Uniswap defeats Bancor patent lawsuit over automated market maker technology

A US federal court has ruled in favour of Uniswap in a patent infringement lawsuit brought by entities connected to rival DeFi protocol Bancor, rejecting claims that Uniswap’s automated market maker technology unlawfully used mechanisms patented by the plaintiffs.

The February 11 ruling by the United States District Court for the Southern District of New York clears Uniswap’s core trading infrastructure of infringement liability and sets a significant precedent for open-source blockchain development across the DeFi industry.

Origins of the dispute

The lawsuit was filed in May 2025 by the Bprotocol Foundation and LocalCoin Ltd, both linked to the Bancor project, which argued that its 2017 CPAMM patent had been used by Uniswap without authorization since that platform’s 2018 launch.

Bancor claims its design for automated liquidity pools, patented shortly after its invention in 2016, underpins Uniswap’s smart contracts, a contention that calls into question intellectual property boundaries in a space built on open-source collaboration.

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

Uniswap Labs and the Uniswap Foundation vigorously denied any wrongdoing, asserting that the protocol’s code had always been public, open-source, and subject to broad community review.

A Uniswap spokesperson described the lawsuit as completely baseless and criticized it for diverting attention from innovation.

“Open-source principles are at the heart of DeFi.” Hayden Adams, founder of Uniswap said in a post announcing the court’s ruling, noting that his legal team had informed him of the decision in Uniswap’s favor.

Implications for DeFi innovation

Legal analysts say the court’s decision sends a strong signal that patents covering broad conceptual mechanisms, especially those rooted in simple mathematical formulas will face steep hurdles in software and blockchain contexts.

This outcome has been welcomed by open-source advocates and many in the DeFi community, who feared that aggressive patent claims could chill innovation across decentralized protocols.

Industry groups such as the DeFi Education Fund and the Solana Institute filed statements backing Uniswap and warning against the misuse of intellectual property laws to restrict community-driven development.

The ruling also removes a cloud of legal uncertainty for similar projects that employ AMM models, many of which are essential to decentralized liquidity and trading.

Had the court sided with Bancor, developers across the ecosystem might have faced licensing hurdles or costly litigation simply for using foundational DeFi techniques.

Industry reaction and future outlook

Reactions from market participants were broadly positive, with some developers framing the outcome as a defense of the foundational ethos of crypto, open access and permissions innovation.

Others noted that while the decision is a significant precedent, debates over the limits of software patents in blockchain will likely continue.

The ruling appears definitive at the district court level, with no immediate indication of an appeal.

Uniswap’s users and partners can move forward without the specter of ongoing litigation over this core element of its trading infrastructure.

Investors and DeFi builders alike will be watching closely for how this decision influences future disputes over intellectual property in decentralized technologies.