Section 101: Cryptocurrency Patent Claims Hit the Blockchain Wall (and Talking Olympics)

In BPROTOCOL Foundation v. Universal Navigation, Judge John G. Koeltl of the U.S. District Court for the Southern District of New York dismissed patent infringement claims against Uniswap, finding that the asserted cryptocurrency exchange patents claim ineligible subject matter under Section 101. The message from the court is one we've heard before: Implementing an abstract idea on the blockchain is still just implementing an abstract idea.

The Patents at Issue

The plaintiffs asserted two patents: U.S. Patent No. 11,107,049 (the '049 Patent) and U.S. Patent No. 11,574,291 (the '291 Patent). Both relate "to the field of exchange and evaluation of virtual currency," or cryptocurrency. According to the plaintiffs, they invented a "self-executing smart token system for the blockchain that uses smart contracts to exchange one crypto asset for another while enabling continuous liquidity, instant conversions, and automated price discovery without the need for a centralized exchange or individual market makers." This system is known as a "constant product automated market maker" (CPAMM), which relies on liquidity pools and a new type of token: the "Liquidity Provider Token" or "LP Token."

If you're into the math (and I know at least one of you is), the algorithm can be expressed as:

Tp=~pTt/Tr × Rr~p

where Tp is the incremental price of an LP Token, Tt is the total volume of the LP token in circulation, Tr is the volume of assets in reserve, and Rr is the reserve ratio constant.

Uniswap developed a competing protocol. Litigation followed, as it does.

Alice Step One: Calculating Currency Exchange Rates

The court found that the claims in both patents are directed to the abstract idea of calculating currency exchange rates to perform transactions. Claim 1 of the '291 Patent recites a currency exchange calculation that proceeds by first "obtaining a status" of two relevant cryptocurrency tokens and then "determining an amount of at least one of the first cryptocurrency token, and the other cryptocurrency token obtained in exchange of one another" based on the status and the reserve ratio constant.

The court noted that currency exchange is "a fundamental economic practice long prevalent in our system of commerce." The U.S. Court of Appeals for the Federal Circuit has held time and again that claims directed to calculating pricing information don't survive Alice step one. The claims were also found abstract because the steps involve collecting and analyzing pricing information – specifically the status of at least two cryptocurrency tokens and the reserve ratio constant.

But It's Blockchain!

The plaintiffs argued that implementing their idea on the blockchain made the claims non-abstract. The court did not buy it. The court explained that "merely limiting the field of use of the abstract idea to a particular existing technological environment does not render the claims any less abstract."

The patents also admitted that cryptocurrencies, smart contracts and the blockchain all existed before the '049 and '291 Patents. And the patent examiner didn't help, describing the smart contract and blockchain technology in the patents as "conventional at the time of the invention" and "old and well known."

The court summed it up: The claims "do not purport to solve any technological problem, but instead use existing … blockchain technology in predictable ways to address [an] economic problem." The plaintiffs also tried arguing the patents claim a "specific, technical advance that dramatically reduces the computer resources needed to exchange cryptocurrencies," but the claims don't actually recite any technological solutions that solve a computer resources problem. As we often see: The patent owner can't argue a technological improvement if it is not actually claimed.

Alice Step Two: No Inventive Concept

At step two, same result. The claims are directed to currency exchange and collecting and analyzing data, and they implement those ideas using existing smart contract and blockchain technology.

The plaintiffs pointed to allegations in their amended complaint describing "an unconventional cryptocurrency smart-contract structure" that "mints [tokens] in exchange for cryptocurrencies deposited into a 'liquidity pool' managed by the smart contract." The problem is – again – that the court found none of those allegedly inventive features were actually claimed. And as the court reminded us, "the complaint cannot alter what the patents themselves claim."

The plaintiffs also identified "using two tokens and the amount of each" to perform the transaction as an "unconventional step." But the court found that's the abstract idea itself – and the abstract idea can't supply its own inventive concept.

Direct and Willful Infringement? Not So Fast

The court found that the plaintiffs also failed to adequately plead direct infringement. The amended complaint did not allege that the defendants' protocol includes the reserve ratio constant, Rr, as required by each claim in the patents. The plaintiffs tried to argue that Rr "mathematically resolves to 1," but the amended complaint never identified any reserve ratio constant (or value of 1) in the defendants' code.

As the court noted, the defendants' code is open source. The plaintiffs had access to it. They didn't need discovery to figure out how the code allegedly infringes. They just needed to actually look at it and plead accordingly, and they failed to do so.

The induced and willful infringement claims failed, too. To plead willful infringement, a plaintiff must plausibly allege that the accused infringer deliberately or intentionally infringed after obtaining knowledge of the patent. The plaintiffs alleged the defendants had knowledge of the patents from May 20, 2025 – the date the original complaint was filed. But as the court noted, "it is not the law in this district" that filing a complaint can supply the knowledge necessary for willfulness.

Not Over Yet

All of that said, the dismissal was without prejudice. The plaintiffs have the ability to file an amended complaint.

The case is BPROTOCOL Foundation, et al. v. Universal Navigation, Inc., et al., No. 25-cv-4214, 2026 WL 369394, (S.D.N.Y. Feb. 10, 2026).

Let's Talk Olympics …

I'd be remiss if I wrapped up a blog post in late February without mentioning the Winter Olympics, which just concluded in Milan and Cortina d'Ampezzo, Italy. I am missing the Games dearly.

Let's start with the obvious: What's better than one Golden Goal? Yes – two Golden Goals.

For the men, it was great to see a roster chock-full of guys from the great state and University of Michigan. (Go Blue!) If you haven't watched the highlights yet, stop reading this blog and go do that first. (Women, Men).

Team USA set a new Winter Olympics record with 12 golds and 33 total medals (the best total medal count outside of North America). Some of my top moments:

• Elana Meyers Taylor winning gold for the first time in her fifth Olympic Games at 41 years of age. Seeing her win at 41 inspired me to get to the gym – technically, the sauna at the gym. Here's her interview.
• The Hellebuyck save on Toews, but also the overhead shot of the save (Jared Tilton) and the related post by Art But Make It Sports.
• I was probably late to this, but Alyssa Liu is a star. She'll be a household name for a while.
• Curling and biathlon in their entirety. I love these sports every four years, and this year was no different.

One note from watching the USA/Italy women's match: USA touched the stone with the broom. Under the rules, Italian skip Constantini could have just pulled the stone. Done. The Americans even told her as much – "do whatever you want." But Constantini wasn't having it. She wanted to decide together. She asked for Team USA's input, talked it through and acted only once both sides were comfortable. That's sportsmanship you don't see enough of. This almost led to me writing a blog post about how we need to follow the "Spirit of Curling" but for litigation – but we already have something similar. We just need to remember to follow it. (Here's a post from GSOC about the incident.) Anyway: Relive the best sounds from curling at the 2026 Olympics.

As for the host nation: credit where it's due. Italy racked up 30 medals, the mountain venues were absolutely gorgeous, and I loved the opening ceremony.

Best Winter Olympics in years. USA on top in the sport that matters most. (Sorry, Canadian friends.) I'm still riding the high, and I cannot wait for the World Cup.