Bprotocol Foundation v. Universal Navigation Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Bprotocol Foundation (Switzerland) and LocalCoin Ltd. (Israel)
  • Defendant: Universal Navigation Inc. d/b/a Uniswap Labs (Delaware) and Uniswap Foundation (Delaware)
  • Plaintiff’s Counsel: Quinn Emanuel Urquhart & Sullivan, LLP
• Case Identification: 1:25-cv-04214, S.D.N.Y., 08/11/2025
• Venue Allegations: Venue is alleged to be proper in the Southern District of New York because Defendants have a regular and established place of business in the district and have committed alleged acts of infringement there.
• Core Dispute: Plaintiffs allege that Defendants’ Uniswap Protocol, a decentralized cryptocurrency exchange platform, infringes two patents related to automated market-making systems that use smart contracts to determine token prices and facilitate exchanges on a blockchain.
• Technical Context: The technology at issue is foundational to the Decentralized Finance (DeFi) sector, enabling automated, on-chain liquidity and trading for cryptocurrencies without relying on traditional order-book exchanges.
• Key Procedural History: The asserted patents claim priority to a provisional application filed in January 2017. The complaint notes that during prosecution of the '049 patent, the examiner found the claims inventive over the prior art's inability to manage exchange rates for an unlimited variety of low-volume tokens. Similarly, for the '291 patent, the examiner noted the inventiveness of the claims' specific computational approach to exchanging smart-contract-generated tokens.

Case Timeline

Date	Event
2017-01-08	Priority Date for '049 and '291 Patents (Provisional App)
2018-11-01	Uniswap Protocol v1 Launched
2021-08-31	U.S. Patent No. 11,107,049 ('049 Patent) Issued
2023-02-07	U.S. Patent No. 11,574,291 ('291 Patent) Issued
2025-08-11	Complaint Filed

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

U.S. Patent No. 11,107,049, “Methods for exchanging and evaluating virtual currency,” issued August 31, 2021 (’049 Patent)

The Invention Explained

• Problem Addressed: The patent’s background section identifies the difficulty of valuing and trading the rapidly proliferating number of new cryptocurrencies ("Tokens") on virtual currency networks (ʼ049 Patent, col. 2:13-15). It notes that traditional valuation methods based on transactions between willing parties, like those used in FOREX markets, are "not viable" for an "unlimited variety of Token types," especially those with limited or no trading volume (ʼ049 Patent, col. 2:16-28).
• The Patented Solution: The invention provides a system, executed on a secure ledger network like a blockchain, that uses a smart contract to algorithmically determine a token's price (ʼ049 Patent, abstract). Instead of relying on buy/sell orders, the price is calculated based on three key parameters: the total amount of the token in circulation, the total amount of a different token held in a reserve, and a predefined "Constant Reserve Ratio" (ʼ049 Patent, col. 14:26-34). This allows for automated, on-chain price discovery and liquidity without a traditional market maker (ʼ049 Patent, col. 14:4-8).
• Technical Importance: This approach provides a mechanism for continuous liquidity and price discovery for niche or "long tail" assets that would otherwise be illiquid on traditional, order-book-based exchanges (Compl. ¶27).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶69).
• Essential elements of Claim 1:
  • A secure ledger network for executing cryptocurrency transactions, comprising at least one hardware processor configured to perform a series of steps.
  • Receiving and validating a smart contract that defines rules for a transaction.
  • Updating a secure ledger with the validated smart contract.
  • Receiving a request to execute a transaction for a first cryptocurrency token.
  • Performing the transaction, which comprises determining a price for the token based on three inputs: (1) the status of the first token (total amount in circulation, Tt), (2) the status of another token (total reserve, Tr), and (3) a "reserve ratio constant" (Rr).
  • The price determination step specifically comprises setting the price using the formula: Price = Tr / (Tt * Rr).
  • Updating the secure ledger upon completion of the transaction.
• The complaint reserves the right to assert additional claims (Compl. ¶66).

