Cryptocurrency exchange Coinbase has found itself in legal trouble after being accused of infringing on a patent linked to its blockchain technology by blockchain-based software business Veritaseum Capital, which is now seeking $350 million in damages, as reported by Cointelegraph.
According to Cointelegraph, Veritaseum claims Coinbase infringed on its cryptocurrency payment transfer technology patent, known as the “566 Patent,” in a lawsuit filed on Thursday in the United States District Court for the District of Delaware by the law firm Brundidge & Stanger.
According to Veritaseum, the patent centres around “new devices, systems, and techniques” that allow parties to “enforce value transfer agreements” with “little or no trust” in each other, and Coinbase allegedly leveraged this for several of its blockchain infrastructure services, “Defendant’s infringing activities include but are not limited to its website. Coinbase Android mobile wallet iOS mobile wallet its Coibase Cloud, Coinbase Commerce APIs, Query and Transact, Participate, Delegate and Validator software, Coinbase Pay, Coinbase Wallet, and Coinbase Operated Public Validators.”
The law firm further stated that the patent is applicable with proof-of-stakes (PoS) and proof-of-work (PoW) blockchain.
Cointelegraph further noted that Veritaseum clarified that Coinbase had gained the $350 million figure by infringement due to which Veritaseum sustained damages as a direct and proximate result. The attorneys also stated that Veritaseum had sent a letter to Coinbase. It read, “Defendant had prior knowledge, should have known, or at least been willfully blind of the ‘566 Patent.”
Earlier in July, Vertiaseum’s “Coinbase: Forensic Analysis & Deep Dive’ report suggested that there might be other “centralised and decentralised digital asset exchanges” that enroll “unlicensed patented IP” from Veritaseum including Coinbase, Cointelegraph noted.
(With insights from Cointelegraph)