A federal judge in the Southern District of New York granted Uniswap Labs and the Uniswap Foundation's motion to dismiss on February 10, tossing out a patent infringement lawsuit filed by Bprotocol Foundation and LocalCoin Ltd., entities linked to Bancor. Judge John G. Koeltl ruled that the patents covering the Constant Product Automated Market Maker (CPAMM) system describe an abstract idea—calculating currency exchange rates—and thus fail to meet U.S. patent eligibility requirements. The decision marks another legal win for Uniswap after the SEC dropped its probe in early 2025.
Judge: Currency exchange is a fundamental economic activity
Bancor alleged that Uniswap's protocol infringed on its patents for CPAMM, which powers automated token pricing and liquidity pools in decentralized exchanges. Judge Koeltl disagreed, stating that the patents merely claim "the abstract idea of calculating a currency exchange rate to execute a transaction." He wrote: "Currency exchange is a fundamental economic activity, and calculating pricing information is an abstract idea under Federal Circuit precedent. Deploying the formula on blockchain infrastructure does not make it patent-eligible." The court found no "inventive concept" that could transform the abstract idea into a patentable application, calling the implementation a "predictable use of existing blockchain and smart contract technology."
All infringement claims rejected
Beyond patent eligibility, the court ruled that the complaint failed to plausibly allege direct infringement. Plaintiffs could not show that Uniswap's publicly available code included a "reserve ratio constant" as required by the patents. The judge also dismissed claims of induced and willful infringement, noting that the complaint did not adequately assert that Uniswap knew of the patents before the lawsuit. Both claims were rejected.
Hayden Adams: 'We won'
Uniswap founder Hayden Adams posted on social media after the ruling: "My lawyer just told me we won." The dismissal is without prejudice, giving plaintiffs 21 days to file an amended complaint. If they fail to do so, the dismissal becomes final with prejudice. Bancor claimed it invented CPAMM technology in 2016 and filed a U.S. patent application in 2017; Uniswap's first version launched in November 2018 and was accused of using the same mechanism.
Implications for DeFi patent landscape
The ruling sets a significant precedent for how courts view blockchain-based financial algorithms. By treating core financial math as an abstract idea outside patent protection, the decision could influence future DeFi patent disputes. However, Bancor may still revive the case with an amended complaint within the 21-day window. The outcome bolsters Uniswap's legal standing in the competitive AMM space.