirm that Patent 566 was awarded by the U.S. Patent and Trademark Office to Vertiaseum founder Reginald ‘Reggie’ Middleton and co-inventor Mathew Bogosian in December of 2021.
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