In recent years, the software industry has been plagued by a phenomenon known as patent trolling. Patent trolls are entities that acquire patents, often of dubious quality or relevance, and use them to sue or threaten to sue other companies for infringement. Their goal is not to innovate or compete, but to extract money from the defendants, who often prefer to settle rather than engage in costly and lengthy litigation.
The DeFi Education Fund (DEF), a non-profit organization that aims to promote education and advocacy for decentralized finance, has filed a petition with the U.S. Patent and Trademark Office (USPTO) to challenge the validity of several patents held by a company called Uniloc. Uniloc is a notorious “patent troll” that has sued hundreds of companies, including Microsoft, Sony, and Netflix, Electronic Arts, and Mojang for allegedly infringing on its patents, many of which are vague or overly broad. Many of these lawsuits have been dismissed or invalidated by the courts, but Uniloc continues to file new ones, hoping to find a willing target.
According to the petition, Uniloc claims to own patents that cover various aspects of blockchain technology, such as smart contracts, tokenization, and decentralized exchanges. Uniloc has filed lawsuits against several DeFi projects, including MakerDAO, Compound, and Uniswap, demanding royalties and threatening to block their access to the U.S. market. DEF argues that these lawsuits are baseless and harmful to the innovation and growth of the DeFi sector.
DEF is seeking to invalidate Uniloc’s patents under the inter partes review (IPR) process, which allows third parties to challenge the patentability of existing patents based on prior art. Prior art is any evidence that shows that the invention claimed by the patent was already known or obvious before the patent was filed. DEF claims that Uniloc’s patents are invalid because they are either anticipated or rendered obvious by prior art in the field of blockchain and cryptography.
However, some of Uniloc’s victims are fighting back. A group of software developers and companies, led by Cloudflare, have launched a series of ‘patent troll’ lawsuits to challenge the validity of several patents held by Uniloc. These lawsuits are based on a legal doctrine called inter partes review (IPR), which allows anyone to petition the US Patent and Trademark Office (USPTO) to reexamine a patent and determine if it meets the criteria of novelty and non-obviousness. If the USPTO finds that the patent is invalid, it can cancel it and prevent further litigation.
The IPR lawsuits are intended to expose the weakness of Uniloc’s patent portfolio and deter it from pursuing further litigation. They are also meant to send a message to other patent trolls that they will face resistance and scrutiny if they try to abuse the patent system. The IPR lawsuits are supported by the Electronic Frontier Foundation (EFF), a digital rights advocacy group that has been campaigning against patent trolling for years.
The IPR lawsuits are an example of how software developers and companies can use the legal system to defend themselves against patent trolling. They are also a way of promoting innovation and competition in the software industry, which benefits consumers and society as a whole. By challenging Uniloc’s patents, the IPR lawsuits aim to protect the software industry from predatory and frivolous litigation.
DEF hopes that its petition will deter Uniloc from pursuing further litigation against DeFi projects and encourage other patent trolls to reconsider their strategy of exploiting the patent system for profit. DEF also hopes that its petition will raise awareness and educate the public about the importance and potential of DeFi and the need to protect it from predatory practices.
