DeFi Protocol Bancor Sues Uniswap for DEX Smart Contract Patent Infringement

DeFi protocol Bancor has filed a patent infringement lawsuit against Uniswap Labs, accusing them of unlawfully using its foundational decentralized exchange technology.

The lawsuit was filed by the Bprotocol Foundation, a nonprofit supporting the development of the Bancor Protocol. It was also filed by LocalCoin Ltd., Bancor’s original developer. They alleged that Uniswap Labs and the Uniswap Foundation have unlawfully utilized their patented Constant Product Automated Market Maker (CPAMM) technology.

Bancor Accuses Uniswap of Unauthorized Use of Patented Technology

Bancor asserts that it pioneered the CPAMM model in 2016. The goal was to facilitate automated, permissionless token swaps without the need for centralized intermediaries. The project detailed this innovation in a white paper, predicting it would significantly influence decentralized trading. In January 2017, the organization filed a provisional patent for this innovation and secured two U.S. patents.

Following its launch in June 2017, the Bancor protocol became the first fully decentralized exchange powered by automated market makers. Instead of order books and market makers, this technology uses smart contracts to allow direct trading between buyers and sellers. This innovation laid the groundwork for modern DEX operations.

Bancor protocol further contends that Uniswap’s protocol, introduced in November 2018, incorporated the CPAMM design without authorization, license, or partnership. The project noted that Uniswap has utilized this technology for eight years, thus infringing on their intellectual property rights.

As a result, Bancor is seeking damages for what it describes as Uniswap’s unauthorized use and inducement of infringement. Mark Richardson, Project Lead at Bancor, emphasized that the lawsuit seeks to protect its technology. He stated that this legal move is fundamental to the ecosystem’s health.

“We have taken legal action to defend our technology for the good of the entire DeFi community. As innovators and inventors, protecting our intellectual property is fundamental to the health of the ecosystem. If companies like Uniswap can act unchecked without consequence, we fear it will hinder innovation across the industry to the detriment of all DeFi players,” he added.

Following the lawsuit announcement, Uniswap’s token, UNI, experienced a mild drop of 2.43%. At the time of writing, the asset trades at $5.02.

The post DeFi Protocol Bancor Sues Uniswap for DEX Smart Contract Patent Infringement appeared first on Cointab.