DCT

7:25-cv-00222

Malikie Innovations Ltd v. Mara Holdings

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: Malikie Innovations Ltd. v. MARA Holdings, Inc., 7:25-cv-00222, W.D. Tex., 05/12/2025
  • Venue Allegations: Venue is based on Defendant owning and operating bitcoin mining facilities within the Western District of Texas, including in McCamey and Hearne, Texas.
  • Core Dispute: Plaintiff alleges that Defendant’s large-scale bitcoin mining operations and related cryptocurrency transactions infringe six patents related to foundational techniques for accelerating and securing elliptic curve cryptography (ECC).
  • Technical Context: The patents concern computational efficiencies and security enhancements for ECC, a form of public-key cryptography that underpins the digital signature framework of the Bitcoin protocol and other blockchain technologies.
  • Key Procedural History: The asserted patents originate from a portfolio developed by Certicom Corp. and later acquired by Blackberry Ltd. The complaint alleges Plaintiff sent pre-suit notice letters to Defendant on March 28, 2025, and April 18, 2025, identifying the patents and the accused activities.

Case Timeline

Date Event
2001-12-26 ’961 Patent Application Date
2001-12-31 ’960 & ’062 Patents Priority Date
2005-01-18 ’827 & ’370 Patents Priority Date
2008-05-13 ’960 Patent Issued
2008-05-13 ’961 Patent Issued
2009-07-17 ’286 Patent Priority Date
2013-09-10 ’286 Patent Issued
2014-03-04 ’062 Patent Issued
2014-07-22 ’827 Patent Issued
2017-01-01 Approximate start of MARA's accused bitcoin mining activities
2019-05-07 ’370 Patent Issued
2025-03-28 Plaintiff sent first pre-suit notice letter to Defendant
2025-04-18 Plaintiff sent second pre-suit notice letter to Defendant
2025-05-12 Complaint Filing Date

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 that verifying a digital signature using the Elliptic Curve Digital Signature Algorithm (ECDSA) is computationally expensive, appearing to take "twice as long as the creation of an ECDSA signature" (Compl. ¶65; ’827 Patent, col. 3:9-13). This inefficiency stems from the verification process requiring two scalar multiplications, whereas the signing process requires only one (Compl. ¶65; ’827 Patent, col. 3:13-17).
  • The Patented Solution: The invention proposes methods to accelerate this verification process. One described technique involves recovering the signer's public key (Q) from the signature components (r, s) and a recovered ephemeral public key (R) by computing Q=r⁻¹(sR-eG), where G is a generator of the elliptic curve group (Compl. ¶68; ’827 Patent, col. 4:48-5:4). By enabling faster verification, the invention allows for more signatures to be processed in a given period (Compl. ¶68). The complaint highlights that a bitcoin transaction is fundamentally a "chain of digital signatures" recorded on a public ledger (Compl. ¶12), illustrated by a diagram from the Bitcoin whitepaper (Compl. p. 6).
  • Technical Importance: Accelerating signature verification is a critical technological improvement for systems that must process a high volume of secure transactions, as computational bottlenecks can limit scalability and performance (Compl. ¶66).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 of the ’827 Patent (Compl. ¶124).
  • The complaint summarizes the invention of the ’827 Patent as a method for generating a public key of a digital signature signer by:
    • computing Q=r⁻¹(sR-eG)
    • where G is a generator of an elliptic curve group that includes a first elliptic curve point R and a second elliptic curve point Q (Compl. ¶122).
  • 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

  • Problem Addressed: As a continuation of the ’827 Patent, this patent addresses the same technical problem of computational inefficiency in ECDSA signature verification (Compl. ¶¶55, 65).
  • The Patented Solution: The ’370 Patent shares a common specification with the ’827 Patent and discloses similar solutions for accelerating signature verification (Compl. ¶55). The core concept involves mathematically reformulating the verification equation to reduce computational load, such as by recovering a public key that was omitted from a message to save bandwidth (Compl. ¶127; ’370 Patent, Abstract). This process relies on cryptographic operations involving the signature components and known points on the elliptic curve (Compl. ¶127; ’370 Patent, col. 4:48-5:4).
  • Technical Importance: As with the parent ’827 Patent, this technology provides a technological improvement by reducing the time and resources required to validate digital signatures in high-throughput cryptographic systems (Compl. ¶66).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 of the ’370 Patent (Compl. ¶129).
  • The complaint summarizes the invention of the ’370 Patent as a method for verifying a digital signature included with a message using a public key omitted from the message but recovered by:
    • computing Q=r⁻¹(sR-eG)
    • where G is a generator of an elliptic curve group that includes the elliptic curve point R and the elliptic curve point Q
    • and wherein e is a hash value computed from the electronic message M (Compl. ¶127).
  • 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 addresses the technical problem that finite field elements used in ECC are often too large to be represented in a single machine word (e.g., 16, 32, or 64 bits), requiring complicated and slow multi-word calculations (Compl. ¶¶82, 83; ’960 Patent, col. 2:38-50). The patented solution provides a method for performing finite field operations by representing each element as a predetermined number of machine words, performing a non-reducing wordsized operation, and then performing a specific modular reduction to obtain the final result (Compl. ¶84; ’960 Patent, col. 4:50-59).
  • Asserted Claims: At least claim 3 (Compl. ¶134).
  • Accused Features: Hardware and software compliant with the Bitcoin protocol, including mining equipment and wallets (Compl. ¶134).

