Bprotocol Foundation and LocalCoin have initiated legal action against Uniswap Labs and the Uniswap Foundation, citing allegations of patent infringement. The lawsuit, filed on May 20, 2025, in the United States District Court for the Southern District of New York, brings attention to the ongoing debate about intellectual property within the cryptocurrency and decentralized finance (DeFi) sectors.

Allegations of Patent Infringement

Bprotocol Foundation and LocalCoin, known for developing Bancor Protocol and the Bancor token (BNT), claim that Uniswap has infringed upon their patented technology. Specifically, the lawsuit centers around the use of smart contract technology related to decentralized trading, which Bancor asserts is protected under its intellectual property.

The dispute focuses on Uniswap’s implementation of the constant product automated market maker (CPAMM), a mechanism that serves as the backbone of the Uniswap Protocol. Bprotocol Foundation and LocalCoin argue that Uniswap has utilized this technology without authorization for the past eight years, since the protocol’s launch in November 2018.

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

Background on Bancor’s Patented Technology

Bancor first filed for a patent for its decentralized trading technology in 2017, following its initial development in 2016. This innovation enabled Bancor to launch its automated market maker (AMM)-powered decentralized exchange (DEX) protocol, pioneering a foundational tool for DeFi platforms.

According to the lawsuit, Bprotocol Foundation and LocalCoin retain all rights to this invention and assert that Uniswap Labs has unlawfully integrated the technology into its protocol, starting with Uniswap v1. The legal action aims to protect Bancor’s intellectual property and prevent further unlicensed use.

Uniswap’s Market Position and Growth

Uniswap has emerged as a leading decentralized exchange, boasting significant trading volumes and a vast user base. Since its initial launch, the platform has introduced multiple upgrades, including its latest iteration, Uniswap v4. These advancements have helped Uniswap maintain its dominance in the DeFi space.

Notably, the Uniswap Protocol recently surpassed $3 trillion in cumulative swap volume—a substantial milestone reflecting its widespread adoption. Additionally, the platform’s total value locked (TVL) has grown considerably, with current figures exceeding $4.8 billion, according to DeFiLlama data.

Implications for the DeFi Ecosystem

The lawsuit between Bancor and Uniswap underscores the increasing importance of intellectual property in the cryptocurrency industry. As DeFi platforms continue to innovate, disputes over proprietary technology are likely to become more common, potentially shaping the regulatory and competitive landscape of the sector.

Key Takeaways for Crypto Investors

  • Understand Intellectual Property Risks: Legal disputes like this highlight the importance of proprietary technology in the crypto space. Investors should monitor how these issues can impact project development and market stability.
  • Follow Industry Milestones: Platforms like Uniswap and Bancor continue to achieve significant milestones, such as TVL growth and trading volume. These metrics offer insights into market trends and project success.
  • Stay Informed: Legal battles may influence token prices and the overall DeFi ecosystem. Keeping up with updates is essential for investors aiming to make informed decisions.

The outcome of this lawsuit could set a precedent for how intellectual property disputes are handled in the cryptocurrency industry, potentially affecting innovation and competition in the DeFi market for years to come.

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