Square Aims to Stop Patent Trolls From Killing ‘Bitcoin Adoption’

The alliance aims to minimize litigation and ward off patent trolls by bringing together crypto companies large and small.

In brief

• Square has formed the Cryptocurrency Open Patent Alliance.
• Members must pledge not to use their crypto patents except defensively.
• Additionally, a shared patent library will help members defend themselves as needed.

American financial services firm Square has been a major proponent of cryptocurrency, from its Cash App being a popular place to buy Bitcoin to its Square Crypto division awarding several grants to date to developers of free, open-source projects.

Today, Square Crypto unveiled the next step in its push for the continued growth and wellbeing of the industry, launching the Cryptocurrency Open Patent Alliance, or COPA.

COPA continues the focus on open-source technologies that Square Crypto started with its grants, but broadens its horizons by inviting other crypto industry companies to join. To do so, companies must pledge to never assert patents on what Square calls “foundational cryptocurrency technology,” unless it's to defend those technologies.

Furthermore, members will contribute to a shared patent library that allows fellow members the ability to use those patents defensively against outside patent trolls, which Square says will “[give] even small companies a shield with which to protect themselves against patent aggressors.”

“As you know, from Square Crypto to Cash App, Square is in the fight to keep Bitcoin and crypto free and open. The way to do this is to make sure that the tech driving both is available to everyone,” Square Crypto tweeted today.

“The success of cryptocurrencies, as with any new technology, depends on people being able to build what they want, which is not possible when every new idea gets tied up by patent litigation.”

“There is growing concern that ‘patent lockup’ could stifle innovation and adoption from Bitcoin to the most obscure cryptocurrency,” it added. “In order to tackle this problem, the crypto community will need to once again do what it is so famous for and come together for the greater good.”

Square Crypto is the only announced company thus far, and it has made a “good faith gesture” in opening up all of its crypto patents for future COPA members to use as needed. Additionally, the company will fund all membership dues for the first year, after which fees will be determined to cover operational expenses.

According to the COPA website, the organization will be run separately from Square by a board of nine people: three from the crypto and open-source community, three from the founding companies, and three more chosen from additional firms that join.

Companies that wish to join must agree to stay in the alliance for a minimum of three years, and any patents that they pledged not to assert (except defensively) during their time in COPA will still be “subject to the Patent Pledge” after they leave.