Bots announced its subsidiary First Bitcoin Capital would take legal action against Bitcoin ATM operators for suspected intellectual property infringement.
In an announcement, the firm claimed that it is in discussion with “a major law firm” to act against Bitcoin ATM operators over the alleged infringements of its Bitcoin ATM patent and collect payment from the operators. The company stated:
Last month, Bots announce that it acquired a subsidiary from First Bitcoin Capital Corp, involving the rights to U.S. Patent No. 9,135,787. It was filed in 2014 and described as Bitcoin ATM. The announcement detailed many of its elements will be ‘standard-essential claims,’ which “are critical for the Bitcoin ATM networks to operate.”
The announcement defines the patent as follows:
“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.”
It has been revealed by the First Bitcoin Capital that while negotiations with law firms are ongoing, it is also “reaching out to individual operators to reach an amicable agreement.” The potential terms of the arrangements were not yet revealed, but Bots CEO Paul Rosenberg mentioned that transaction royalty payments would be “negotitated for a several-year term.”
He said that some of the agreements “could cover previous years and/or a significant number of coming years.” Data showed that there are 11,7000 Bitcoin ATMs in the world, operated by a total of 565 entities.
As per Bots, the average Bitcoin ATM processes 130 to 180 transactions in a month, which the firm estimated can bring it in potential revenue fluctuating from $14M to $18M. If a judge sides with First Bitcoin Capital, the Bitcoin ATM industry can be also be affected.
Earlier this year, Square, the payment company of Twitter CEO Jack Dorsey, has invited cryptocurrency firms to join the Cryptocurrency Open Patent Alliance (COPA), a non-profit aims to stop firms from locking up useful crypto technologies using patents.
According to Square, companies can guard their work in crypto using patents. Still, some will go further and file “pre-emptive patents” for ideas that they don’t plan on developing, halting the research of competitors in the process.
Members will have to pledge to make their patents freely available to all members in a shared library to join COPA. Any company that works in the cryptocurrency space can join COPA, whether it has patents or none.