Coinbase Strikes Back at Patent Trolls: “We Don’t Pay, We Sue!”

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Ah, the sweet sound of justice ringing through the air, or is it the sound of legal teams scrambling to prevent another round of “patent extortion”? Coinbase, in all its glory, has decided that enough is enough. No more giving in to what it calls “patent extortion”-no, no, they’re taking matters to the courtroom, my friends! Enter stage right: the Chief Legal Officer, Paul Grewal, who’s making sure the world knows: if you try to pull a fast one with bogus claims, we won’t pay-oh no, we’ll sue you right back. Brilliant, right? 👏

“So that there’s no confusion about the Coinbase approach to patent extortion, allow me to confirm how we do things: we don’t pay out bogus claims, we sue you instead. Today was an example of that,” Grewal wrote on X-oh, the clarity! 💡

So that there’s no confusion about the @coinbase approach to patent extortion, allow me to confirm how we do things: we don’t pay out bogus claims, we sue you instead. Today was an example of that. 1/3

– paulgrewal.eth (@iampaulgrewal) September 4, 2025

But wait, the drama continues! Grewal didn’t stop there, oh no-he made sure to share the juicy details: the complaint filed on September 3, 2025, backed by the legal dream team at Jones Day. Now, let’s get into the thick of this dispute over Patent No. 6,993,658-sounds like a superhero name, doesn’t it? 🦸‍♂️

The Dispute Over Patent No. 6,993,658

The heart of the matter: U.S. Patent No. 6,993,658, which allegedly covers the use of personal devices for user authentication. Dynapass Inc. claims that Coinbase violated this precious patent by daring to use two-factor authentication (2FA) for its users-something Coinbase has been enforcing since 2018. Oh, the horror! 😱

Dynapass wasn’t shy either. On July 18, 2025, they came knocking, demanding damages and waving around their history of successful legal wins like a victory flag. The audacity!

Here’s the full DJ complaint. Many thanks to our OC at @JonesDay. 3/3

– paulgrewal.eth (@iampaulgrewal) September 4, 2025

But Coinbase wasn’t about to back down. On August 1, they hit back with a firm rejection, showing evidence that their practices weren’t even close to violating this patent. In fact, they pointed out that the patent expired in March 2020 and, get this, one of its key claims was already declared unpatentable by the U.S. Patent Office in 2024. The plot thickens! 😏

When Dynapass refused to back off by August 11, Coinbase escalated things to the courtroom. What else was there to do? 😎

Now, Coinbase is asking the court to declare that not only did they not violate the 658 patent, but that the patent itself is as useful as a soggy napkin-invalid under U.S. law, thanks to the Supreme Court’s Alice ruling. Mic drop. 💥

A Broader Industry Message

But this isn’t just about one little patent. Oh no, my friends, Coinbase is on a mission. By fighting this battle, they want to send a bold message to the tech and crypto industries: “Stop with the patent trolling!” These so-called “patent trolls” often target innocent companies with flimsy claims just to rake in some easy cash. Coinbase’s refusal to bow down is setting a new precedent-one where companies stand tall, fight back, and maybe even recover attorney’s fees if they win. Could this be the start of a revolution? Only time will tell…

As the case heads to litigation in California, one thing is clear: Coinbase isn’t just fighting a patent. They’re drawing a line in the sand. No more tolerating the so-called “abusive legal tactics” of patent trolls. And if they win, expect more companies to follow suit-and not in a “pay-up” kind of way. 🧐

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2025-09-04 09:44