Uniswap Dodges Patent Bullet: Crypto Exchange Claims Crumble Under Section 101 (With Olympic Curling Vibes)
Uniswap Dodges Patent Bullet: Crumble Under Section 101 (With Olympic Curling Vibes)
In a big win for decentralized finance (DeFi), a U.S. court just tossed out patent claims against Uniswap. The case highlights a tough truth for crypto inventors: slapping an abstract idea on the blockchain does not make it patentable. This ruling under Section 101 of U.S. patent law serves as a wake-up call for anyone trying to patent crypto trading tech.
What Happened in the Uniswap Patent Case?
The lawsuit, filed by BPROTOCOL Foundation against Universal Navigation (linked to Uniswap), targeted two patents: U.S. Patent Nos. 11,107,049 and 11,574,291. These patents cover a system for swapping crypto assets using smart contracts on the blockchain. They describe a “constant product automated market maker” (CPAMM) that uses liquidity pools and special “LP Tokens” for smooth trades without centralized exchanges.
Key features claimed:
- Smart tokens that auto-execute trades.
- Continuous liquidity from pooled assets.
- Instant price discovery via a math formula.
The math behind it? A simple equation for pricing LP Tokens:
Tp = (Tt × Tr) / Rr
Where:
- Tp: Price of one LP Token.
- Tt: Total LP Tokens in circulation.
- Tr: Assets in reserve.
- Rr: Reserve ratio constant.
Uniswap built a similar protocol, sparking the suit. But Judge John G. Koeltl in New York’s Southern District Court dismissed it. Why? The claims are ineligible abstract ideas under the Supreme Court’s Alice test.
Breaking Down the Alice Test: Step by Step
Section 101 bars patents on abstract ideas, laws of nature, or natural phenomena. The Alice framework has two steps:
- Step 1: Is the claim directed to an abstract idea?
- Step 2: If yes, does it add an inventive concept (something new and specific)?
Step 1: Abstract Idea of Currency Exchange
The court said the patents focus on calculating exchange rates for crypto trades. This is like old-school currency trading—a “fundamental economic practice.”
Claim 1 of the ‘291 patent, for example:
1. Get the status of two crypto tokens.
2. Use that status and a reserve ratio to figure out swap amounts.
Courts have killed similar claims before. Think pricing info or data analysis—classic no-gos under Alice.
Plaintiffs argued: “But it’s on the blockchain!” Court reply: Nope. Using existing tech like blockchains, smart contracts, and crypto (all pre-dating these patents) in routine ways doesn’t help. Patent examiners even called this tech “conventional” and “well-known.”
Bottom line: No tech problem solved, just an economic one using off-the-shelf blockchain tools.
Step 2: No Inventive Spark
Even if abstract, claims need something extra—like a clever tech fix. Here? Nothing.
Plaintiffs hyped:
- Unconventional smart contracts minting tokens for liquidity pools.
- Using two tokens’ amounts for trades.
- Resource savings for crypto swaps.
Court: Those aren’t in the claims. You can’t bootstrap invention from complaints or specs. And the “two tokens” bit? That’s the abstract idea itself.
Infringement Claims Also Flop
Beyond eligibility, pleading failed hard:
- Direct infringement: No proof Uniswap’s open-source code uses the key “Rr” constant. Plaintiffs guessed it equals 1—without evidence.
- Induced/Willful: Knowledge from lawsuit filing date? Invalid. Need pre-suit awareness of deliberate copying.
Dismissal without prejudice means refile possible, but fix these holes first.
Key Takeaways for Crypto Patent Seekers
This isn’t new—courts crush blockchain patents lacking tech novelty. Lessons:
- Claim the tech: Spell out improvements like faster consensus or novel encryption. Don’t hide in descriptions.
- Avoid economics: Pure trading, pricing, or risk hedging? Abstract city.
- Prove infringement early: Open-source DeFi? Analyze code before suing.
- Watch trends: Federal Circuit echoes: Blockchain alone ≠ patentable.
Compare to wins: Patents on specific hardware wallets or zero-knowledge proofs sometimes stick if they solve tech hurdles.
Why This Matters for DeFi and Blockchain
Uniswap’s V3+ thrives. This ruling shields open protocols from weak patents, boosting innovation. But it scares legit inventors—how to protect AMMs, DEXs, yield farms?
Shift to trade secrets, copyrights for code, or international filings. Or focus on hybrids: blockchain + AI or IoT.
SEO tip: Search “crypto patent eligibility” spikes post-ruling. DeFi devs, stay tuned.
A Quick Detour: Olympic Curling and the Spirit of Fair Play
With the 2026 Winter Olympics fresh in Milan-Cortina, let’s tie in some fun. Team USA crushed curling, grabbing 12 golds and 33 medals—a record outside North America. Shoutout Michigan Wolverines dominating the men’s roster (Go Blue!).
Highlight: USA/Italy women’s match. USA accidentally brooms a stone. Rules let Italy remove it, but skip Stefania Constantini consults, agrees with USA, and plays on. Pure sportsmanship!
Lesson for patent fights? Follow the “Spirit of Curling”: Fairness over technicalities. Courts reward clean claims over gamesmanship. Relive those epic stone scrapes—curling’s soundtrack slaps.
Italy’s 30 medals, stunning Alps venues, killer ceremony—top Games ever. USA rules curling (sorry, Canada). World Cup next!
What’s Next for Crypto Patents?
Expect appeals or refilings. Broader impact: More scrutiny on DeFi patents. Innovators, draft tighter claims solving real tech pains.
Case cite: BPROTOCOL Foundation v. Universal Navigation, No. 25-cv-4214 (S.D.N.Y. Feb. 10, 2026).
Stay ahead: Follow DeFi patents, Alice updates. Blockchain’s future is bright—but patents must evolve.
What do you think? Can crypto patents survive Section 101? Drop thoughts below!
