Fintech

Patent trolls are circling crypto. A Square lawyer wants to defend it.

Kirupa Pushparaj leads an industry group that's taken on controversial bitcoin figure Craig Wright.

​Square's Kirupa Pushparaj is defending the nascent cryptocurrency industry against patent trolls.

Square's Kirupa Pushparaj is defending the nascent cryptocurrency industry against patent trolls.

Image: Square, Executium/Unsplash

Square CEO Jack Dorsey's affinity for cryptocurrency is no secret: His Twitter bio reads just "#bitcoin," he's hired engineers to work on open-source crypto projects and Square's Cash App is making a mint on bitcoin trading.

But one of the most powerful figures working at Square to make cryptocurrency mainstream is a much lower-profile lawyer, Kirupa Pushparaj.

In his day job as deputy general counsel, he oversees Square's intellectual property portfolio and legal operations. He's also board chair of the Cryptocurrency Open Patent Alliance, an industry group Square formed in September. Coinbase, Kraken, Blockstack, SatoshiLabs and Okcoin are also members. It's an independent nonprofit with a board made up of six people from member companies and three from the crypto and open-source worlds.

There's more and more at stake every day. Square is worth nearly $100 billion, its value juiced in part by investors' hopes around its exposure to crypto. The company just reported that more than half of its quarterly revenue came from crypto trading. The next most valuable member, Coinbase, is worth almost $60 billion following its direct listing. And a growing economy of startups is similarly betting on cryptocurrency. Patent lawsuits and other intellectual property disputes threaten that momentum.

The companies in COPA have pledged to never proactively assert a patent in a case — a "first strike" — and to put all their patents together as a defensive shield against patent trolls.

The former move is to ensure that crypto companies don't sue each other over patents. And it effectively makes the technology protected by those patents free for anyone to use.

The latter pledge is designed to help smaller companies that don't have as many patents, letting them borrow the patents from this collective library to defend themselves against abusive patent claims.

"The best use of patents is not to even come to use them, but to avoid litigation in the first place," Pushparaj said.

Crypto enthusiasts also espouse decentralization, financial inclusion and opening up markets for all, and they're also generally supporters of open source, which undergirds most blockchain development. Those philosophies inform COPA, Pushparaj said.

Accordingly, the group's interests go beyond just patents. In April it filed a lawsuit against Craig Wright, a notorious figure in the crypto industry who has claimed to be Satoshi Nakamoto, the pseudonym of the inventor of Bitcoin. Many in the industry have questioned Wright's claims, and he hasn't provided proof.

Wright had sent cease-and-desist letters to companies and core developers for web hosting and using the original Bitcoin white paper written by Nakamoto. He has also attempted to copyright the white paper and Bitcoin code.

COPA argues that Wright isn't the author of the original Bitcoin paper and that Wright doesn't own the copyright to it. The group sees protecting anyone's ability to use the document as part of its mandate to protect the crypto industry.

Patents are a key issue for crypto because the industry is still at an early stage, and patent wars could hurt innovation among companies seeking to build new crypto products and technology, Pushparaj said.

Having patents locked up by a few entities could also stifle the industry and prevent mass adoption, which is what it really needs, he said, pointing to patent wars over 5G networks or cellular in previous tech generations as examples of legal battles that hurt development of innovation.

"The industry needs more adoption, so we don't want foundational technology locked up in patents in a way that only a select few have access to it," Pushparaj said. "We don't want to bring patent wars to tech that already has much farther to go in such an early stage."

Square deal

Pushparaj has a combination of technical and legal expertise that's been an asset in the complex world of tech IP law. He did his undergraduate engineering degree in India, then came to the U.S. in 2001 as a graduate student in computer science.

After starting out at Siemens and then Intel as an engineer, his interest in law drew him to enter law school while still working at Intel. After a stint at law firm Perkins Coie, he went to Amazon and worked in the unit that developed the Kindle.

At that point, a young company called Square poached him away. "I had heard about the company. The idea that you could use a mobile plug-in to reach the world of finance for just about anyone was fascinating to me," he said.

Pushparaj joined Square in 2013 when there were about five in-house attorneys and the company was growing quickly.

At Square, Pushparaj's team not only works on patents, but also is involved in product development. "Our team needs to be at the precursor part with engineering teams, helping them come up with ideas and brainstorming ideas, way earlier than at the product roadmaps," he said.

Intellectual property gets a bad rap for being used by patent trolls who don't bring products to market and just sue other companies, but IP can be used for innovation, Pushparaj said. "It's more about protecting what we do from a defensive perspective," he said. "Trying to protect our company from trolls and abusive litigation is where our primary role is on the IP side."

Square has been sued for patent infringement several times over the years. And it has more than 1,000 patents or patent applications, some of which are crypto-related and subject to COPA's pledges. Instead of paying off the trolls and settling, Square has fought the cases that it believes are invalid or too abstract, despite it costing much more than settling. That's because Square believes that's the only way to stop the problem.

Part of the problem comes from patent law in the 1990s and early 2000s, where such laws were written extremely broadly especially for financial technology, Pushparaj said. "One patent that was issued said, 'I'll look at the stock market and hedge my bets and see when I should buy stock from the market,'" he said. "That's so abstract an idea that it's something you can do in your head, and it's very fundamental to how you operate in the financial industry."

In the emerging world of crypto, patents are even more important, Pushparaj says. The worst thing that could happen is for crypto startups to be sued for patent infringement, Pushparaj says. "At this stage we want to make sure there's more innovation in cryptocurrency development."

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins