Bitcoin mining protection from patent trolls

Introduction: Patent trolls targeting Bitcoin mining

The use of elliptic curve encryption (ECC) by Bitcoin has attracted the attention of non-practical entities (NPEs), which are essential for generating important pairs and verifying digital signatures, and are more commonly known as patent trolls. In May 2025, Malikie Innovations Ltd., a troll with thousands of patents from Blackberry’s portfolio, filed a lawsuit against leading mining companies Core Scientific (CORZ) and Marathon Digital Holdings (Mara). (Mara regarded it as the original patent troll itself, and therefore expresses Shaden Fluid in the current attack.) Marikey claims routine Bitcoin operations (such as validating transactions with ECC-based signatures) that infringe several ECC-related patents originally developed by Certicom (owned by Blackberry). The patent covers accelerated digital signature verification, finite field mathematics optimization, and other ECC improvement techniques.

The Malikie lawsuit calls for an injunction against damages for past infringement and further use of patented methods in the Eastern District of Texas and the Western District of Mala against the Colts and the Western District. Essentially, Marikey is trying to impose a license regime on Bitcoin’s core cryptographic features. This is a move that could set a dangerous precedent for the industry as a whole. If Malikie is successful, effectively anyone running Bitcoin software (the potential for miners, node operators, and even wallet providers) could be exposed to patent liability. The threat has sparked the Bitcoin and the open source community and explored all the defensive tools available. In this preparatory briefing, we investigate as follows:

1. Historical legal strategies used to dodge troll cases.
2. Mechanics, cost, and effectiveness of Inter Partes Review (IPR) in challenging software/cryptography patents.
3. Community-led responses to assist defendants by funding advance searches or legal defenses (e.g. EFF, Linux Foundation, Copa).
4. The potential impact of Bitcoin mining if Malikie’s claim wins draws similarities from other industries.

1. Historical Strategies for NPE Patent Litigation

Over the past 20 years, tech companies and industries have developed several tactics to combat patent trolls. Key strategies include challenging the validity of a patent, moving the case to a favorable venue via declarative ruling lawsuits, leveraging recent case law to dismiss abstract patents, and refusing to settle it simply to block trolls.

Although not all strategies apply to these cases, we outline these approaches for integrity.

Strict Invalidation Challenges (Previous Art – §102/103): The most direct way to neutralize a troll’s patent is to demonstrate the patent It should not have been allowed in the first place This is because previous techniques already teach the same invention. The defendant searches previous art such as previous publications, academic papers, standards (RFCS), or open source code before the priority date of the patent and discloses the claimed invention. If a single previous art reference embodies all elements of the claim, the claim is “expected” (invalid to a lack of novelty based on 35 USC §102). If no one is completely complete, but the combination of references is clear to skilled persons, the claim is invalid for triviality (§103). For example, in the case of Malikie, Bitcoiner was invoked to urgently collect publications by January 18, 2005 (priority date of one claimed patent US 8,788,827), until December 31, 2001 (for US 7,372,960). To prove that patented ECC techniques are already known. The Bitcoin community has pointed out that Hal Finney and others have actively tracked ECC patents and even delayed certain optimizations of Bitcoin until the patent expires. For example, the famous “GLV inner membrane” speedup was added to Bitcoin core after the patent was wrapped (and the caution about the issue of GLV was that Malaki himself complained). Unearthing such pre-art art not only wins the case at hand, but may invalidate the patents of everyone.

