Bots, a publicly-traded over-the-counter markets tech firm, has announced its subsidiary First Bitcoin Capital will take legal action against Bitcoin ATM operators for alleged intellectual property infringement.
In an announcement First Bitcoin Capital published, first reported on by Modern Consensus, the firm claimed it’s in discussion with “a major law firm” to act against Bitcoin ATM operators over the alleged infringements of its Bitcoin ATM patent, and collect royalty payments from the operators. The company said:
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.
Bots reportedly announced last month it acquired a subsidiary from First Bitcoin Capital Corp, including the rights to U.S. Patent No. 9,135,787. The patent was filed in 2014 and describes a Bitcoin ATM. The announcement details many of the elements of it will be ‘standard-essential claims’ which “are critical for the Bitcoin ATM networks to operate.”
The announcement describes 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.
First Bitcoin Capital revealed that while negotiations with law firms are ongoing, it is also “reaching out to individual operators to reach an amicable arrangement.” While the potential terms of these amicable arrangements were not revealed0, Bots CEO Paul Rosenberg said transaction royalty payments will be “negotiated for a several-year term.”
Some of the agreements, he said, could “could cover previous years and/or a significant number of coming years.” Data from Coin ATM Radar shows there are 11,700 Bitcoin ATMs throughout the world, operated by a total of 565 entities.
Per Bots, the average Bitcoin ATM processes 130 to 180 transactions per month, which the firm estimates could bring it in a potential revenue ranging from $14 million to $18 million. If a judge sides with First Bitcoin Capital, the Bitcoin ATM industry could be affected as a whole.
As CryptoGlobe reported, earlier this year Square, the payment company of Twitter CEO Jack Dorsey, has invited cryptocurrency firms to join its Cryptocurrency Open Patent Alliance (COPA), a non-profit that wants to stop firms from locking up useful crypto technologies using patents.
Per Square, companies can guard their own work in crypto using patents, but some go further and file “pre-emptive patents” for ideas they don’t plan on developing, hindering the research of competitors in the process.
To join COPA, members have to pledge to make their patents freely available to all other members in a shared library. Any company working in the cryptocurrency space can join COPA, regardless of whether it has patents or not.
Featured image via Unsplash.