Decentralized exchange Uniswap has won a significant procedural victory in the early stages of claims brought by entities affiliated with rival project Bancor. The ruling, issued by a federal judge in New York, could shape future disputes over software patents.
The lawsuit, filed in May 2025 by Bprotocol Foundation and LocalCoin Ltd., alleged that Uniswap’s decentralized exchange used patented mechanisms, specifically the constant product automated market maker (CPAMM) model, without authorization. Bancor argues that its model was covered by its patent and sought damages for infringement.
Following this announcement, sources cited a written opinion made public on Tuesday, February 10, which noted that John Koeltl, a Judge of the United States District Court for the Southern District of New York, approved the defendant’s motion to drop the case earlier raised by Bprotocol Foundation and LocalCoin Ltd. against Universal Navigation Inc. and the Uniswap Foundation.
According to the judge’s memorandum opinion, the patents at issue “claim abstract ideas” and thus do not qualify for patent protection under US law. Necessary elements, such as an “inventive concept” that would elevate them into patentable subject matter, were not present, the court found.
Uniswap wins the first round in court against the Bancor patent lawsuit
In Uniswap’s case, reports noted that the court found the patents merely cover the abstract idea of cryptocurrency exchange rate calculations. Their finding implied that these patents failed to meet the US Supreme Court’s two-step framework for patent eligibility.
While this ruling represents a legal victory for Uniswap, it is worth noting that this decision remains subject to further appeal. In the meantime, reports mentioned that the case was dismissed without prejudice, giving the plaintiffs 21 days to file a revised complaint. Upon expiration of this period, the dismissal will be considered final.
On the other hand, Hayden Adams, the CEO of Uniswap, shared a brief post on X just after the court’s ruling, stating, “A lawyer just told me we won.” Given that a final judgment has not yet been issued, reporters reached out to Bprotocol Foundation and Uniswap for comments on the matter. However, they declined to respond to the request.
Even so, sources cited an earlier statement in which Bancor alleged that Uniswap had breached patents related to a constant-product automated market maker system used in decentralized exchanges. The argument centered on whether Uniswap’s protocol improperly used patented technology to automate token pricing and manage liquidity pools.
Still, Koeltl maintained his argument that “the patents dealt with the abstract idea of calculating currency exchange rates to carry out transactions.” He further elaborated that, “currency exchange is a basic economic practice. Figuring out pricing information is considered abstract based on established Federal Circuit rules.”
Judge Koeltl warns against applying an abstract idea to blockchain technology
Koeltl rejected the argument that implementing a pricing formula on blockchain technology makes the patents eligible for protection. According to him, the patents use established blockchain and smart contract technology to address economic issues predictably.
To further elaborate on his argument, the New York federal judge noted that simply applying an abstract idea in a certain technical setting is ineligible for a patent.
Moreover, the court ruled that the abstract idea lacked a sufficient inventive concept to render the abstract idea patent-eligible. Besides patent eligibility concerns, the court determined that the updated complaint failed to adequately allege direct infringement.
Meanwhile, the memorandum highlighted that the plaintiffs failed to show how Uniswap’s public code included the reserve ratio constant specified in the patents.
Reports noted that the judge also found no merit in the claims of induced or willful infringement, concluding that the complaint failed to convincingly demonstrate that the defendants were aware of the patents prior to the lawsuit.
Source: https://www.cryptopolitan.com/uniswap-wins-early-legal-battle/