• Inter Partes Review (IPR) and post-grant procedures: Since 2012, in addition to increasing invalidity in courts, the defendants have relied on IPR at the Patent Trials and Appeals Committee (PTAB) as a strong forum for knocking out bad patents. IPR is invalid that the challenger is unable to present a patent granted by presenting a previous patent or publication. Although we have detailed the mechanism of IPR in Section 2, historically it has been a preferred tool for NPES due to its high success rate (approximately 70% or more claims are cancelled at the time of review), and “estecast prevailing” (estecast prevailing”, not “clear and persuasive”, but 75%). Companies sued for trolls often file IPR petitions early and remain (or suspends) in lawsuits until they hold off on the PTAB decision. This is a stay that many courts will grant after the IPR is established, taking into account the possibility that the patent will be invalidated. In particular, in the Landmark’s personal audio “podcasting patent” case, the Electronic Frontier Foundation (EFF) filed an IPR that invalidated the troll’s patent for podcast distribution, even if the troll had sued the East Texas podcaster. The IPR was funded by more than 1,000 small contributions from the community, culminating in 2015 with the Patent Office, cancelling all claims for the patent, and was later affirmed to appeal. This victory protected not only the sued target (like comedian Adam Karola), but not all the podcasters going forward. Similarly, the best path for the Bitcoin ecosystem could be to submit an IPR (or related post-grant review) to Malikie’s ECC patent from the 1990s to the early 2000s.
• Declarative Judgment (DJ) Action: Another defensive tactic is to preempt the troll by filing a declarative ruling case with your preferred court, seeking a ruling that the product is not infringed or that the patent is invalid. Under US law, companies that feel threatened by patents (for example, receiving letters of demand or seeing them sued) can first sue if they can show considerable controversy. The goal is to avoid appearing at selected NPE venues (historically the Eastern Texas district was supported by trolls), and instead file a lawsuit on a more neutral or defendant-friendly forum. For example, when the infamous Troll Lodsys threatened dozens of small app developers over in-app purchase patents, one strategy (indirectly supported by Apple and Google) was to undermine the jurisdiction of the trolls in search of a declarative ruling outside of East Texas. In reality, DJ action can encourage settlements at faster resolutions and better conditions. However, the owner of the patent must have made concrete infringement assertions to establish the necessary “case or controversy.” In the situation in Malikie, if they suspect that other Bitcoin companies (exchanges, wallet providers, small miners) are next in line, they can file declarative lawsuits in the jurisdiction of choice. This could turn the script upside down, Malikie becomes the accused, and fights in the forums may not be much favorable for NPEs.
• Movement to dismiss under Alice (35USC§101): Since 2014 Alice Corp.v. CLSBank Decisions, many software patents have been invalidated early in the litigation to claim unpatentable abstract ideas. The court is currently examining whether patents are directed towards basic abstract ideas (such as mathematical formulas) without “original concepts.” Defendants often file a Rule 12(b)(6) claiming that a patent under §101 is invalid in its face and to dismiss it. Cryptographic algorithms can be considered mathematical calculations (classic abstract ideas), but Alice’s success in the move depends on how the patent claim is drafted. If a claim simply covers the concept of using ECC in a generalized formula or computer, the judge can override them as abstracts. Certainly, some defendants have beaten the trolls like this, saving the costs of the trial. In Malikie’s case, their patents seem to cover a specific technique to speed up “technical improvements” (and undoubtedly, intimately optimized modality, etc.) rather than a naked abstract idea, perhaps not an “technical improvements” in encryption. It may not be easier to make Alice’s challenge, but it still remains an option to explore. At the very least, raise §101 defense and save it later and signal to the court that the validity of the patent is questionable for multiple reasons.
• Fight to verdict “Never solved”: The aggressive strategy that some companies have put in place is simply to refuse a settlement and force them to prove the case in court, even if the trolls mean expensive trials. The rationale is that paying back the troll will lead to more lawsuits (marking simple marks), while a court victory will not only end the case, but also thwart future attacks. Newegg pioneered this approach with Tech Sector, facing a series of patent trolls in the early 2010s. Newegg adopted the Zero Village policy. In one well-known example, Newegg fought against Sobrain Software, which claims to own an online shopping cart, and throughout his appeal, he voided patents and won the Federal Circuit, freeing the entire e-commerce industry from its threat. Similarly, the web services company CloudFlare was sued by an NPE called Sable Networks, and refused to resolve the issue even if others paid their licenses. CloudFlare not only went to trial (winning the defensive verdict), but also launched Project Jengo. Any Patents in Sable’s portfolio. This aggressive counterattack has led to surprising results. Not only did Sable lose it in court, he ultimately agreed to end the lawsuit with CloudFlare and waive the patent to the public domain. The message was clear: Troll chooses to fight with the determined defendant risks losing the entire armory. Of course, this approach requires deep pockets and high risk tolerance. Patent litigation costs can easily reach millions of dollars, as patent attorney Bill Fowler points out. “There is no patent minor claim court.” – Even relatively small infringement cases require costly expert witnesses and extensive discoveries. Thus, while fighting a bitter end can benefit the industry as a whole, it is often only feasible for large corporations and companies with financial support from communities.
• Joint Defense and Industrial Union: When a patent troll sues multiple companies for the same patent, the defendants often form a joint defense group to pool resources. They can share previous art studies, coordinate legal strategies, and file unified movements (if necessary). Some industries are going even further by creating defensive coalitions. For example, the Linux Foundation’s Open Invention Network (Oin) is a consortium in which members cooperate and defend against attacks on Linux/Open Source systems. In 2019, when NPE sued the Gnome Foundation (a non-commercial open source project) against photo-managed patents, Oin and others reflected in Gnome’s aid, provided legal advisors and delved into prior art to override troll patents. This united front not only helped GNOME achieve successful results (the Troll Rothschild patent images were ultimately stripped of all rights), but also sent warnings to other trolls targeting open source projects. We see a similar coalition spirit in the realm of Bitcoin. Community leaders are calling for “engage in the Bitcoin Legal Defense Fund to support funding or assistance,” a coordinated defense against Malikey. From current and past core developers, current and past core developers, who provide technical evidence that Bitcoin deliberately circumvents patented methods to nonprofits that bring legal expertise, the industry can bolster each defendant’s case.