U.S. Patent No. 11,574,291, “Methods for exchanging and evaluating virtual currency,” issued February 7, 2023 (’291 Patent)

The Invention Explained

• Problem Addressed: Stemming from the same patent family as the '049 Patent, the '291 Patent addresses the same technical challenge: creating a viable exchange and valuation mechanism for the expanding universe of niche cryptocurrencies that lack sufficient trading volume for traditional markets (ʼ291 Patent, col. 2:12-26).
• The Patented Solution: The '291 Patent describes a similar secure ledger network that uses smart contracts to manage token exchanges (ʼ291 Patent, abstract). While the '049 Patent focuses on the specific formula for determining a price, this patent focuses on the execution of the exchange itself. The core of the transaction involves determining an amount of one token to be obtained in exchange for another, based on the same underlying parameters: the total supply of the first token, the reserve of the second token, and the predefined reserve ratio constant (ʼ291 Patent, col. 25:46-59).
• Technical Importance: This technology enables the functional exchange of assets within an automated liquidity system, defining the mechanics of how much a user receives in a swap based on the algorithmic state of the liquidity pool (Compl. ¶39).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶86).
• Essential elements of Claim 1:
  • A secure ledger network for executing cryptocurrency transactions, comprising at least one hardware processor configured to perform a series of steps.
  • Receiving, validating, and updating the secure ledger with a smart contract.
  • Receiving a request to execute a transaction for a first cryptocurrency token.
  • Performing the transaction, which comprises obtaining the status of the first token (total amount, Tt), the status of another token (total reserve, Tr), and a reserve ratio constant (Rr).
  • The execution further comprises "determining an amount" of one token to be exchanged for the other "based on" these three statuses (Tt, Tr, and Rr).
  • Updating the secure ledger upon completion of the transaction.
• The complaint reserves the right to assert additional claims (Compl. ¶66).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are versions v1 through v4 of the Uniswap Protocol and the associated Uniswap Interface (Compl. ¶62).

Functionality and Market Context

• The complaint describes the Uniswap Protocol as an "automated liquidity protocol" implemented as a system of smart contracts on the Ethereum blockchain (Compl. ¶72). It functions as a decentralized exchange that allows users to swap different cryptocurrencies (Compl. ¶11).
• Instead of an order book, the protocol uses "liquidity pools" where users deposit pairs of assets (Compl. ¶36). The relative price of the assets in a pool is determined by a "constant product formula" (x*y=k), which allows for automated market making (Compl. ¶60). The Uniswap Interface is a web-based graphical user interface that allows users to interact with the underlying protocol to add or remove liquidity and swap tokens (Compl. ¶62; Compl. ¶72).
• The complaint alleges that the Uniswap Protocol is one of the largest and most popular decentralized exchanges, having facilitated trillions of dollars in trade volume (Compl. ¶8; Compl. ¶61).

IV. Analysis of Infringement Allegations

’049 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
A secure ledger network for executing cryptocurrency transactions...	The Uniswap Protocol is described as a system of smart contracts operating on the Ethereum blockchain, which is a secure ledger network, to execute cryptocurrency transactions.	¶72	col. 2:35-37
determining a price of the first cryptocurrency token based on a status of the first cryptocurrency token, a status of an other cryptocurrency token, and a reserve ratio constant...	The Uniswap Protocol determines the price of a liquidity provider (LP) token based on the total supply of LP tokens (Tt), the reserve of a deposited token (Tr), and a reserve ratio (Rr).	¶74	col. 6:13-24
wherein the determining of the price of the first cryptocurrency token comprises setting the price of the first cryptocurrency token as Tr/Tt*Rr.	The complaint alleges the price of a Uniswap LP token is determined as Tr/Tt*Rr, where Rr (the reserve ratio) is asserted to be 1 for liquidity pools with two tokens deposited in equal proportions.	¶74	col. 9:35-42

• Identified Points of Contention:
  • Scope Questions: A central question may be whether Uniswap's system, which is based on a constant product formula (x*y=k), can be said to implement the patent's specific pricing formula, Price = Tr/Tt*Rr. The complaint's assertion that the "reserve ratio constant (Rr)" resolves to '1' in Uniswap's implementation will likely be a key point of dispute (Compl. ¶74).
  • Technical Questions: What evidence will be presented to substantiate the claim that Uniswap's pricing mechanism is equivalent to the patent's formula, as opposed to being a fundamentally different mathematical approach to automated market making?

