DCT

7:25-cv-00222

Malikie Innovations Ltd v. Mara Holdings Inc

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 7:25-cv-00222, W.D. Tex., 07/25/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant MARA Holdings, Inc. owns and/or operates bitcoin mining facilities within the district, including in McCamey and Hearne, Texas.
  • Core Dispute: Plaintiff alleges that Defendant’s bitcoin mining operations, transaction processing, and digital wallet functionalities, which are central to its business, infringe six patents related to foundational elliptic curve cryptography (ECC) techniques for accelerating and securing digital signatures.
  • Technical Context: Elliptic curve cryptography is a form of public-key cryptography that provides high levels of security with smaller key sizes compared to alternatives, making it a cornerstone technology for securing digital assets and transactions, particularly in the cryptocurrency space.
  • Key Procedural History: The complaint alleges that Plaintiff is the successor-in-interest to a patent portfolio developed by Certicom Corp. and Blackberry Ltd. Plaintiff also alleges that it provided Defendant with notice of the asserted patents and its belief of infringement via letters sent on March 28, 2025, and April 18, 2025, to which Defendant allegedly did not respond.

Case Timeline

Date Event
2001-12-26 Priority Date for U.S. Patent No. 7,372,961
2001-12-31 Priority Date for U.S. Patent Nos. 7,372,960 and 8,666,062
2005-01-18 Priority Date for U.S. Patent Nos. 8,788,827 and 10,284,370
2008-05-13 U.S. Patent No. 7372960 Issued
2008-05-13 U.S. Patent No. 7372961 Issued
2008-10-31 Bitcoin Whitepaper Published
2009-01-08 First Bitcoin Software Released
2009-07-17 Priority Date for U.S. Patent No. 8,532,286
2013-09-10 U.S. Patent No. 8532286 Issued
2014-03-04 U.S. Patent No. 8666062 Issued
2014-07-22 U.S. Patent No. 8788827 Issued
2017-01-01 Approximate Start of Alleged Infringing MARA Mining Activities
2019-05-07 U.S. Patent No. 10284370 Issued
2025-03-28 First Pre-Suit Notice Letter Allegedly Sent to Defendant
2025-04-18 Second Pre-Suit Notice Letter Allegedly Sent to Defendant
2025-07-25 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 specification, shared with the ’370 Patent, describes a performance bottleneck in the Elliptic Curve Digital Signature Algorithm (ECDSA). Specifically, it notes that verifying a signature takes approximately twice as long as creating one because verification involves two computationally expensive "scalar multiplications," whereas signing requires only one (Compl. ¶65; ’827 Patent, col. 3:10-18). This can slow down systems that perform many signature verifications.
  • The Patented Solution: The invention provides methods to accelerate cryptographic operations, including the recovery of a signer's public key from a digital signature. This is achieved by reformulating the verification equation to use integers with smaller bit lengths, which reduces the overall computational load (’827 Patent, Abstract). The complaint describes the technique as including the computation Q=r⁻¹(sR-eG) to generate the public key (Q) of a signer (Compl. ¶122).
  • Technical Importance: By reducing the time required for signature verification and public key recovery, the invention addresses a key performance limitation in systems that rely heavily on public key cryptography, such as the peer-to-peer transaction verification inherent in cryptocurrency networks (Compl. ¶57, 66).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶124).
  • Claim 1 of the ’827 Patent recites a method performed by a hardware processor for generating a public key, with key elements including:
    • Receiving an electronic message with a signature that omits the signer's public key.
    • Receiving a first elliptic curve point (R) associated with a signature component (r).
    • Recovering the omitted public key (Q) based on the first elliptic curve point and the signature.
    • Wherein recovering the public key comprises computing Q=r⁻¹(sR-eG), with G being a generator of the elliptic curve group.
    • Verifying the received signature using the recovered public key, which provides an accelerated verification.
  • The complaint reserves the right to assert other claims (Compl. ¶124).

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, the ’370 Patent addresses the same technical problem of computational inefficiency in ECDSA signature verification (Compl. ¶55, 65; ’370 Patent, col. 3:10-18).
  • The Patented Solution: The invention claims a method for verifying a digital signature where the public key is omitted from the message but recovered as part of the verification process. The core of the solution, as described in the specification, involves deriving integers of reduced bit length to accelerate the sum of scalar multiples calculation, thereby speeding up the verification equality check (’370 Patent, Abstract; col. 4:40-62). The complaint alleges this involves computing Q=r⁻¹(sR-eG) (Compl. ¶127).
  • Technical Importance: This technology is significant for decentralized networks like Bitcoin, where numerous independent nodes must continuously verify the authenticity of transactions to maintain the integrity of the blockchain ledger (Compl. ¶35-37).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶129).
  • Claim 1 of the ’370 Patent recites a method performed by a hardware processor for verifying a digital signature, with key elements including:
    • Receiving a signature on an electronic message, where the message omits the public key.
    • Receiving a first elliptic curve point (R) associated with a signature component.
    • Recovering the omitted public key (Q) based on the received elliptic curve point and the signature.
    • Wherein recovering the public key comprises computing Q=r⁻¹(sR-eG).
    • Verifying the signature using the recovered public key, which provides an accelerated verification.
  • The complaint reserves the right to assert other claims (Compl. ¶129).