In summary, the industry hit by patent trolls will invalidate patents if possible (via courtroom or previous art in PTAB reviews), challenge the troll’s chosen battlefield (through declarative litigation or venue battles), invalidate patents, leverage legal precedents (Alice’s moves), knock out weak claims early, and share costs and knowledge. These strategies have repeatedly slowed NPE campaigns in the past, and are directly related to the Marikie litigation.

2. Interparty Review: Mechanics, Costs, and Effectiveness in Technical Cases

One of the most powerful weapons against suspicious patents is the Inter Partes review process. An IPR created by the American Innent Act of 2011 can anyone (usually the accused defendant, but may be a stakeholder) challenge the validity of approved patents at the US Patent and Trademark Office. Here’s how IPR works, especially for software and cryptographic patents, it has become a go-to defense:

• IPR mechanism: To initiate an IPR, the petitioner will file a detailed petition with the PTAB (Administrative Court of Professional Patent Judges) to explain how the claim is invalid in light of previous patents or printed publications. In particular, IPR can only use previous patents or printed publications (without live testimony or other evidence), making it a focused pre-fight. You must submit a petition Within a year They are sued for infringement (if applicable) and are usually targeting the most important claims that the trolls are claiming. The owner of the patent will have the opportunity to file a preliminary response. The PTAB determines whether the challenger has demonstrated a “reasonable possibility” to win at least one claim. If yes, the board will “laborate” the IPR and from that point onwards a one-year trial clock will begin (can be extended by six months for good reason). During this exam phase, both parties will submit briefs, expert declarations and sometimes oral hearings. Finally, the PTAB will issue a final written decision, usually on the grounds of expectation or obviousness, which determines which claims are invalid.
• Lower cost and faster timeline: The IPR was designed to be faster and cheaper than court cases. A typical IPR from start to finish lasts around 18 months compared to a multi-year court case. The cost is not trivial, but it is often a single order of magnitude lower than fighting a full ju trial. The application fee for an IPR (for up to 20 claims) can range from about $20,000 to $30,000, with legal costs potentially in the hundreds of thousands of dollars. In contrast, protecting a patent case through trial costs millions of dollars. This difference in cost is why even medium-sized and start-up companies were able to mount IPR challenges with support from outside organizations. For example, EFF’s Save Podcasting campaign raised approximately $80,000 from the public in particular to fund IPR for Personal Audio’s podcast patents. In the crypto space, the newly established Crypto Open Patent Alliance (COPA) or the Bitcoin Legal Defense Fund could similarly bankroll IPRs to protect open source developers and businesses from Malikie’s claims. The relatively manageable costs make IPR an attractive collective effort.
• Effectiveness and success rate: IPR has proven to be extremely effective at invalidating suspicious software and technology patents. Since its inception, statistics show that the majority of IPRs established have cancelled claims. Recent data (2023-2024) show that petitioners have managed to override a challenged claim of approximately 70-80% when the IPR reaches a final decision. This is because patents reaching the IPR are often “low hanging fruits” and often should not have been given to previous art in the first place. Additionally, PTAB examiners are more technically skilled than rhetoric, with a strict focus on issues of patentability and tend to sway with rhetoric. Given the academic roots of Bitcoin (the Bitcoin whitepaper itself cites previous works, and the ECC has decades of literature), it is possible that we can discover an IPR that has well prepared previous ARTs that the original patent examiner missed. At this point, it is important to note that the majority of patents are being tested for major merits. Single USPTO employee. In the case of Marikie, their patents originated in the early 2000s. Already, researchers have pointed to early cryptographic conferences and NIST publications that may predict these “innovations.” If such a reference is presented to the PTAB, then it is likely that the PTAB will agree to the patent. Should not be issued Cancel related billing.
