Malikie Innovations Ltd v. Core Scientific Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Malikie Innovations Ltd. and Key Patent Innovations Ltd. (Ireland)
  • Defendant: Core Scientific, Inc. (Delaware)
  • Plaintiff’s Counsel: Reichman Jorgensen Lehman & Feldberg LLP
• Case Identification: 2:25-cv-00519, E.D. Tex., 11/14/2025
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant owns, leases, and/or operates facilities for bitcoin mining and High-Performance Computing (HPC) services within the district, including in Denton, Texas.
• Core Dispute: Plaintiff alleges that Defendant’s bitcoin mining and HPC hosting services infringe six patents related to foundational elliptic curve cryptography, efficient modular reduction, and hash algorithm implementation.
• Technical Context: The technology at issue involves cryptographic methods for generating and verifying digital signatures and efficiently performing underlying mathematical computations, which are fundamental to securing blockchain and cryptocurrency transactions.
• Key Procedural History: The complaint asserts infringement only for activities occurring after Defendant emerged from Chapter 11 bankruptcy on January 23, 2024. Plaintiff alleges it sent pre-suit notice letters regarding the patents-in-suit to Defendant on March 28, 2025, and April 18, 2025, but Defendant refused to engage in licensing discussions.

Case Timeline

Date	Event
2001-12-31	Priority Date for ’960 and ’062 Patents
2005-01-18	Priority Date for ’827 and ’370 Patents
2008-05-13	’960 Patent Issued
2009-07-17	Priority Date for ’286 Patent
2011-04-06	Priority Date for ’039 Patent
2013-09-10	’286 Patent Issued
2014-03-04	’062 Patent Issued
2014-04-29	’039 Patent Issued
2014-07-22	’827 Patent Issued
2019-05-07	’370 Patent Issued
2024-01-23	Start of Alleged Infringing Activity (Post-Bankruptcy)
2025-03-28	Plaintiff’s First Notice Letter to Defendant
2025-04-18	Plaintiff’s Second Notice Letter to Defendant
2025-05-12	Original Complaint Filed
2025-11-14	First Amended Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,788,827 - “Accelerated Verification of Digital Signatures and Public Keys,” issued July 22, 2014

The Invention Explained

• Problem Addressed: The patent describes the verification of an Elliptic Curve Digital Signature Algorithm (ECDSA) signature as being computationally intensive, appearing to take twice as long as signature creation because it involves two scalar multiplications (Compl. ¶81; ’827 Patent, col. 3:9-17). This computational overhead can create a bottleneck in systems that perform many signature verifications (Compl. ¶82).
• The Patented Solution: The invention provides methods to accelerate the verification process. One technique involves reorganizing the standard verification equation, R = uG + vQ, into an equivalent form, -zR + (zu mod n)G + wQ = O, where the integers w and z have a reduced bit length (approximately half that of the original scalar v) ('827 Patent, Abstract; col. 4:55-61). This reorganization allows for more efficient computation, as operations on smaller integers require fewer resources ('827 Patent, col. 4:61-64).
• Technical Importance: By reducing the computational time for signature verification, the invention enables more efficient and high-throughput processing in cryptographic systems where verification is a frequent operation (Compl. ¶84).

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶136).
• Essential elements of claim 1, a method, include:
  • Receiving an electronic message with a signature, where the public key is omitted.
  • Receiving a first elliptic curve point (R) associated with a signature component.
  • Recovering the omitted public key (Q) based on the received point and signature.
  • This recovery step comprises computing Q=r⁻¹(sR-eG), where r and s are signature components, e is a hash of the message, and G is a generator point.
  • Verifying the signature using the recovered public key, which provides an "accelerated verification."
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,284,370 - “Accelerated Verification of Digital Signatures and Public Keys,” issued May 7, 2019

The Invention Explained

• As the ’370 Patent shares a common specification with the ’827 Patent, its technical background, problem addressed, and solution are substantively identical (Compl. ¶71). The invention is directed at reducing the computational expense of ECDSA signature verification.

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶144).
• Essential elements of claim 1, for a computing device, include:
  • A receiver configured to receive an electronic message with a signature, where the public key is omitted.
  • A hardware processor configured to receive a first elliptic curve point (R).
  • The processor is further configured to recover the omitted public key (Q) by computing Q=r⁻¹(sR-eG).
  • The processor is further configured to verify the signature using the recovered public key, thereby providing an "accelerated verification."
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 7,372,960 - “Method and Apparatus for Performing Finite Field Calculations,” issued May 13, 2008

• Technology Synopsis: The patent relates to efficient "finite field engines" for cryptographic systems (Compl. ¶91). It addresses the problem that finite field elements in ECC are often too large to fit in a single machine word, requiring multiple words and inefficient processing (Compl. ¶98; ’960 Patent, col. 2:38-51). The invention provides for a "wordsized" approach where operations are performed on elements represented by a fixed number of machine words to generate an unreduced result, which is then reduced using a specific modular reduction routine, improving processing speed and efficiency (Compl. ¶100; ’960 Patent, col. 3:51-4:4).
• Asserted Claims: At least independent claim 3 is asserted (Compl. ¶152).
• Accused Features: The complaint alleges that bitcoin mining equipment and wallets that comply with the Bitcoin protocol infringe by performing finite field operations using the patented techniques (Compl. ¶152).

