Bancor sues Uniswap for patent infringement over DEX smart contract tech

The developers behind Bancor have filed a patent infringement lawsuit against Uniswap Labs and the Uniswap Foundation, accusing them of unlawfully using its foundational decentralized exchange technology.

The lawsuit was filed by the Bprotocol Foundation, a nonprofit supporting the development of the Bancor Protocol, and LocalCoin Ltd., Bancor’s original developer. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Uniswap’s protocol is built on Bancor’s patented constant product automated market maker (CPAMM) infrastructure.

Bancor, credited with inventing the CPAMM model in 2016, developed the mechanism to power permissionless onchain trades through smart contracts. The protocol released a whitepaper and filed U.S. patent applications in 2017. According to a May 20 press release, Bancor was granted two patents and launched the first CPAMM-based DEX that year.

The lawsuit claims Uniswap’s original protocol, launched in November 2018, uses the same CPAMM design without authorization. Bancor alleges Uniswap has “profited greatly” by deploying its intellectual property without consent.

"When an organization continuously uses our invention without our authorization and does so as a means of competing with us, we must take action,” said Mark Richardson, project lead at Bancor. “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.”

"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," Richardson added.

"This lawsuit is meritless, and we will defend ourselves accordingly," said a spokesperson for Uniswap Labs in a written statement to The Block. "The code for the Uniswap Protocol is public and has been for years. What a wasteful distraction at a time of historic momentum for DeFi."

Updated (May 20, 22:26 UTC): Added statement from Uniswap Labs