A U.S. federal court has dismissed a patent infringement lawsuit filed against decentralized exchange Uniswap by entities connected to the Bancor protocol. The ruling, issued by Judge John G. Koeltl of the U.S. District Court for the Southern District of New York on February 10, 2026, represents a significant legal victory for Uniswap and the broader decentralized finance (DeFi) sector.
The lawsuit, initiated in May 2025 by Bprotocol Foundation and LocalCoin Ltd., alleged that Uniswap Labs and the Uniswap Foundation infringed on a 2017 patent covering the constant product automated market maker (CPAMM) model, commonly known by the formula x*y=k. This technology is fundamental to pricing tokens in liquidity pools and underpins many decentralized exchanges. The plaintiffs claimed Uniswap had used this patented method without permission since its 2018 launch and sought financial damages.
In his memorandum opinion, Judge Koeltl granted Uniswap's motion to dismiss, ruling that the asserted patents claim abstract ideas—specifically, the abstract idea of calculating currency exchange rates—and are therefore not eligible for protection under U.S. patent law. The court found that implementing this formula on blockchain infrastructure merely uses existing technology "in predictable ways to address an economic problem" and does not contain an "inventive concept" sufficient to make it patent-eligible.
Furthermore, the judge dismissed the complaint on procedural grounds, finding it failed to plausibly allege direct infringement, as it did not identify how Uniswap's publicly available code included a specific reserve ratio constant required by the patents. Claims of induced and willful infringement were also dismissed due to a lack of evidence that Uniswap knew about the patents before the lawsuit.
Uniswap founder Hayden Adams announced the victory on social media platform X shortly after the ruling, stating, "A lawyer just told me we won." The case was dismissed without prejudice, giving the plaintiffs 21 days to file an amended complaint. If they do not, the dismissal will convert to one with prejudice, effectively ending the case at the district court level. As of now, there has been no announcement of an appeal.
The decision is seen as a major win for open-source development in DeFi. Industry groups like the DeFi Education Fund and the Solana Institute had filed statements supporting Uniswap, warning against using patents to restrict open innovation. The ruling signals that core financial mechanisms relying on widely adopted, simple mathematical formulas may be difficult to patent, reducing legal uncertainty for developers and projects across the ecosystem.