• IPR vs. Court Cases – Important Differences: The main reason defendants prefer IPR is the lower burden of proof. IPR must show invalidity The dominance of evidence (I was exactly >50% satisfied). However, in district court trials, the patent is presumed to be valid by the statute (35USC §282) and the challenger must provide it. Clear and convincing evidence (higher standards, often similar to above 70%) to ry approve it to judges or judges. This disparity means that even if you have solid previous art, the ju appellate is still on the side of the patent holder in close proximity, while the PTAB is more likely to invalidate the claim under more generous standards. Furthermore, juju (particularly in Texas, at least historically…) is generally reluctant to invalidate patents. PTAB had no such unwillingness and was called “Patent Death Unit” by some patent owners. That being said, it is worth noting that recent policy changes are being made. The current leadership of the US patent and trademark offices makes IPR a little more difficult and aims to curb some of the challenges that support patent owners (the “pro-subject stance”). IPR discretionary denials (for example, when parallel court cases are on track) are on the rise. Bill Fowler’s commentary in June 2025 pointed to the establishment of policies that Secretary of Commerce Lutonic had enacted to strengthen the practices of IPR agencies, urging several challengers to view the old ex parte reexamination process as an alternative. Ex Parte Reexam is another patent office that goes on to rethink the validity of a patent (no strict one-year time bar), but challengers are unable to participate after submitting their request. Some defendants pursue both Route: submit an IPR (if not time banned) for fast, hostile testing, and at the same time submit an Ex Parte Reexam as a backup to maintain pressure on the patent, even if the IPR is rejected or the challenger settles later.
• Context Cost: In the case of IPR, more than $300,000 is not a pocket change, but it is often part of the potential damages or the cost of continuing litigation that is at risk. For example, Marikey reportedly seeks royalties from miners for up to six years (Chapter 11 bankruptcy means Corz is not exposed to this). If these royalties are hypothesized to be $50 million, spending hundreds of thousands on IPR to eliminate that liability (or gain leverage to resolve it for the nuisance) is a wise investment. However, small startups and open source projects probably can’t afford that much, so trade associations could step in. It turns out that crowdfunding and pooled funding are enabling IPR. Beyond the EFF podcast patent IPR, there was a unified patent (called “anti-trolls”). Unified often collects annual membership fees from member companies and then challenges patents that threaten the industry of those companies, and operates without additional costs to individual members. In fact, in the second half of 2024, COPA (Crypto Open Patent Alliance) announced a partnership with unified patents and launched a “Blockchain Zone,” which challenges NPE held blockchain and crypto-related patents. This means that if a patent like Malikie poses a serious threat, a unified patent can file an IPR petition on its own initiative funded by a broader alliance that saves individual defendants’ money. Uniform boasts of it You will not pay for trolls And simply invalidate their patents and remove incentives for future attacks. In Copa’s view, this active use of IPR and other challenges is essential. Because, with 58% of all US patent litigation in the crypto/blockchain sector coming from NPEs, he is a phenomenal person who highlights how important patent defense is to the crypto community.
• IPR Results – So what? If the IPR is successful, the claim will be invalidated (on the appeal is exhausted) and Marikie or other trolls will not be able to assert those claims against anyone. This advantage is the industry as a whole. Unlike a settlement or victory in a single lawsuit that affects only parties, an IPR victory knocks out a patent from the system. If the IPR fails (for example, finding valid claims in previous arts where the PTAB was presented), the court case still progresses, but the defendant loses the ability to reuse the same previous ART arguments in court (IPR ESTOPPEL applies to ground that could have been raised or reasonably nurtured). Still, the defendants often take shots with IPR, as victory is very decisive, the burden of proof is much lower, and the forum is more educated on these issues. In the case of high stakes, the defendant may pursue both IPR and traditional ineffective defenses in parallel (each raising different predecessor art to avoid duplication of estoppel). Also, if an IPR petition is rejected at the agency stage (if it may occur for procedural reasons or insufficient suggestion), the defendant has not been suspended at all and may litigate validity in court as if the IPR had not been filed. Therefore, IPR filings are usually a simple defense in modern patent litigation, and it is very likely that core scientists and marathons (or alliance groups like COPA/integration) will prepare IPR petitions regarding the ECC patents that Malikie claims.

