DeFi Education Fund (DEF) Acquired Patent, Ends Lawsuits

• DeFi Education Fund (DEF) has acquired a key patent, ending lawsuits against MakerDAO and Compound, and plans to release it publicly to support open-source innovation.

The DeFi Education Fund (DEF) has acquired a patent from True Return Systems (TRS) that effectively ends the legal battles against MakerDAO and Compound Protocol. 

This patent describes a “method and system for separating storage and processing” of a computerized ledger, aiming to enhance its functionality. This acquisition is crucial in preventing future legal actions over this technology.

The patent was granted by the US Patent and Trademark Office in 2018. It focuses on improving how computerized ledgers function by separating storage from processing. 

TRS accused MakerDAO and Compound of infringing on this patent, claiming that their systems, which connect off-chain data to blockchains, violated its terms. This link is vital for decentralized finance (DeFi) operations.

On Monday, DEF announced that it had “reached an agreement” with TRS to buy the patent, resulting in the lawsuits’ immediate dismissal. 

Amanda Tuminelli, DEF’s chief legal officer, stated that DEF plans to make the patent public to ensure it can’t be used to sue other projects using oracle technology. 

Tuminelli said, “We are pleased to announce we have purchased the patent from True Return Systems that was being used to sue MakerDAO and Compound. As a result, TRS will dismiss its lawsuits.”

True Return Systems, with patent inventor Jack Fonss, filed lawsuits against MakerDAO and Compound in late 2022. 

They alleged the organizations violated their patent, which covers a system for “storing, creating, monitoring, and managing data in distributed ledgers.” The system improves functionality by separating and linking modular data storage and processing.

In a post on X last September, Tuminelli revealed that TRS had tried to sell the patent as an NFT on OpenSea. Initially, it was listed for 2,250 WETH, worth about $6 million today. However, it was later reduced to 1,250 WETH, or $3.3 million, due to a lack of offers. 

Tuminelli criticized the idea of patenting widely used technology like oracle technology, saying, “Patenting widely used technology like oracle technology contradicts open-source development principles.”

By purchasing the patent and making it public, DEF shows its commitment to open-source values. This move aims to protect the DeFi community from similar lawsuits and encourage innovation without the risk of patent infringement. It also highlights the ongoing tension between proprietary claims and the collaborative spirit of blockchain technology.

True Return Systems filed a voluntary dismissal of its lawsuits against MakerDAO and Compound following the agreement with DEF. By acquiring and dedicating the patent to the public, DEF aims to protect the DeFi ecosystem from further litigation. 

This resolution sets a precedent for handling disputes over foundational blockchain technologies, balancing intellectual property protection with the open-source ideals that drive innovation in the crypto space.

In summary, DEF’s acquisition of the patent from True Return Systems marks a significant step toward resolving conflicts in the DeFi sector. 

By making the patent publicly available, DEF aims to foster an environment where developers can build freely, reinforcing the core values of decentralization and innovation in the blockchain community.