PayPal Co-founder, DCG-Backed BTC Mining Firm Layer1 Accused of Patent Infringement

Data center power management firm Lancium filed a lawsuit against Layer1 today, alleging the bitcoin mining firm’s operations had infringed upon its patent.

Aug 15, 2020 at 1:05 a.m. UTC
Updated Sep 14, 2021 at 9:44 a.m. UTC

According to a recent lawsuit filed in the U.S. Western District Court of Texas, data center power management firm Lancium has accused bitcoin mining firm Layer1 of infringing upon its patented technology to adjust power usage in bitcoin mining facilities. 

Backed by investors including PayPal co-founder Peter Theil and the Digital Currency Group, CoinDesk's parent company, Layer1 currently operates bitcoin mining facilities in West Texas. 

  • According to Lancium’s filed complaint, Layer1’s “demand-response” model that allows the firm to shut down mining operations and redirect power to the grid during high demand violates the firm’s patent. 
  • Granted in March of this year, Lancium holds a patent on technology to help adjust power consumption at “flexible” data centers that kick into action when there is low demand for power, hence making it cheaper, and shut down when there is a spike.
  • According to exhibits attached with Lancium’s filed complaint, the firm tried to alert Layer1 of this possible infringement in May 2020 but received no response from the mining firm.
  • In its filed complaint, Lancium argues it should receive damages commensurate with willful infringement of the firm’s patent and a permanent injunction should be granted to prevent any further violation by Layer1 or any of its employees.
  • Layer1 did not respond to a request for comment on the lawsuit by press time.
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