Liquid Rarity Exchange LLC v. Securitize Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Liquid Rarity Exchange, LLC (Puerto Rico)
  • Defendant: Securitize Holdings, Inc. (Delaware)
  • Plaintiff’s Counsel: Gellert Seitz Busenkell & Brown LLC; Kean Miller LLP; Tucker Ellis LLP
• Case Identification: 1:26-cv-00698, D. Del., 06/15/2026
• Venue Allegations: Venue is asserted in the District of Delaware on the basis that Defendant is a Delaware corporation and therefore resides in the district.
• Core Dispute: Plaintiff alleges that Defendant’s platform for issuing, managing, and trading tokenized real-world assets infringes patents related to virtual platforms for the fractional trading of unique or rare assets.
• Technical Context: The lawsuit concerns the application of patent law to blockchain-based financial technology, specifically platforms that create and manage digital representations (tokens) of off-chain assets like art, real estate, and private equity.
• Key Procedural History: The complaint alleges that Plaintiff provided Defendant with notice of its patent portfolio on November 10, 2025, followed by detailed infringement claim charts on January 28, 2026. The complaint also details the prosecution history of the ’090 patent, noting it was allowed after an amendment to overcome a 35 U.S.C. § 101 rejection for being directed to an abstract idea. Plaintiff also states it has successfully licensed its patent portfolio to other industry participants.

Case Timeline

Date	Event
2006-11-20	’069 Patent Priority Date
2011-09-06	’069 Patent Issue Date
2015-12-16	’090 Patent Priority Date
2016-03-17	’090 Patent Application Filing Date
2019-11-15	’090 Patent Non-Final Office Action Issued
2020-03-16	’090 Patent Amendment Filed
2020-11-03	’090 Patent Issue Date
2025-11-10	Plaintiff sends initial notice letter to Defendant
2026-01-28	Plaintiff sends infringement claim charts to Defendant
2026-06-15	Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 10,825,090 - “Rarity Trading Legacy Protection and Digital Convergence Platform” (Issued Nov. 3, 2020)

The Invention Explained

• Problem Addressed: The patent’s background section identifies a market failure where small or middle-class investors are excluded from investing in high-value "rarities" (e.g., fine art, classic cars, rare coins) due to high prices and a lack of suitable trading platforms (Compl. ¶18; ’090 Patent, col. 2:48-54). It states that an "effective computer processing platform that can accommodate the needs and peculiar aspects of rarities and their trading...is not believed to exist" (Compl. ¶18; ’090 Patent, col. 3:11-17).
• The Patented Solution: The invention proposes a "Rarity Trading Platform" that functions as a virtual marketplace for fractional shares of these rarities ('090 Patent, col. 4:19-23). The core of this platform is an "Online Merchandising Convergence," a virtual, three-dimensional environment where users can browse and visualize the underlying assets before trading their fractional ownership units, called "raritybits" ('090 Patent, abstract; ’090 Patent, col. 7:8-12). This aims to empower smaller investors by making such assets accessible as fractional shares ('090 Patent, col. 1:61-64).
• Technical Importance: The invention purports to provide a specific technical architecture for creating a liquid, transparent, and accessible market for traditionally illiquid, high-value assets by combining a financial trading mechanism with an immersive virtual visualization environment (Compl. ¶17).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶35).
• The essential elements of independent claim 1 are:
  • A virtual merchandising mart comprising a simulated trading center,
  • wherein a virtual three-dimensional depiction of one or more rarity assets included in a raritymine are configured for visualization by sellers and buyers of raritybits in the raritymine.
• The complaint reserves the right to assert additional claims (Compl. ¶35).

U.S. Patent No. 8,015,069 - “System and Method for Asset Utilization” (Issued Sep. 6, 2011)

The Invention Explained

• Problem Addressed: The patent addresses the problem of asset illiquidity, where owners of valuable tangible assets, such as art held by a museum, cannot access the capital value of those assets without relinquishing physical control or ownership ('069 Patent, col. 3:11-20).
• The Patented Solution: The patent describes a computer-implemented system and method for creating an exchange for tangible assets. The system pools assets, obtains appraisal values, creates fractional ownership units, and facilitates trading of these units over a global computer network ('069 Patent, abstract). A central control manager computer system continuously monitors asset values and can automatically "switch ownership units" based on predefined triggers, creating a dynamic market ('069 Patent, abstract; ’069 Patent, col. 1:49-65).
• Technical Importance: The invention describes an early framework for creating a secondary market and unlocking liquidity for traditionally non-fungible, tangible assets by computerizing the process of fractionalization, valuation, and exchange (Compl. ¶¶54-55).

