Petition To Defend DeFi: Group Battles Patent Troll Threat

The DeFi Education Fund has requested the United States Patent and Trademark Office (USPTO) to review a patent by True Return Systems. According to the organization, True Return Systems is using this patent for their financial gain by initi­ating legal actions against decent­ralized proto­cols, labeling them as ‘patent trolls.’

On Sept 11, in a recently published blog post, the DeFi Education Fund (DEF) shared that they took significant action on Sept 7. They dilig­ently prepared and submitted an extensive petition spanning over 90 pages to the Patent Trial and Appeal Board. This petition serves as their effort to request the cancel­lation of a patent owned by True Return Systems.

In 2018, Amanda Tumin­elli, the legal head of DEF, announced through a Twitter post on Sept 11 that they obtained a patent. This patent claims ownership of a method called “assoc­iating off-chain data with a blockc­hain.

Tuminelli claimed that True Return attempted to market its patent as a nonfu­ngible token (NFT). When no buyer was found, the company took legal action against DeFi platforms MakerDAO and Compound Finance in October.

Tuminelli noted that True Return’s objective was clear: they aimed to identify defen­dants who could not respond to the compl­aint, allowing them to secure a default judgm­ent.

True Return’s Patent Under Scrutiny: DeFi Fight For Innovation

She stated that True Return intended to pursue legal actions against token holders in court. They also planned to apply the same strategy to other protocols that cannot legally challenge or lack the necessary resources for a counterclaim.

However, DEF claimed that the techn­ology described in True Return’s patent lacked novelty at its granting. In addition, they highlighted resemb­lances to established techno­logies like the Interpl­anetary File System (IPFS) and decent­ralized storage platforms such as Sia, Storj, and Swarm.

However, DEF announced initi­ation a petition with the USPTO to protect the freedom and advan­cement of open-source software. This action aims to prevent potential litigation from True Return against cryptocurrency projects. It also provides support for the legal defense efforts of MakerDAO and Compound.

Additionally, True Return grants a three-month window within which an optional response to the petition can be submi­tted. Following this period, the USPTO must decide whether to proceed with the patent review. We will allocate the subsequent 12 months to determine the potential invalidation of said patent.

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