In short, the IPR reshapes the troll battlefield of patents by giving defendants a powerful and efficient way to override patents other than the uncertainty of the ju trial. Especially for software and encryption patents, where there is a rich background of academic pre-art, the IPR process has turned the arena to technology innovators away from shell companies that use old patents.

3. Community-Driven Answers and Industry Support Network

Beyond formal legal tools, an equally important aspect of combat patent trolling is the mobilization of community and industry support structures. In many NPE showdowns, collective action and public interest initiatives have made the difference between the one-off defendant being forced into settlement and the united front that negates the trolls’ campaign. Here we explore how partnerships between the open source community, advocacy groups and industry contribute to defense against patent trolls.

• Pre-Crowdsourcing Art Search: The global developer and academic community can be an invaluable resource for finding previous art, especially for patents in niche technology fields. Patent trolls rely on the fact that individual defendants may not have the time or expertise to dig into obscure meeting papers or source code from decades ago. However, when calls for action are issued, experts around the world often volunteer to lead volunteers. EFF has a long history of organizing these efforts. In the personal audio case, EFF has issued a public request for evidence of technology like pre-1996 podcasts. Submissions have been poured in, including old Usenet posts and early Internet radio projects. Similarly, in 2017 CloudFlare’s project Jengo provided cash prizes for previous art all Not only are the troll’s patents, but not the ones who have been declared, but also the script is turned over and the troll is placed on defense. I personally sought such a burnt earth approach and believe that such a vigorous response is not only guaranteed, but necessary. This approach is already seen in the Bitcoin context. Bitcoin developers and enthusiasts are actively looking for art that pre-Malikie’s patents. By pooling such knowledge through forums and organized initiatives (pre-Bitcoin art repository for the ECC and other core technologies), the community can reinforce cases of ineffectiveness. Dan Sanchez edited previous art and explicitly issued it by building and researchers uniting and calling the weapon to “remove these (patent) claims” and highlighting it. “What kind of builder is you’re at risk!” This kind of rallying cry is reminiscent of past open source communities, for example, when patents in GIF image format threaten the use of the open web, when developers create unpatented alternatives (PNGs) and share workarounds until the patent expires. It’s a combination of Defense Documents And morale buildings show the troll that the community is not easy prey.