Key Claims at a Glance

• The complaint asserts independent claims 1 (method), 16 (system), and 23 (system) (Compl. ¶53).
• The essential elements of independent claim 1 (method) include:
  • Introducing a secure central control manager computer system.
  • Programming the system to identify, create, and store art assets and art asset pools.
  • Adapting the system to obtain, store, and display a dynamic art asset appraisal value.
  • Programming the system to create a pre-defined number of ownership units and an initial price.
  • Programming the system to create, manage, and coordinate ownership interests.
  • Creating and transmitting an initial price offering and transacting orders.
  • Continuously identifying and storing art asset pool values and switching ownership units based on triggering events.
• The essential elements of independent claim 16 (system) include:
  • An encryptable central control manager computer programmed to:
  • Identify, create, and store art assets and at least one art asset pool.
  • Identify, store, and display a dynamic art asset appraisal value.
  • Create a pre-defined number of ownership units and an initial price.
  • Create and transmit an asset marketization communication and transact orders.
  • Dynamically identify, store, and compare art asset pool values and automatically switch ownership units.
• The essential elements of independent claim 23 (secure system) include:
  • A secure art asset exchange system configured to:
  • Generate, characterize, and store at least one art asset in a database.
  • Place each art asset in a pre-defined art asset pool.
  • Assign a pre-determined number of ownership units to the art asset pool.
  • Appraise each art asset and pool.
  • Generate dynamic market information based on a comparison of appraisals with market demands.
  • Dynamically determine if the pool value is increasing, decreasing, or constant.

III. The Accused Instrumentality

Product Identification

The accused instrumentality is the Securitize platform, accessible at securitize.io (Compl. ¶11).

Functionality and Market Context

The complaint alleges the Securitize platform is an "end-to-end platform for the issuance, management, and trading of digital securities representing fractional ownership interests in real-world assets" (RWAs) (Compl. ¶11). It allegedly enables issuers and investors to "interact, transact, and exchange tokenized assets in a virtual environment" (Compl. ¶12). A key component of this platform is a regulated Alternative Trading System (ATS) that facilitates secondary trading (Compl. ¶12). The complaint positions Securitize as a "leader in the tokenization of Real-World Assets" (Compl. ¶11) and notes its platform is used by major financial entities like BlackRock and Hamilton Lane (Compl. ¶91).

IV. Analysis of Infringement Allegations

’090 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
A virtual merchandising mart comprising a simulated trading center...	The Securitize platform is described as a "virtual merchandising mart" and "comprehensive end-to-end trading and distribution environment," with its regulated ATS constituting a "simulated trading center."	¶37	col. 7:8-12
...wherein a virtual three-dimensional depiction of one or more rarity assets included in a raritymine...	Securitize allegedly enables "digital representations of traditional investments" which include "three-dimensional visualizations." The complaint provides a screenshot of a "gallery view" as an example of a virtual depiction.	¶38; ¶39	col. 1:19-23
...are configured for visualization by sellers and buyers...	The platform provides dashboards, investor portals, and trading interfaces allowing issuers (sellers) and investors (buyers) to view tokenized assets and ownership interests.	¶44	col. 19:19-24
...of raritybits in the raritymine.	Securitize creates "fractionalized digital tokens" ("raritybits") representing ownership in underlying assets ("raritymine"), which are issued, stored, and traded within the platform.	¶45; ¶46	col. 6:8-15

The complaint includes a screenshot of the Securitize platform's "gallery view" for an offering, which it alleges is a digitally rendered representation consistent with the patent's claims (Compl. ¶39). It also provides a screenshot from a partner platform utilizing Securitize, showing a "Total Showcase" feature for art assets (Compl. ¶40).

• Identified Points of Contention:
  • Scope Questions: A central question may be whether the Securitize platform, a regulated financial system for "digital asset securities," falls within the scope of a "virtual merchandising mart" for "rarities" as contemplated by the patent. The defense could argue these are distinct concepts.
  • Technical Questions: A factual dispute may arise over whether the visualizations provided by the Securitize platform qualify as "virtual three-dimensional depiction[s]" as required by the claim. The evidence presented in the complaint's screenshots will be a focus.

’069 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
A method for obtaining, maintaining and controlling an exchange for tangible assets over a global computer network...	Securitize is alleged to perform a computer-implemented method for exchanging tangible real-world assets via its internet-based platform.	¶55	col. 4:48-52
...introducing at least one secure central control manager computer system...	Securitize allegedly operates a "secure, centralized platform infrastructure (cloud servers, smart contracts, investor portals)" that communicates with users over the Internet.	¶56	col. 18:60-64
...programming the central control manager computer system to initially identify, create and store one or more art assets.	The Securitize platform is alleged to digitally identify and store data corresponding to physical artworks, such as in the Strada Digital Masterpieces offering.	¶57	col. 18:65-19:1
...allowing the central control manager computer system to create and store one or more art asset pools...	The Strada Digital Masterpieces fund on the Securitize platform is identified as an "art asset pool" that pools physical artworks into a single tokenized vehicle.	¶58	col. 19:2-5
...adapting the central control manager computer system to...display a dynamic art asset appraisal value.	Securitize's platform allegedly displays ongoing valuation metrics (NAV) for art funds, which change over time and constitute a "dynamic...appraisal value."	¶59	col. 19:6-13
...continuously and dynamically identifying and storing art asset pool values and switching ownership units based on triggering events.	Securitize allegedly enables secondary market trading where "ownership units dynamically switch among investors in response to market and transaction triggers."	¶64	col. 19:40-43

• Identified Points of Contention:
  • Scope Questions: The term "tangible assets" in the patent may be a point of contention, as the accused platform trades digital tokens that represent tangible assets.
  • Technical Questions: A key factual question will be whether the accused platform performs the specific step of "automatically switch[ing] ownership units...based upon a pre-defined triggering threshold event" ('069 Patent, claim 16). The complaint's allegation that units "dynamically switch...in response to market and transaction triggers" (Compl. ¶64) may be scrutinized to see if it meets the specific automated logic required by the claim.

