Bancor Sues Uniswap for Patent Infringement

Bancor Sues Uniswap for Patent Infringement. 

Bprotocol Foundation and LocalCoin Ltd., the developers behind the Bancor Protocol, have filed a lawsuit against Uniswap Labs and the Uniswap Foundation, accusing them of infringing on patented technology used in automated crypto trading.

At the center of the case is a smart contract system known as the constant product automated market maker (CPAMM),  a model Bancor says it created in 2016 to allow users to trade cryptocurrencies without going through a traditional exchange or centralized market maker. Bancor patented the system in early 2017 and launched it publicly that summer.

According to the complaint, Uniswap has been using that same system since at least 2018 without a license or any kind of formal agreement.

How the Dispute Began

Bancor’s legal team points to two U.S. patents they hold on the CPAMM model, both stemming from their early work on decentralized, self-operating liquidity systems. These patents, they argue, cover the core technology that now powers many DeFi platforms.

Despite knowing the system’s origin, Bancor claims, Uniswap implemented the same architecture when it launched its first protocol version in 2018 and has continued to do so in each new release, including its upcoming version 4.

“We’ve always believed in innovation, but that innovation has to respect the rights of the people who created it,” said Mark Richardson, Project Lead at Bancor.

“As innovators and inventors, protecting our intellectual property is fundamental to the health of the ecosystem. If companies like Uniswap can act unchecked without consequence, we fear it will hinder innovation across the industry to the detriment of all DeFi players.”

The Legal Claims

Bprotocol Foundation and LocalCoin are seeking damages for what they describe as ongoing unauthorized use of their patented system. They’re also accusing the Uniswap Foundation of encouraging or facilitating that infringement.

Although the filing doesn’t specify a dollar amount, the potential financial stakes are high. Uniswap is one of the most widely used platforms in the DeFi ecosystem, and any judgment against it could have broad implications for the industry.

Some of the core facts laid out in the complaint include:

“When an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action.

For the last eight years, Uniswap has been using our patented technology in its projects without our permission. As a result, we have taken legal action to defend our technology for the good of the entire DeFi community.”  Mr. Richardson said.

Bancor is a decentralized finance (DeFi) protocol that launched in 2017 and pioneered the automated market maker (AMM) model, enabling on-chain token trading without traditional order books or intermediaries. Governed by the Bancor DAO, the protocol continues to innovate with products like Carbon DeFi, amplified and asymmetric liquidity tools, and on-chain arbitrage solutions. 

Uniswap is a decentralized exchange (DEX) that lets users swap Ethereum-based tokens directly from their wallets using an automated market maker (AMM). Accessible via app.uniswap.org, it supports multiple blockchains and is a core platform in the DeFi ecosystem.

Bprotocol Foundation is a Swiss non-profit founded in 2017 to support the development and adoption of the Bancor Protocol. It promotes decentralized finance innovation through research, ecosystem growth, and legal advocacy, including protecting patented DeFi technologies. 

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