Updated: June 4, 2025, 6:45 AM UTC – Includes insights from cryptocurrency legal expert Michael Bacina.
Malikie Innovations, an entity that secured the rights to numerous patents from BlackBerry back in 2023, has initiated legal action against prominent Bitcoin mining operations, specifically Marathon Digital and Core Scientific. The core of the lawsuit revolves around the alleged unauthorized usage of Elliptic Curve Cryptography (ECC), a foundational element within the Bitcoin blockchain. Malikie Innovations asserts ownership over this ECC technology.
The lawsuits directed at Marathon Digital Holdings and Core Scientific stem from Malikie Innovations’ 2023 purchase of 32,000 patents deemed “non-core” by BlackBerry, the once-dominant mobile phone manufacturer.
Legal documents state, “This case hinges on pioneering advancements related to elliptic curve cryptography… innovations which were subsequently identified and implemented by the creators of Bitcoin.”
The legal action contends that the defendants are utilizing ECC-based cryptographic techniques, covered by patents held by Malikie, to facilitate their Bitcoin (
BTC) mining activities.
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Could Bitcoin Users Be at Risk?
Aaron Brogan, principal attorney at Brogan Law, explained to Cointelegraph that it’s improbable that these lawsuits will significantly impact the average Bitcoin user, regardless of patent validity:
“Targeting individual users is difficult because they usually lack substantial assets. This makes them less attractive litigation targets.”
Brogan elaborated that mining operations, with their considerably higher capital, are considered attractive targets. “These entities are frequently the focus of litigation due to their financial resources, which patent attorneys aim to access.”
Should the plaintiffs succeed, they could potentially claim royalty payments for the past six years. Accurately determining the exact amount is complex. Such cases frequently lead to a follow-up trial to determine damages. “One can anticipate a substantial payout, which could potentially lead to the bankruptcy of the defendant entities,” Brogan projected.
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Implications on a Wider Scale
Brogan further emphasized that a victory in this case could establish a positive legal precedent for Malikie to use in future cases against other Bitcoin miners within the United States, an event which might severely affect the Bitcoin Network.
“If they decide to actively pursue such actions, the overall security and operation of the Bitcoin network could be compromised,” he warned.
Michael Bacina, a Cryptocurrency Legal professional from the Cayman Islands, offered a different perspective to Cointelegraph, suggesting that this approach is unlikely for Malikie. “Patent assertion entities often seek settlements rather than pursuing full legal challenges to their claims,” he noted.
Brogan, however, contends that it’s more plausible Malikie will look to collect fees until the patents expire, instead of intentionally damaging the cryptocurrency industry. Niko Demchuk, Head of Legal at Cryptocurrency Compliance and Forensics Firm AMLBot, told Cointelegraph that this seemed unlikely:
“Malikie’s legal arguments appear weakened if their asserted patents are expired or relate to techniques existing before Bitcoin’s adoption of ECC. Even with active patents, their coverage likely pertains to particular implementation aspects rather than fundamental ECC algorithms core to Bitcoin,” Demchuk specified. He added, “Still, the court’s interpretation and details of specific patents will dictate the result.”
Bacina also emphasized that a finding of infringement is not the end of the inquiry, explaining, “A key aspect will be whether the miners are in fact infringing, given their use of open-source resources.”
This isn’t the first occasion that legal battles involving intellectual property have targeted Bitcoin. The bitcoin.org website was able to republish the Bitcoin whitepaper last year after it was taken down in court during a unsuccessful attempt by Craig Wright to have himself named as Satoshi Nakamoto, the founder behind the technology.
Craig Wright has actively claimed ownership of key aspects of the technology underlying Bitcoin. In the two years before 2019, he had submitted 114 patents related to blockchain.
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