V. Key Claim Terms for Construction

'090 Patent: "virtual merchandising mart comprising a simulated trading center"

• The Term: "virtual merchandising mart comprising a simulated trading center"
• Context and Importance: This term was added during prosecution to overcome a § 101 rejection, making its construction central to both patent eligibility and infringement (Compl. ¶¶26, 33). The definition will determine whether a regulated financial trading platform like Securitize's can be considered an infringing structure.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patentee argued during prosecution that "mart" means a "trading or trade center, building center, or an exposition for the sale of goods," which could be interpreted broadly to cover any online marketplace (Compl. ¶28). The specification also describes the Online Merchandising Convergence (OMC) as a "forum where both buyers and sellers can virtually exchange images" ('090 Patent, col. 15:40-43), suggesting a general interactive environment.
  • Evidence for a Narrower Interpretation: The patentee also highlighted specific, immersive features to show the invention was more than an abstract idea, such as "holographic image, action and touch" and feeling "haptic G-forces" in a virtual vehicle showcase (Compl. ¶¶30, 32; '090 Patent, col. 19:25-28). The specification repeatedly refers to "virtual 3D format" and "virtual, 3-dimensional manner" ('090 Patent, col. 7:10-11; '090 Patent, col. 7:31-34), which may support an argument that a simple 2D interface is insufficient.

'069 Patent: "automatically switch ownership units"

• The Term: "automatically switch ownership units"
• Context and Importance: This term appears in system claim 16 and is related to a similar limitation in method claim 1. Its construction is critical for determining whether the accused platform's secondary trading functionality meets the claimed requirements. Practitioners may focus on this term because it implies a specific type of automated, non-discretionary action based on predefined rules, which may or may not be present in a standard alternative trading system.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The abstract states the system is "adapted to automatically switch ownership units amongst art asset pools based upon pre-defined triggering threshold events," ('069 Patent, abstract) which could be read to cover any system-facilitated transfer that occurs upon a trigger, including a standard market buy/sell order execution.
  • Evidence for a Narrower Interpretation: The specification discusses a "switching agent" used to "purchase, convert or exchange with other...art assets in order to maximize investor value" ('069 Patent, col. 17:7-11). Figure 13 explicitly depicts an "Art Asset Pool Switching Agent" process where an increase in one asset's value (e.g., Platinum) triggers a sale and purchase of an undervalued asset (e.g., Gold). This could support a narrower construction requiring a specific, automated portfolio rebalancing function, rather than just executing user-initiated trades.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement, stating that Securitize actively encourages and instructs its "Platform Users" (e.g., asset managers, investors) to perform the infringing activities of tokenizing, visualizing, and trading assets via marketing materials, onboarding services, and technical documentation (Compl. ¶¶92-94). It also alleges contributory infringement, asserting that the Securitize "Platform Components" are a material part of the invention, are especially made for infringing use, and have no substantial non-infringing use (Compl. ¶¶101-104).
• Willful Infringement: The complaint alleges willful infringement based on Defendant’s alleged pre-suit knowledge of the patents. It specifically cites a notice letter sent on November 10, 2025, and subsequent detailed claim charts sent on January 28, 2026, after which Securitize allegedly continued its infringing conduct (Compl. ¶50; Compl. ¶88).

VII. Analyst’s Conclusion: Key Questions for the Case

1. A question of claim scope and eligibility: For the ’090 patent, a central issue will be the construction of "virtual merchandising mart." The court will need to determine whether this term, added to overcome a § 101 rejection, requires specific immersive, three-dimensional, and interactive features (as suggested by prosecution history examples) or if it can be read more broadly to encompass a regulated financial platform for trading digital securities.

2. A question of technical operation: For the ’069 patent, the dispute may turn on a key evidentiary question: does the Securitize platform's secondary trading functionality, which executes trades between buyers and sellers, perform the specific, automated functions required by the claims, such as "automatically switch[ing] ownership units...based upon a pre-defined triggering threshold event"?

3. A question of commercial reality vs. patent language: The case presents a fundamental conflict between the conceptual language of the patents, which describe trading "rarities" and "art assets," and the accused platform's operation in the highly regulated world of "tokenized real-world assets" and "digital asset securities." A core issue for the court will be to determine whether the defendant's modern, blockchain-based financial infrastructure is merely a new name for the systems described in the patents, or if it represents a technologically and legally distinct field of art.