- DEF settles a patent dispute for DeFi protocols with True Return Systems.
- Amanda Tuminelli stated the patent focuses on “linking off-chain data to a blockchain.”
The DeFi Education Fund (DEF) recently settled with True Return Systems LLC (TRS) involving a patent dispute for Decentralized Finance (DeFi) protocols. On Monday, DEF announced that it had purchased a patent from TRS, resolving ongoing lawsuits against MakerDAO and Compound Protocol.
The patent, U.S. Patent No. 10,025,797, covers “oracle-like” technology for linking data storage and processing in ledgers. This technology is essential for connecting blockchains with external data sources, a fundamental aspect of DeFi. TRS had previously filed complaints against MakerDAO and Compound Protocol in October 2022. It claims infringement and seeks damages and restrictions on future use of the technology.
Moreover, DEF claimed the patent covered existing technology and accused TRS of patent trolling by targeting projects with weak defenses. In response, DEF lodged a petition for a review with the U.S. Patent and Trademark Office (USPTO) in September, arguing that TRS’s patent claim was based on technology already widely used before TRS’s patent was granted in 2018.
Amanda Tuminelli, DEF’s chief legal officer, stated, “Offensive patenting is antithetical to the ethos of open-source software development,” to a prominent crypto news media emphasizing the organization’s commitment to supporting open and free innovation.
DEF Settlement Clears Path for DeFi and Protects Open Source
The settlement resulted in the immediate dismissal of TRS’s lawsuits against MakerDAO and Compound Protocol. The terms of the financial settlement have not been disclosed. Before this resolution, TRS had even attempted to auction the patent as a non-fungible token (NFT) on OpenSea in November 2021 but did not secure a buyer.
This agreement not only clears the legal path for MakerDAO and Compound Protocol but also ensures that other DeFi projects can use oracle-like technology without fear of patent violation claims. The resolution highlights DEF’s role in protecting open-source development within the blockchain and freeing potential threats from patent disputes.
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