Layer1 faces lawsuit over alleged Lancium patent infringement

Blockchain company Layer1 Technologies is heading to court after data center power management firm Lancium LLC accused it of infringing upon the latter’s patented technology to adjust power usage in digital currency mining facilities.

Lancium filed the legal action on August 14 in the U.S. Western District Court of Texas. In its complaint, Lancium alleged that Layer1’s “demand-response” model enables the firm to shut down mining operations and redirect power to the grid during high demand periods. Lancium’s lawyers believe this system and methods amount to illegal replication and infringes on its patent.

Lancium patent, U.S. Patent No.10,608,433, was issued on March 31, 2020. It is titled: “Methods and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement.”

Lancium patented power management monitoring and control software technology helps regulate power consumption at “flexible” data centers. The software brings to bear “in seconds” when there is a low demand for power, making it more cost-effective when increasing consumption on the power grid or conversely reducing consumption to the point of shutting down when there is a spike in demand. 

This technology enables data centers to qualify as Controllable Load Resource(s) (“CLR”) in the Electric Reliability Council of Texas (“ERCOT”).

According to an excerpt from their filing, Lancium tried to alert Layer1 of this potential infringement on May 22, 2020, but received no response from the block reward miner. The company reached out again on June 2, regarding the alleged striking resemblance to their own product, to no avail.

Layer1 purportedly brazenly continued using the disputed method to operate its block reward mining operations in West Texas after being notified. 

Lancium argues in its lawsuit that Layer1 infringes on its patent in a multitude of ways from manufacturing, using, offering to sell, selling, or importing infringing systems and methods for adjusting power consumption utilized in or by at least Layer1’s digital currency mining facilities. Lancium is seeking damages commensurate with willful infringement of the firm’s patent, and a permanent injunction granted to prevent any further violation by Layer1 or any of its employees. 

For now, though, the patent infringement case is still winding its way through the U.S. judicial system. Layer1 hasn’t yet responded at the time of publication. Layer1 is backed by investors including PayPal co-founder Peter Theil and the Digital Currency Group and also is the parent company of the news website CoinDesk.