Other centralized and decentralized cryptocurrency exchanges, according to the plaintiff Veritaseum, may have also illegally utilized the patent to provide crypto payments, trading, and staking services.
Bitcoin exchange After being accused of violating a patent linked to its blockchain technology by blockchain-based software company Veritaseum Capital, Coinbase has found itself in legal trouble and is now suing for $350 million in damages.
In a complaint submitted on Thursday to the U.S. District Court in Delaware by the American legal firm Brundidge & Stanger, Veritaseum claims that Coinbase violated the “566 Patent,” which protects bitcoin payment transfer technology.
Since the patent focuses on “novel technologies, methods, and procedures” that enable parties to “enforce value transfer agreements” with “little or no confidence,” Veritaseum claims that Coinbase used the patent for several of its blockchain infrastructure services.
The legal team added that because the patent is applicable to both proof-of-stake (PoS) and proof-of-work (PoW) blockchains, it may be possible to transmit cryptocurrency payments, services for trading, and staking on chains that use both consensus processes.
In contrast to Coinbase, which “gained enormous profits by virtue of its violation,” Veritaseum Capital “suffered losses as a direct and proximate impact,” according to Veritaseum, which was used to support the $350 million figure.
According to Veritaseum’s “Coinbase: Forensic Analysis & Deep Dive” report from July, more “centralized and decentralized digital asset exchanges” outside Coinbase may make use of “unlicensed proprietary IP” from Veritaseum.
The U.S. Patent and Trademark Office granted co-inventor Mathew Bogosian and founder of Vertiaseum Reginald “Reggie” Middleton Patent 566 on December 7, 2021, according to the court filing. Vertiaseum did not specify how long Coinbase has allegedly been violating Patent 566.
Veritaseum Capital further asked for a jury trial to be held in the Delaware court as its preferred method of resolving the conflict.
When Cointelegraph contacted Coinbase for a comment, they did not immediately receive a response.
