The DeFi Education Fund (DEF), a decentralized finance advocacy group, has taken action against what it deems a "patent troll" by petitioning the United States Patent and Trademark Office (USPTO) to review patents owned by True Return Systems. In a blog post on September 11, DEF announced it submitted a petition to the Patent Trial and Appeal Board on September 7. This extensive 90-page petition aims to cancel a patent held by True Return Systems, granted in 2018, which purports to provide a method for "linking off-chain data to the blockchain."
Amanda Tuminelli, DEF's legal chief, revealed in a Twitter post that True Return Systems has allegedly attempted to sell its patents as non-fungible tokens (NFTs). When unsuccessful, the company filed lawsuits against DeFi protocols MakerDAO and Compound Finance in October. Tuminelli suggested that True Return's goal is to target defendants who cannot respond to the complaint, allowing them to obtain a default judgment.
In response, Jack Fonss, the founder of True Return, stated that his company does not view diligent inventors as patent trolls. He framed the lawsuits against MakerDAO and Compound as disclosure matters, indicating that their technology has been publicly disclosed, making patent infringement assessments straightforward and essential for intellectual property owners. Fonss emphasized that the patent was based on over a decade of technical work in trading and operating public equity and institutional derivatives markets.
DEF's petition to the USPTO argues that True Return may attempt to enforce court rulings against token holders, repeating this process with other protocols that either lack the means to challenge such actions in court or lack the resources to do so. DEF contends that True Return's technology was not novel when patented and points to existing technologies such as the InterPlanetary File System (IPFS) and decentralized storage platforms like Sia, Storj, and Swarm as examples of similar existing technology. DEF's aims with the petition are to protect the ability to use and develop open-source software, prevent potential lawsuits by True Return against crypto projects, and assist MakerDAO and Compound in their legal defense.
In response, True Return has three months to provide a response to the petition. Six months later, the USPTO will decide whether to continue examining the patent, and after 12 months, it will determine whether the patent should be revoked.
