The DeFi Education Fund （DEF） has acquired a key patent to protect decentralized autonomous organizations （DAOs） like MakerDAO and Compound Protocol from lawsuits, potentially setting a precedent for safeguarding open-source projects from patent trolls.
Points
- The DeFi Education Fund （DEF） purchased a patent previously used in lawsuits against MakerDAO and Compound.
- The acquisition prevents the patent from being used in future legal actions against DeFi projects.
- DEF aims to protect the ethos of open-source development by countering what it considers patent trolling.
- The lawsuit against MakerDAO and Compound was dismissed as a result of the patent purchase.
In a strategic move to protect the decentralized finance （DeFi） ecosystem, the DeFi Education Fund （DEF） has acquired a patent that had been at the center of lawsuits against MakerDAO and Compound Protocol. The patent, originally owned by True Return Systems （TRS）, pertains to an oracle-like system for the “separation and linkage of stacked modular data storage and processing.” By purchasing this patent, DEF aims to prevent it from being used in similar lawsuits in the future, thereby shielding DeFi projects from legal threats that could hinder innovation and development.
True Return Systems had previously filed lawsuits against MakerDAO and Compound Protocol, accusing these decentralized autonomous organizations （DAOs） of patent infringement. The lawsuits sought damages and aimed to enjoin the DAOs from using the technology covered by the patent. However, DEF’s acquisition of the patent has effectively nullified these legal actions, allowing MakerDAO and Compound to continue their operations without the looming threat of litigation.
DEF’s decision to purchase the patent is part of a broader strategy to protect the DeFi space from what it views as “patent trolling.” Patent trolls, or entities that hold patents not for the purpose of developing technology but to extract settlements from companies, have long been a thorn in the side of the tech industry. By dedicating the patent to the public, DEF ensures that it cannot be used to stifle innovation within the DeFi community.
The purchase of the patent follows DEF’s earlier efforts to invalidate it through a petition to the United States Patent and Trademark Office （USPTO）. DEF argued that the technology covered by the patent was already in wide use before TRS filed its patent application. The petition highlighted four technologies developed between 2014 and 2016 that served similar purposes, calling into question the validity of TRS’s claims.
Despite these efforts, DEF ultimately decided that acquiring the patent outright was the most effective way to protect the DeFi ecosystem. As a result of the settlement with TRS, the lawsuits against MakerDAO and Compound have been dismissed. DEF’s chief legal officer, Amanda Tuminelli, emphasized the importance of protecting open-source projects from legal challenges that could stifle their growth. She stated, “Offensive patenting is antithetical to the ethos of open-source software development.”
TRS had attempted to sell the patent as a non-fungible token （NFT） on OpenSea in November 2021, marking the first time a patent had been tokenized. However, the NFT did not find a buyer, and TRS eventually turned to litigation as a means of monetizing the patent. The founder of TRS, Jack Fonss, passed away in March 2024, and the company’s website was offline at the time of the patent purchase.
The resolution of the lawsuits through DEF’s patent purchase is a significant win for the DeFi community. It sets a precedent for how open-source projects can protect themselves from legal threats while continuing to innovate and expand. By dedicating the patent to the public, DEF has removed a potential barrier to the growth of decentralized finance, ensuring that the community can continue to build on the foundation of open-source technology without fear of litigation.
解説
- Patent Trolling in DeFi: The acquisition of the patent by DEF highlights the ongoing challenge of patent trolling in the tech industry, where entities seek to profit from patents without contributing to technological development. In the context of DeFi, this practice poses a significant threat to innovation, as it can lead to costly and time-consuming legal battles for projects that operate on open-source principles.
- DEF’s Strategic Move: DEF’s proactive approach in acquiring the patent and dedicating it to the public serves as a model for other open-source communities. By removing the patent from the hands of a potential litigant, DEF has not only protected MakerDAO and Compound but also set a precedent for how similar threats can be mitigated in the future.
- Implications for the DeFi Ecosystem: The resolution of the lawsuits through this patent purchase is a major victory for the DeFi ecosystem. It ensures that projects can continue to innovate without the fear of legal challenges that could stifle their growth. This move also reinforces the importance of protecting open-source projects from entities that seek to exploit the legal system for financial gain.