U.S. Patent No. 8,666,062 - “Method and Apparatus for Performing Finite Field Calculations,” issued March 4, 2014

• Technology Synopsis: As a continuation of the ’960 Patent, this patent shares the same specification and is directed at the same technology for efficiently performing finite field calculations in cryptographic systems (Compl. ¶90).
• Asserted Claims: The complaint asserts at least independent claim 1 (Compl. ¶156, referencing Exhibit 10).
• Accused Features: The complaint alleges that bitcoin mining equipment and wallets that comply with the Bitcoin protocol infringe by performing finite field operations using the patented techniques (Compl. ¶156).

U.S. Patent No. 8,532,286 - “System and Method for Reducing the Computation and Storage Requirements for a Montgomery-Style Reduction,” issued September 10, 2013

• Technology Synopsis: The patent addresses the computational slowness of modular reduction, particularly Montgomery reduction, used in cryptography (Compl. ¶106). The invention teaches using a pre-computed "modified reduction value" in place of the standard modulus and another pre-computed value (µ) to perform the bulk of the reduction, which is alleged to reduce the number of required multiplications and registers (Compl. ¶¶113, 158).
• Asserted Claims: At least independent claim 1 is asserted (Compl. ¶160).
• Accused Features: The complaint accuses Defendant's bitcoin mining machines and HPC devices of infringement (Compl. ¶¶160, 163).

U.S. Patent No. 8,712,039 - “Efficient Implementation of Hash Algorithm on a Processor,” issued April 29, 2014

• Technology Synopsis: The patent addresses challenges in implementing SHA-2 family hash algorithms on processors with a limited number of registers, such as ARM processors (Compl. ¶118). The solution involves "categorizing and unrolling" algorithm iterations into "even" and "odd" iterations and reversing the sequence of computation in the even iterations. This technique is alleged to allow for the reuse of values already in registers from the previous iteration, reducing the average number of memory load operations by at least half (Compl. ¶119).
• Asserted Claims: At least independent claim 1 is asserted (Compl. ¶168).
• Accused Features: The complaint accuses Defendant's bitcoin mining equipment (which uses SHA-256) and its HPC and AI compute workloads of infringement (Compl. ¶168).

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are Defendant Core Scientific's services and associated hardware, categorized as: (1) Bitcoin Mining Operations, including both self-mining and hosted mining for customers; and (2) High-Performance Computing (HPC) and colocation services, including for Artificial Intelligence (AI) workloads (Compl. ¶¶ 49, 54).

Functionality and Market Context

• Defendant’s Bitcoin Mining operations utilize specialized computer servers with Application-Specific Integrated Circuits (ASICs), such as the Antminer S19J XP and S21, which are designed specifically to perform the SHA-256 cryptographic hash algorithm for the Bitcoin network (Compl. ¶¶ 46, 53). These operations involve validating transactions by verifying ECDSA digital signatures and solving cryptographic puzzles ("proof-of-work") to add new blocks to the blockchain (Compl. ¶¶ 51, 53). The complaint cites a diagram from the Bitcoin Whitepaper to illustrate the chain of digital signatures that forms the basis of a transaction (Compl. ¶12; p. 7).
• Defendant’s HPC hosting services provide data center infrastructure for third-party customers, such as CoreWeave, to run computationally intensive workloads, including AI applications on NVIDIA GPUs (Compl. ¶¶ 55-56). These activities are also alleged to involve the processing of SHA-256 calculations (Compl. ¶60).
• The complaint alleges Defendant is one of the largest Bitcoin miners in the world and operates a distributed network of data centers across the United States (Compl. ¶¶ 41-42). One of the complaint's visuals is a map from Defendant's website showing its "Distributed Operations" (Compl. p. 27).

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits that were not provided. The narrative infringement theory for the lead patents is summarized below.

