A New York federal judge has dismissed a patent infringement lawsuit filed by Bancor-affiliated corporations against Uniswap, ruling that the asserted patents claim abstract ideas and are usually not entitled to protection under U.S. patent law.
In a memorandum and order dated February 10, Judge John G. Koeltl of the United States District Court for the Southern District of New York granted the defendant's motion to dismiss Bprotocol Foundation and LocalCoin Ltd. to dismiss the lawsuit filed against Universal Navigation Inc. and the Uniswap Foundation.
The court found that the patents address the abstract idea of calculating crypto exchange rates and due to this fact fail the two-stage test for patent eligibility set by the U.S. Supreme Court.
The ruling represents a procedural victory for Uniswap, but just isn’t final. The lawsuit was dismissed without prejudice, with plaintiffs given 21 days to file an amended grievance. If an amended grievance just isn’t filed, the dismissal will likely be converted to a brief dismissal.
Shortly after the decision, Uniswap founder Hayden Adams wrote on X: “A lawyer just told me we won.”
Source: Hayden Adams
Cointelegraph has reached out to representatives from the Bprotocol Foundation and Uniswap for comment but didn’t receive a response via publication.
Richter concludes that patents claim abstract ideas
As previously reported, Bancor alleged that Uniswap violated patents related to a “constant product automatic market maker” system that underlies decentralized exchanges.
The dispute centered on whether Uniswap's protocol unlawfully used patented technology for automated token pricing and liquidity pools.
Koeltl said the patents goal “the abstract idea of calculating exchange rates to perform transactions.”
He wrote that currency exchange is a “fundamental economic practice” and that calculating price information is abstract under established Federal Court precedent.
The judge rejected arguments that the implementation of the pricing formula on blockchain infrastructure made the claims patentable, saying the patents merely exploit existing blockchain and smart contract technology “in a predictable manner to unravel an economic problem.”
He said limiting an abstract idea to a specific technological environment doesn’t make it patentable. The court also found that no “inventive concept” was sufficient to remodel the abstract idea right into a patentable application.
Court grants motion to dismiss. Source: CourtListener
No violation is alleged within the grievance
Beyond patent eligibility, the court found that there was no plausible allegation of direct infringement within the amended grievance.
According to the memorandum, the plaintiffs haven’t discovered how Uniswap's publicly available code comprises the required reserve ratio constant laid out in the patents.
The judge also dismissed claims of induced and willful infringement, finding that the grievance didn’t plausibly allege that the defendants knew in regards to the patents before filing the lawsuit.
The dismissal without prejudice leaves open the chance that the Bprotocol Foundation and LocalCoin Ltd. could try to claim recent claims.
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