• Bitcoin Legal Defense Fund: In January 2022, Jack Dorsey and others announced Bitcoin’s Legal Defense Fund, initially announced to support core Bitcoin developers who are facing frivolous lawsuits (like Craig Wright’s claims). Its main focus has been on protecting open source developers from harassment and liability, but the fund could extend to patent issues where necessary. The order is to financially support the legal defense of Bitcoin ecosystem participants who cannot afford it. The patent warfare definitely fits that description for small businesses and individual developers. These community-funded efforts create safety nets. They guarantee that smaller Bitcoin mining operations or wallet startups struck by patent litigation will choose to go bankrupt in the lawsuit or pay unfair license fees. Instead, they can get help in achieving proper defense.

• Copa (Crypto Open Patent Alliance): Copa deserves special attention. Founded in 2020 by Fintech and crypto companies (as a member of the founding of Block, Coinbase, and others), Copa has two missions. We pledge that our members will not aggressionately claim their crypto-related patents, and encourage them to actively challenge patents that threaten the community. Copa is taking on a already high-profile fight by suing Craig “Faketosi” Wright over Bitcoin whitepaper copyright/claims (and won a British court that ruled Wright’s claims were false). In the patent trol sphere, a partnership between Copa and unified patents led to the creation of the aforementioned blockchain zone, explicitly targeting the NPE Held patents of the blockchain. Copa’s chief lawyer states that “We need to stop patent trolls so that the community can continue to build.” And the Copa offers its members “free pass-through protection.” This means that if a member of COPA (such as a small Bitcoin company) is sued, then a unified COPA will handle the IPR or litigation and effectively protect the members. Malikie’s wide net is exactly the scenario where Copa was created, in the sense that Bitcoin infrastructure company is not secure. You can expect Copa to gather member companies (over 300 people in the second half of 2024) to share their previous art and submit a brief or petition for the collective Amicus. They may even get a license to negotiate as a block, but given Copa’s attitude, they are more likely to fight than they pay.

• Public consciousness and stigma: Community responses aren’t just behind the scenes. There is also value in controlling the story. Patent trolls often operate in the shadows and pressure the target to quietly sign a license. Calling them publicly can undermine their strategy. We see Bitcoin media and influencers doing just that. It clearly refers to Marikey as a patent troll and frams the lawsuit as an attack on the Bitcoin network rather than a legitimate claim. This story places moral pressure on Malikie. If they push too hard, repulsion or even legislative attention will be at risk. It happened before: when NPEs began sending large numbers of requests to small businesses to use Wi-Fi (the infamous Innovatio case), it gained negative coverage and, ultimately, major Wi-Fi device manufacturers stepped in to protect their customers. In another case, Vermont sued MPJH scanner trolls for violating consumer protection laws by sending misleading demand letters to local businesses. Other states, such as North Carolina, have passed strong anti-intrusion laws that have been upheld in court. In the crypto world, describs or regulators can rally together to scrutinise the situation by portraying Malikey’s campaign as an existential threat to innovation. We already have experts, if Mariki truly enforces that patent widely, “This could undermine the security of the Bitcoin network.” – The dire consequences of regulators and politicians not wanting to be held accountable. Although the patent law is federal, there is a precedent for investigating anti-competitive patent trolls when the FTC abuses malicious, dominant patents. Community protests can encourage such surveillance.

In summary, defense against patent trolls is not just legal applications, but community solidarity and resource sharing. From the legitimate battles of the EFF and the patent pools of Copa to crowdsourcing previous art and joint defense groups, these collective efforts ensure that even those without deep pockets have a fighting chance. The Bitcoin community is very similar to the predecessor open source software community and utilizes these tools. It captivates nonprofits, coordinates through partnerships like Copa, and uses crowd wisdom. This multi-community response can significantly balance Mariki’s claims.

4. The impact of similarities with Bitcoin in other industries

What happens when a patent troll like Marikie succeeds in court despite all the defenses? The impact on the Bitcoin industry, especially small players, is profound, and similar scenarios in other industries provide cautionary material. Here we examine potential fallout and compare it with past results from the technology sector.

