In a recent court case in the United States, bitcoin miners Marathon Digital and Core Scientific are being sued by Mali Kie Innovations over alleged use of its intellectual property.
Background of the Lawsuit
Patent Acquisition: In 2023, Mali Kie Innovations acquired 32,000 “non – core” patents from BlackBerry. It claims that the elliptic curve cryptography (ECC) employed by the bitcoin blockchain is covered by these patents.
Targeted Miners: Marathon Digital and Core Scientific are major bitcoin mining firms. The lawsuit alleges that they are using ECC – based cryptographic methods covered under Mali Kie – held patents to support their bitcoin mining operations.
Claims and Potential Impact
Claims: The lawsuit states that the case centers on ground – breaking innovations in elliptic curve cryptography that were later recognized and selected by the designers of bitcoin. If the plaintiffs prevail, they could recover up to six years of lost royalties.
Potential Impact: If Mali Kie wins the case, it could establish a favorable precedent for pursuing cases against other miners in the United States. This might undermine the security of the bitcoin network and have disastrous consequences for bitcoin. However, some believe that Mali Kie is more likely to try to extract a fee until the patents expire, rather than tank the entire industry.
Legal Opinions
View of Aaron Brogan: Aaron Brogan, founder and managing attorney at Brogan Law, said that it is unlikely that such lawsuits will affect most individual bitcoin users, even if the patents are found to be valid. Miners are wealthy targets and tend to attract lawsuits because they have money.
View of Niko Demchuk: Niko Demchuk, head of legal at cryptocurrency compliance and forensics firm AMLBot, said that Mali Kie’s claim may not be strong if the asserted patents are expired or cover techniques that predate bitcoin’s ECC implementation. Even if some patents remain active, their scope is likely limited to specific implementation details, not the core ECC algorithms used in bitcoin. However, the outcome depends on the details of specific patents asserted and the court’s interpretation of their scope.
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