Publicly-traded over-the-counter markets technology firm Bots announced that its subsidiary First Bitcoin Capital will take action on alleged intellectual property infringement by Bitcoin ATM operators.
According to a Nov. 9 announcement, First Bitcoin Capital is in discussion with “a major law firm” to act against the infringements to its Bitcoin ATM patent and collect royalty payments by those operating such machines. The company claims:
“All Bitcoin ATM manufacturing companies could be forced to use the patented technology to manufacture and sell their Bitcoin ATMs as well as companies and individuals that own and operate Bitcoin ATM networks locally and nationwide.”
First Bitcoin Capital notes that while its negotiations with the firm laws are ongoing, the company is also “reaching out to individual operators to reach an amicable arrangement without litigation. Still, the firm did not reveal any details pertaining to the conditions of the amicable arrangements in question. Bots CEO Paul Rosenberg said:
“Per transaction royalty payments will be negotiated for a several-year term. Some agreements, especially with the manufacturers, could cover previous years and/or a significant number of coming years […] as those terms have not been finalized yet.”
Bots reportedly announced in late October that it acquired a subsidiary from First Bitcoin Capital Corp, which included the rights to U.S. Patent No. 9,135,787. The patent—available online—was filed in 2014 and describes a Bitcoin ATM. The announcement explains:
“This patent is related to the purchase and sale of cryptocurrencies utilizing a Bitcoin ATM or kiosk that allows customers to purchase Bitcoin or other cryptocurrencies by using cash, debit, or credit cards. Many of the elements of that intellectual property (I.P.) will be ‘standard-essential claims’ which are critical for the Bitcoin ATM networks to operate.”
Currently, Bitcoin ATM finding and analytics service Coin ATM Radar reports 11,705 such machines being active in 70 countries, made by 44 different producers and operated by 565 entities. Bots claims that the average Bitcoin ATM processes from 130 to 180 transactions per month and estimates that this would bring the company a potential revenue ranging from $14 million to $18 million.
If the judges find the patent infringement in question to be legally sound it could severely damage the Bitcoin ATM industry and its operators. So-called “patent trolls” are a great danger to the cryptocurrency industry as a whole, as Twitter CEO and co-founder Jack Dorsey recently recognized.
As Modern Consensus reported in early September, Dorsey announced that his financial technology firm Square had launched the “Crypto Open Patent Alliance,” aiming “to help the crypto community defend against patent aggressors and trolls.” The alliance owns crypto patents placed there by the firms that joined it—including Square—and renounces litigating them.