Narrative Summary for ’827 and ’370 Patents

• The complaint alleges that Defendant’s mining and hosting activities involve participation in the Bitcoin network (Compl. ¶¶ 51-52). A fundamental part of this participation is the validation of transactions, which are secured by ECDSA digital signatures using the secp256k1 curve, the same cryptographic standard described in the patents (Compl. ¶51). The complaint asserts that the Bitcoin protocol itself includes functionality for both verifying signatures and recovering a public key from a signature, and that this functionality was built upon the patented inventions of Certicom (a predecessor-in-interest to Plaintiff) (Compl. ¶¶ 9, 15, 84). The core of the infringement allegation is that by making, using, or selling systems that comply with the Bitcoin protocol—such as mining rigs and digital wallets—Defendant necessarily practices the patented methods for accelerated verification and public key recovery (Compl. ¶¶ 136, 144). A diagram from the Bitcoin whitepaper is used to illustrate how the blockchain is constructed as a chronological ledger of chained transactions (Compl. p. 24).

Identified Points of Contention

• Scope Questions: A central question may be whether the standard procedures for verifying transactions and recovering public keys as implemented in the Bitcoin protocol fall within the scope of the claims. For example, does the term "recovering the omitted public key...by computing Q=r⁻¹(sR-eG)" read on the exact algorithm used by the software and hardware in Defendant's operations?
• Technical Questions: The claims require that the verification be "accelerated." A potential point of contention is what evidence demonstrates that the methods used in the accused systems are in fact "accelerated" in the manner contemplated by the patents. The dispute may focus on whether simply being part of the modern, efficient Bitcoin protocol constitutes "accelerated verification," or if it requires implementing the specific mathematical optimizations detailed in the patent specification, such as the use of reduced-bit-length integers.

V. Key Claim Terms for Construction

The Term: "recovering... the omitted public key ... by computing Q=r⁻¹(sR-eG)" (from claim 1 of both the '827 and '370 Patents)

Context and Importance

• This term recites the specific mathematical formula for public key recovery that forms the core of the infringement allegation against the accused Bitcoin-related activities. The outcome of the case may hinge on whether the Bitcoin protocol is found to practice this exact computational step.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The specification introduces public key cryptography and digital signatures in general terms, suggesting the invention is a broadly applicable improvement to such systems ('370 Patent, col. 1:12-4:47). Parties may argue the specific formula is representative of a broader principle of efficient key recovery.
• Evidence for a Narrower Interpretation: The detailed description and Figure 14 explicitly illustrate this specific formula ('370 Patent, Fig. 14). The patent abstract also describes an alternative method for accelerated verification (-zR+(zu mod n)G+wQ=O), suggesting that the claimed formula is one of several distinct and specific embodiments, which could support a narrower construction.

The Term: "accelerated verification" (from claim 1 of both the '827 and '370 Patents)

Context and Importance

• This term is a required functional result of the claimed method. Practitioners may focus on this term because its definition will determine the evidentiary burden for proving infringement; specifically, what baseline the verification must be "accelerated" relative to.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The background section frames the problem as ECDSA verification taking "1.5 times as long as computing kG" ('370 Patent, col. 3:21-22). This could support an argument that any method faster than this baseline meets the "accelerated" limitation.
• Evidence for a Narrower Interpretation: The summary of the invention and abstract focus on specific techniques for achieving acceleration, namely the use of integers w and z with reduced bit lengths ('370 Patent, Abstract; col. 4:55-61). This could support an argument that "accelerated verification" is not just any faster method, but one that achieves its speed via the specific novel techniques taught in the patent.

VI. Other Allegations

Indirect Infringement

• The complaint alleges both induced and contributory infringement for all asserted patents. The inducement theory is based on Defendant deploying and operating bitcoin mining machines and HPC devices for its customers, which allegedly causes them to directly infringe (Compl. ¶¶ 138, 146, 162, 170). The contributory infringement theory alleges that the mining machines and HPC devices supplied by Defendant are a material part of the claimed inventions and are not staple articles of commerce with substantial non-infringing uses (Compl. ¶¶ 139, 147, 163, 171).

Willful Infringement

• The complaint alleges willful infringement for all asserted patents, based on Defendant’s alleged knowledge of the patents since at least March 28, 2025, from pre-suit notice letters and its subsequent failure to cease the accused activities (Compl. ¶¶ 140, 148, 151, 155, 159, 167).

VII. Analyst’s Conclusion: Key Questions for the Case

• A core issue will be one of technical mapping: Does the standard implementation of cryptographic functions within the Bitcoin protocol and related hardware (e.g., ASICs, GPUs), as used in Defendant’s operations, practice the specific algorithms recited in the asserted claims, or does it use functionally similar but technically distinct methods?
• A key legal question will be one of claim construction: Can terms like "accelerated verification" from the '827 and '370 patents be construed broadly to cover modern, efficient protocols, or will they be limited to the specific mathematical optimizations detailed in the patent specifications?
• A central evidentiary question for the hardware-focused patents ('960, '062, '286, '039) will be whether the low-level architecture and instruction sets of Defendant’s ASICs and hosted HPC equipment implement the patented methods for optimizing register usage and modular arithmetic, or if they achieve efficiency through alternative, non-infringing designs.