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The DeFi Education Fund (DEF) purchased a patent owned by True Return Systems (TRS) that was the basis of lawsuits against decentralized autonomous organizations MakerDAO and Compound Protocol for infringement.&nbsp;
The <a href="https://patents.google.com/patent/US10025797B1/en" target="_blank" rel="noopener nofollow">patent</a> is for an oracle-like system for “separation and linkage of stacked modular data storage and processing.” DEF will “dedicate” the patent to the public, preventing the patent from being used in similar suits in the future. 
<h2 id="a-patent-for-data-storage-technology">A patent for data storage technology</h2>
DEF characterized TRS as a “patent troll,” that is, a firm that pursues patent claims that may be unfounded. DEF <a href="https://cointelegraph.com/news/defi-group-asks-uspto-cancel-patent-troll-suing-protocols">argued in a September petition</a> to the United States Patent and Trademark Office (USPTO) that the technology TRS had patented in 2018 was already in wide use. DEF listed four technologies that served the same purpose and were created in 2014 and 2016. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/3ddf78be-7089-4dd8-8969-1726d5474da8.png" alt="DEF buys patent to stop lawsuits against MakerDAO and Compound" title="">
 <figcaption style="text-align: center;">
 Technology similar to the TRS patent. Source: DeFi Education Fund
 </figcaption>
</figure>
The USPTO was required to respond to decide in six months whether it would review the patent and make a ruling on whether or not to cancel the patent in 12 months. DEF chief legal officer Amanda Tuminelli said in a statement provided to Cointelegraph:
<blockquote data-ct-non-breakable="true">
 “As a result of our settlement with TRS, TRS will dismiss the legal proceedings against MakerDAO and Compound Protocol. […] As we said when we first brought our petition to invalidate the patent, offensive patenting is antithetical to the ethos of open-source software development.”&nbsp;
</blockquote>
TRS filed complaints against <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.587363/gov.uscourts.nysd.587363.1.0_1.pdf" target="_blank" rel="noopener nofollow">MakerDAO</a> and <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.587374/gov.uscourts.nysd.587374.1.0.pdf" target="_blank" rel="noopener nofollow">Compound Protocol</a> in October 2022, demanding payment of damages from patent infringement and enjoining the DAOs from future use of the subject matter TRS claims.&nbsp;The patent purchase resolves the suits. 
<h3 id="trying-to-profit-off-a-patent">Trying to profit off a patent</h3>
Tuminelli said in a September X post that “TRS’s goal was to name defendants who could not answer the complaint so TRS could get a default judgment and then try to enforce that judgment against token holders. […] Patent trolls pick targets that either can’t challenge them in court or don’t have the resources to do so.”
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/34cddb73-5eef-4d92-8a84-0880d72ad9e4.png" alt="DEF buys patent to stop lawsuits against MakerDAO and Compound" title="">
 <figcaption style="text-align: center;">
 Source: <a href="https://x.com/fund_defi/status/1822989669555912982" target="_blank" rel="noopener nofollow">DeFi Education Fund</a>
 </figcaption>
</figure>
TRS had attempted to sell the patent as a non-fungible token (NFT) on OpenSea in November 2021. It was <a href="https://news.bloomberglaw.com/ip-law/the-trendy-hot-nft-market-has-a-new-entrant-patents" target="_blank" rel="noopener nofollow">believed</a> to be the first time a patent had been tokenized. However, it did not find a buyer. TRS asked 2,250 Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) for the NFT and rejected the single offer it received for it, which was for 0.69 ETH. 
TRS’s website was offline at the time of writing. TRS founder Jack Fonss <a href="https://newcanaanite.com/jack-fonss-61-9693513" target="_blank" rel="noopener nofollow">died</a> in March.
Magazine: <a href="https://cointelegraph.com/magazine/defi-wrong-not-market-synthetix-founders-plan-to-fix-it/">Synthetix founder Kain Warwick: It’s DeFi that’s wrong, not the market</a>

DEF buys patent to stop lawsuits against MakerDAO and Compound

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Cointelegraph

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