The DeFi Education Fund (DEF), a decentralized finance advocacy organization, has taken action to challenge a patent owned by True Return Systems, which it accuses of being a “patent troll” — a company seeking to profit through patent-related lawsuits.
In a tweet dated September 11, DEF revealed that on September 7, it submitted a petition, spanning over 90 pages, to the Patent Trial and Appeal Board, requesting a review of a patent held by True Return Systems.
This patent, granted in 2018, lays claim to a process described as “linking off-chain data to a blockchain,” as explained by DEF’s legal chief, Amanda Tuminelli, in a Twitter post on September 11.
Tuminelli alleged that True Return Systems had attempted to sell its patent as a nonfungible token (NFT). When no buyer emerged, the company initiated legal proceedings against DeFi protocols MakerDAO and Compound Finance in October. According to Tuminelli, True Return’s objective was to target defendants who would be unable to respond to the complaint, thus securing a default judgment.
Furthermore, Tuminelli asserted that True Return would seek to enforce the court’s ruling against token holders and repeat this process with other protocols that lack the means to challenge them in court or lack the necessary resources.
DEF argued that the technology outlined in True Return’s patent was not innovative at the time of its grant and highlighted the existence of similar technology, including the InterPlanetary File System (IPFS) and decentralized storage platforms like Sia, Storj, and Swarm.
The organization initiated the petition with the United States Patent and Trademark Office (USPTO) to safeguard the ability to use and develop open-source software, prevent potential lawsuits by True Return against cryptocurrency projects, and support the legal defense of MakerDAO and Compound.
True Return Systems has the option to respond to the petition within three months, and after six months, the USPTO will decide whether to proceed with a review of the patent. The final decision on whether to cancel the patent will be made within 12 months by the USPT.