’291 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
A secure ledger network for executing cryptocurrency transactions...	The Uniswap Protocol and Interface operate on the Ethereum blockchain, a secure ledger network, to execute cryptocurrency transactions like adding liquidity or swapping assets. The complaint provides a screenshot of the Uniswap Interface for adding liquidity to a pool for ETH and USDC (Compl. p. 34).	¶89	col. 2:35-37
perform an execution of the transaction, the execution comprises... determining an amount of at least one of the first cryptocurrency token... based on the status of the cryptocurrency token, the status of the other cryptocurrency token, and the reserve ratio constant...	When a user adds liquidity, the Uniswap Protocol determines the amount of LP tokens to be received. The complaint alleges this amount is computed based on the total supply of LP tokens (Tt), the reserve of a deposited token (Tr), and an implicit reserve ratio constant (Rr) of 1.	¶91	col. 6:23-52

• Identified Points of Contention:
  • Scope Questions: Does the claim term "based on" require the direct use of Tt, Tr, and Rr as inputs in a specific formula taught by the patent, or can it cover any system where the output (amount of tokens) is mathematically dependent on those underlying state variables?
  • Technical Questions: The complaint alleges the amount of LP tokens received is calculated as Tt/Tr multiplied by the amount of a deposited token (Compl. ¶91). The defense may argue that the actual smart contract code for Uniswap implements a different calculation derived from the x*y=k formula, raising the question of whether there is a technical match to the claimed method.

V. Key Claim Terms for Construction

• The Term: "reserve ratio constant (Rr)" ('049 Claim 1; '291 Claim 1)

• Context and Importance: This term is the lynchpin of the patents' technical solution. The infringement allegation hinges on the assertion that this "constant" is effectively equal to '1' in the accused Uniswap Protocol (Compl. ¶74; Compl. ¶91). Practitioners may focus on whether a value that is an emergent property of a system's design (requiring deposits in equal proportions) can meet the definition of a "predefined" or "constant" ratio as described in the patent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The term "predefined" in the claim could be argued to mean defined by the system's logic and rules at the time of its creation, not necessarily as a manually entered numerical parameter ('049 Patent, col. 26:28).
  • Evidence for a Narrower Interpretation: The patent specification provides concrete examples using specific numerical ratios, such as a "Constant Reserve Ratio (e.g. 10%)" ('049 Patent, col. 17:11-12). This may support an argument that the term requires an explicitly set, non-unitary ratio that defines the relationship between reserve and market cap.

• The Term: "secure ledger network" ('049 Claim 1; '291 Claim 1)

• Context and Importance: This term defines the environment where the invention operates. While the complaint equates it with the Ethereum blockchain (Compl. ¶72), the defense could challenge whether a public, permissionless blockchain meets the specific contours of a "secure ledger network" as contemplated by the patent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification explicitly states that the "secure ledger may be a blockchain" ('049 Patent, col. 2:58-59). The patent also describes a network of "various (usually all) participants" which aligns with the nature of a public blockchain ('049 Patent, col. 13:43-46).
  • Evidence for a Narrower Interpretation: The defense may argue that other language in the patent implies a more controlled or private environment than a public blockchain, though the specification provides limited support for such a narrow construction.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement under 35 U.S.C. § 271(b) (Compl. ¶78; Compl. ¶95). The allegations are based on Defendants providing the Uniswap Protocol and Interface to customers, publishing instruction materials, and offering technical assistance, allegedly with knowledge that these actions would cause users to infringe (Compl. ¶78; Compl. ¶95).
• Willful Infringement: The complaint alleges willful infringement based on pre-suit knowledge of the patents and the infringing activity (Compl. ¶82; Compl. ¶99). The basis for this alleged knowledge includes Plaintiffs' status as pioneers in the CPAMM field, Defendants' alleged inspiration from an individual whom Plaintiffs had briefed on their technology, and the publication of the patent applications prior to issuance (Compl. ¶77; Compl. ¶94).

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

• A core issue will be one of claim construction and technical equivalence: can the term "reserve ratio constant (Rr)," which the patent describes as a predefined parameter, be construed to cover a system where this ratio is an implicit mathematical property that allegedly "resolves to 1" as a consequence of the system’s design? The case may turn on whether the complaint's mathematical derivation accurately maps the operation of the accused constant product (x*y=k) system onto the patents' specific formulaic claims.
• A second key question will be one of knowledge and intent. Given the intertwined history of innovation in the early DeFi space as alleged in the complaint, the court will have to examine what Defendants knew about Plaintiffs' specific patented technology and when they knew it. This will be central to the claims of indirect and willful infringement.