• Financial tensions and market exits: The most pressing impact is financial. If Malikie wins and secures a ruling or license agreement, miners and other Bitcoin companies will face ongoing royalties (or large one-off payments). Patent losses may include back royalties (statutory restrictions on past infringement) for up to six years. As lawyer Aaron Brogan pointed out, victory could even risk putting defendants like Core Scientific and Marathons in bankruptcy. For small, medium-sized miners, prospects are tough. Many people operate at a thin profit margin related to BTC price and energy costs. Additional “patent taxes” can make your business unsustainable and force you to close or relocate to a jurisdiction that is not reachable by US patent law. In Bitcoin, some well-capitalized miners may survive the fees, but there is an independent miner pricing that allows for even more centralization of the US mining ecosystem. Opposition of the spirit of decentralization of Bitcoin.
• More litigation precedent: A successful claim by Marikey sets precedents and prevents further litigation. Malikie itself was able to lower the list of targets such as other public mining companies, mining pool operators, hardware manufacturers, and more (if any of the patents covers the side of the mining device or wallet, as Malikie’s complaints suggest). Additionally, other patent trolls may abandon old cryptographic patents in adjacent regions (such as hash algorithms, blockchain networking protocols) as they see the Bitcoin industry “open to business” to patent licensing. This is happening in industries such as semiconductors and smartphones. One troll’s big victory caused a “gold rush” by others who hold similar patents. For example, after NPES successfully extracted settlements from several small mobile app developers, a wave of new demand letters targeting all popular apps has hit the market. The cost of legal defense creates a vicious cycle. Even pure claims can be settled by companies to avoid legal costs, and those settlement dollars fund the troll and sue the next goal. If Malikie proves profitable, it could lead to long-term drugs in the Bitcoin sector, where innovation slows down, as companies will need to allocate budgets to patent licenses or litigation instead of development.
• Future protection measures: Looking forward to it, success over Malikie could spur the Bitcoin community to adopt more systematic safeguards. This may include deeper participation in organizations like COPA. It also leads to patent insurance products aimed at miners and developers, increasing lobbying for changes to patent law (e.g., adding criteria for patent eligibility for pure software, or fees to punish trolls). The outcomes of these cases can even affect how protocol upgrades are approached. It could potentially be a more thorough examination of the risks of a patent, documenting alternatives or advancing explicit patent grants from the inventor (a bit similar to the way the IETF requires patent disclosure on proposed standards). In a sense, the Bitcoin ecosystem could mature its IP recognition, as the Linux community did after the early legal scary.

Conclusion

The conflict between Malikie Innovations and Bitcoin Miner exemplifies the classic conflict between open innovation and legacy Fiat intellectual property rights. History shows that by uniting through community-driven initiatives, from PTAB’s IPR to robust injunctive defenses in court, the industry can dodge patent trolls by using all available legal tools. US law provides mechanisms such as declarative judgment, the challenge of pre-based invalidity, and the Alice test of abstract ideas to defend against excessively widespread or old patents reused by NPES. The Bitcoin community, just like its predecessors, is mobilizing these defenses.

If there is a silver lining, such challenges often bring together the community and become stronger. Weak patents are knocked out, collaboration is enhanced, and a clear message is sent to the troll that this ecosystem is not an easy target. From podcasting to Wi-Fi to Linux, cases in parallel industries show that determined defenses can not only defeat immediate threats, but also set precedents to stop future litigation. Conversely, self-satisfaction or surrender could tax innovation and undermine the growth of Bitcoin technology in key years to come.

Ultimately, the fight against Malikie will depend on demonstrating that Bitcoin’s encryption method is not novel or unique to any company, but comes from decades of public research and joint development. By clearly articulating the story in courts, patent offices and public opinion courts, the defendant and his allies not only protect their own operations, but also maintain the freedom to build and use Bitcoin for everyone. As Paul Growal, Coinbase’s chief lawyer, Copa member, said, “Patent trolls are a barrier to the path of innovation. They must stop so that communities can continue their important business of building a crypto economy.”

In this case, the coming of miners, developers, legal advocates and industry groups is important in determining whether their vision is true or not.

This is a guest post by Colin Crossman. The opinions expressed are entirely unique and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.

This post The Trolls is here. Bitcoin mining defense from patent trolls was first published in Bitcoin Magazine and written by Colin Crossman.