Bancor Sues Uniswap Over Key DEX Patent Claims

Bancor's developers have launched a legal battle against Uniswap Labs and the Uniswap Foundation.

A lawsuit has been launched by Bancor’s developers against Uniswap Labs and the Uniswap Foundation.

The lawsuit, which was filed on Monday by Bprotocol Foundation and LocalCoin Ltd. — the nonprofit and original developer of Bancor — in the U.S. District Court for the Southern District of New York, accuses Uniswap of using Bancor’s patented decentralized exchange technology without acquiring the necessary licenses.

At the heart of the dispute lies the constant product automated market maker (CPAMM) model, which Bancor claims to have invented and obtained U.S. patents for in 2017. This model facilitates permissionless crypto trading through smart contracts, a crucial aspect of decentralized finance (DeFi).

According to Bancor’s complaint, Uniswap’s own protocol, launched in 2018, utilized the same CPAMM structure that Bancor developed and patented. However, Uniswap allegedly deployed this design without securing a license for the technology from Bancor.

As a result of deploying that technology, Uniswap allegedly “profited greatly,” while Bancor claims it never received any compensation for the use of its invention.

If the court decides in favor of Bancor, this case could have significant implications for how intellectual property rights are viewed in the context of open-source blockchain protocols, and it could also raise questions about the ownership of innovation in the DeFi space.