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

  • Issued: March 4, 2014
  • Technology Synopsis: This patent, which shares a specification with the ’960 Patent, is directed to similar efficiency improvements for finite field calculations (Compl. ¶74). The described solution involves obtaining a first set of instructions for a finite field operation to generate an unreduced result, and then obtaining and executing a second set of instructions for a modular reduction for a specific finite field to generate the reduced result for use in a cryptographic operation (Compl. ¶85; ’062 Patent, col. 4:50-59).
  • Asserted Claims: At least claim 1 (Compl. ¶¶136, 138, Exhibit 10).
  • Accused Features: Hardware and software compliant with the Bitcoin protocol, including mining equipment and wallets (Compl. ¶138).

U.S. Patent No. 7,372,961 - “Method of Public Key Generation”

  • Issued: May 13, 2008
  • Technology Synopsis: The patent addresses a security vulnerability where standard methods for generating ephemeral keys can inadvertently introduce a statistical bias, which an attacker could exploit to extract a private key (Compl. ¶95; ’961 Patent, col. 2:32-40). The patented solution is a method that eliminates this bias by generating a potential key, determining whether its value is less than the group order "q" before performing a modular reduction, and rejecting and regenerating the key if it is not, thereby ensuring a uniform distribution (Compl. ¶97; ’961 Patent, col. 3:23-44).
  • Asserted Claims: At least claim 1 (Compl. ¶142).
  • Accused Features: Hardware and software compliant with the Bitcoin protocol, including mining equipment and wallets (Compl. ¶142).

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 inefficiencies in Montgomery reduction, a form of modular arithmetic, which traditionally requires storing and using multiple values ("μ" and "n"), consuming significant register space and computational resources (Compl. ¶¶106-108; ’286 Patent, col. 2:60-65). The invention teaches using a "modified operand" computed with a pre-calculated "reduction value" that is a function of the modulus, which replaces the least significant word of the operand and reduces the number of required multiplications and registers (Compl. ¶109; ’286 Patent, col. 4:45-56).
  • Asserted Claims: At least claim 1 (Compl. ¶146).
  • Accused Features: Hardware and software compliant with the Bitcoin protocol, including mining equipment and wallets (Compl. ¶146).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentalities are Defendant MARA’s bitcoin mining operations and associated services and products that comply with the Bitcoin protocol (Compl. ¶¶42, 124). This includes specialized hardware and software for digital asset mining (e.g., mining rigs, ASICs, computers, nodes, miners) and digital asset wallets (Compl. ¶124).
  • Functionality and Market Context:
    • MARA is alleged to be one of the world's largest Bitcoin miners, operating facilities with hundreds of thousands of specialized mining computers (Compl. ¶¶38-39). The core function of these operations is to provide "transaction verification services" by solving complex cryptographic problems to add new blocks to the Bitcoin blockchain (Compl. ¶41). This process allegedly involves verifying digital signatures consistent with the Bitcoin protocol's use of ECDSA and the secp256k1 curve (Compl. ¶42). The complaint illustrates the structure of the Bitcoin blockchain using a diagram from the Bitcoin whitepaper (Compl. p. 21).
    • The complaint alleges MARA also generates its own digital signatures when it sells or transfers the bitcoin it has mined, and uses digital asset wallets to manage these transactions (Compl. ¶¶43-44). These activities are described as "major" or "central" to MARA's business and its primary source of revenue (Compl. ¶¶41, 46).

IV. Analysis of Infringement Allegations

  • U.S. Patent No. 8,788,827 Infringement Allegations

    • The complaint references an exemplary claim chart in Exhibit 7, which was not attached to the filed complaint document, purporting to show infringement of at least claim 1 (Compl. ¶124). The infringement theory articulated in the complaint is that MARA's hardware and software, by complying with the Bitcoin protocol, practice the claimed method for generating a public key (Compl. ¶124). The complaint alleges that the Bitcoin protocol and its standard implementation of ECDSA signature verification perform the steps of generating a public key of a signer by computing Q=r⁻¹(sR-eG), where R and Q are elliptic curve points and G is the group generator, a technique central to the patent (Compl. ¶122). MARA's mining operations allegedly perform this verification step repeatedly to validate transactions on the Bitcoin network (Compl. ¶42).

