A New York federal judge has dismissed a patent infringement lawsuit filed by Bancor-affiliated entities against Uniswap, marking a significant procedural victory for the decentralized exchange.
Dismissal of Patent Claims
On February 10, Judge John G. Koeltl of the US District Court for the Southern District of New York granted Uniswap’s motion to dismiss the complaint from Bprotocol Foundation and LocalCoin Ltd. The judge ruled that the patents in question pertain to abstract ideas and thus do not meet the eligibility criteria under US patent law.
Abstract Ideas and Patent Eligibility
The court determined that the patents were focused on the abstract concept of calculating cryptocurrency exchange rates, failing the two-step test for patent eligibility set by the US Supreme Court. Judge Koeltl noted that currency exchange is a fundamental economic practice and that merely implementing the pricing formula on blockchain technology does not render the claims patentable. He emphasized that the patents used existing blockchain and smart contract technology in predictable ways to solve an economic problem.
Implications for the Case
The dismissal was granted without prejudice, allowing the plaintiffs 21 days to amend their complaint before the ruling becomes final. If no amended complaint is filed, the dismissal will convert to one with prejudice, effectively ending the case. Following the ruling, Uniswap founder Hayden Adams confirmed the win via a post on X.
Failure to Prove Infringement
Beyond the patent eligibility issue, the court found that the amended complaint did not adequately demonstrate direct infringement by Uniswap. The plaintiffs failed to specify how Uniswap’s publicly available code incorporated the required reserve ratio constant outlined in the patents. Additionally, claims of induced and willful infringement were dismissed, as the court found no evidence that the defendants were aware of the patents prior to the lawsuit.
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