  • Identified Points of Contention:

    • Scope Questions: A central question may be whether the operations performed by standard Bitcoin software for verifying transactions constitute "generating a public key" as claimed. The defense may argue that the software is merely verifying a pre-existing signature against a known public key, not generating the public key itself from the signature components in the manner claimed.
    • Technical Questions: A factual dispute may arise over whether the specific mathematical operations implemented in the Bitcoin Core software library (e.g., libsecp256k1) map directly onto the formula Q=r⁻¹(sR-eG) as recited in the claims and described in the patent specification.

  • U.S. Patent No. 10,284,370 Infringement Allegations

    • The complaint references an exemplary claim chart in Exhibit 8, which was not attached to the filed complaint document, purporting to show infringement of at least claim 1 (Compl. ¶129). The infringement theory is parallel to that for the ’827 Patent. It alleges that MARA's Bitcoin-compliant systems practice the claimed method of verifying a digital signature where the public key is omitted from the message but recovered using the formula Q=r⁻¹(sR-eG) (Compl. ¶127). The complaint alleges that this is how the Bitcoin protocol operates, by transmitting signatures from which the public key can be recovered to verify the transaction without needing the public key to be sent separately (Compl. ¶127, 129).

  • Identified Points of Contention:

    • Scope Questions: Similar to the '827 Patent, a key issue will be claim construction around the term "recovered by computing." The dispute may focus on whether the standard process of validating a Bitcoin transaction inherently performs the specific recovery and computation steps of the claim, or if it performs a functionally different, albeit related, verification process.
    • Technical Questions: The analysis may turn on evidence of how public keys are handled in Bitcoin transactions. Does the protocol functionally "omit" the public key from the message in the manner contemplated by the patent, relying on the signature itself for its recovery, or is the public key typically available through other means (e.g., from a previous transaction output)?

V. Key Claim Terms for Construction

For the ’827 and ’370 Patents

  • The Term: "generating a public key ... by computing Q=r⁻¹(sR-eG)" (’827 Patent) and "recovering [a public key] by computing Q=r⁻¹(sR-eG)" (’370 Patent).
  • Context and Importance: The case may hinge on the definition of these active phrases. Practitioners may focus on whether the standard ECDSA verification process performed by Bitcoin nodes—which checks if a given signature corresponds to a given public key—is the same as actively "generating" or "recovering" that public key from the signature, as the claims require. MARA's alleged infringement for its verification activities depends on these processes being equivalent.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the overall context as "verifying the equality of a relationship" between points on an elliptic curve (’370 Patent, col. 4:42-45). This language may support an interpretation where any process that mathematically confirms the relationship, even if for verification purposes, falls within the scope of "generating" or "recovering" the key as part of that process. The specification also notes that the overall goal is to "accelerate[] verification" (Abstract).
    • Evidence for a Narrower Interpretation: The specification explicitly describes the process as a way to "recover[] a public key from an ECDSA signature" (’370 Patent, col. 6:1-2) and shows a diagram where the output of the computation is "Confirm Q = public key of sender" (’370 Patent, Fig. 14). This could support a narrower reading that requires the explicit calculation and output of the public key Q, rather than just an internal confirmation of a mathematical equality for a verification check.

VI. Other Allegations

  • Willful Infringement: The complaint alleges willful infringement for all six asserted patents. The basis for this allegation is Defendant’s alleged knowledge of the patents and their infringement since at least March 28, 2025, and April 18, 2025, the dates of pre-suit notice letters sent by Plaintiff (Compl. ¶¶110, 123, 128, 133, 137, 141, 145). The complaint alleges that Defendant did not take any action to stop its infringement after being put on notice (Compl. ¶¶123, 125).

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

This case presents several critical questions at the intersection of open-source protocol standards and patented cryptographic methods.

  • A central issue will be one of operational equivalence: Do the standardized transaction verification steps embedded in the open-source Bitcoin protocol perform the specific, patented methods for "generating" or "recovering" a public key and executing computationally efficient finite field operations, or is there a fundamental mismatch between the general-purpose protocol and the claimed technical improvements?
  • A key question of claim scope will be whether the patents, which are directed at specific improvements to cryptographic algorithms, can be construed to cover the routine implementation of the broader Bitcoin protocol, which was developed independently and incorporates various cryptographic primitives. The court's interpretation of terms like "generating," "recovering," and "performing a finite field operation" will be dispositive.
  • An evidentiary question will focus on proof of practice: Beyond mere compliance with the Bitcoin protocol, what evidence can Plaintiff provide that Defendant's specific hardware and software configurations (e.g., its ASICs, mining pool software, and wallet services) actually execute the patented methods step-by-step as claimed?