Multi-Patent Capsule: U.S. Patent Nos. 7,372,960 and 8,666,062 (“Finite Field Engine Patents”)

  • Patent Identification: U.S. Patent No. 7,372,960, issued May 13, 2008, and U.S. Patent No. 8,666,062, issued March 4, 2014, both titled “Method and Apparatus for Performing Finite Field Calculations.”
  • Technology Synopsis: These patents address the technical challenge of implementing ECC efficiently across different finite fields and key sizes (Compl. ¶80-82). The disclosed solution is a "finite field engine" architecture that separates general, "wordsized" arithmetic operations (e.g., multiplication, addition) from the specific "modular reduction" step required for a particular finite field. This allows for code reuse and efficiency without sacrificing performance on specific fields (Compl. ¶84-85).
  • Asserted Claims: At least claim 3 of the ’960 Patent and at least claim 1 of the ’062 Patent (Compl. ¶134, 138).
  • Accused Features: The complaint alleges that MARA's activities utilize the Bitcoin protocol, which relies on finite field operations for its cryptographic functions, thereby infringing the patents (Compl. ¶134, 138).

Multi-Patent Capsule: U.S. Patent No. 7,372,961 (“Ephemeral Key Generation Patent”)

  • Patent Identification: 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 generating ephemeral keys (temporary private keys used for a single signature) can introduce statistical bias, potentially allowing an attacker to determine the long-term private key (Compl. ¶94-95). The invention provides a method for generating an unbiased key by hashing a random seed value and then accepting the hash output for use as the key only if it is less than the group order q, otherwise rejecting it and repeating the process (Compl. ¶97).
  • Asserted Claims: At least claim 1 (Compl. ¶142).
  • Accused Features: The complaint alleges that devices and software used by MARA that comply with the Bitcoin protocol infringe by practicing the claimed method of key generation (Compl. ¶142).

Multi-Patent Capsule: U.S. Patent No. 8,532,286 (“Improved Modular Reduction Patent”)

  • Patent Identification: 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: This patent describes an improvement to Montgomery reduction, a form of modular arithmetic used in cryptography. The conventional method requires storing two values (a precomputed value µ and the modulus n) and performing a multiplication to compute another value m in each step (Compl. ¶104-107). The invention teaches using a single "modified reduction value" in place of µ and n to reduce the number of required registers and computations, particularly benefiting resource-constrained architectures (Compl. ¶109).
  • Asserted Claims: At least claim 1 (Compl. ¶146).
  • Accused Features: The complaint alleges MARA's use of hardware and software compliant with the Bitcoin protocol, which utilizes modular arithmetic, infringes the patent (Compl. ¶146).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are Defendant MARA's bitcoin mining operations, which include hardware and software for digital asset mining (e.g., mining rigs, ASICs), transaction verification services, nodes, miners, and digital asset wallets (Compl. ¶124, 129).

Functionality and Market Context

  • The complaint alleges MARA is one of the world's largest bitcoin miners, operating mining facilities that perform cryptographic calculations to verify transactions and add new blocks to the Bitcoin blockchain (Compl. ¶38, 41). This process is described as requiring the verification of digital signatures consistent with the Bitcoin protocol, which uses ECDSA with the secp256k1 curve (Compl. ¶15, 42). The complaint includes a diagram from the Bitcoin Whitepaper illustrating how the blockchain is formed by linking cryptographic hashes of previous blocks, making it computationally difficult to alter past transactions (Compl. p. 21). MARA's business is alleged to rely on these cryptographic processes to earn block rewards and transaction fees (Compl. ¶41).
  • The complaint further alleges that MARA uses digital asset wallets for receiving and selling bitcoin, which are controllable only by the possessor of the unique public and private keys (Compl. ¶44). A diagram from the Bitcoin Whitepaper illustrates how ownership is transferred via a chain of digital signatures, where each owner signs a hash of the previous transaction and the public key of the next owner (Compl. p. 6).

IV. Analysis of Infringement Allegations

The complaint alleges infringement of all six patents by MARA's use of hardware and software that complies with the Bitcoin protocol (Compl. ¶124, 129, 134, 138, 142, 146). For each asserted patent, the complaint references an external exhibit containing an exemplary claim chart, but these exhibits are not attached to the filed complaint. As such, the specific mapping of claim elements to the accused instrumentality is not detailed in the public document.

’827 and ’370 Patent Infringement Allegations

  • Narrative Theory: The complaint alleges that MARA's bitcoin mining equipment and wallets, by complying with the Bitcoin protocol, directly infringe claims directed to accelerated verification and public key recovery (Compl. ¶124, 129). The core of the allegation is that the process of verifying transactions on the Bitcoin network necessarily involves recovering and verifying public keys associated with those transactions in a manner that practices the claimed methods, including the computation Q=r⁻¹(sR-eG) (Compl. ¶122, 127). The diagram from an ECC Primer included in the complaint illustrates the fundamental relationship between a message, a private key, and a public key in creating a verifiable digital signature (Compl. p. 19).
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether the term "recovering ... the omitted public key" as recited in the claims reads on the standard key derivation and validation processes implemented in the Bitcoin protocol's software libraries. The dispute may focus on whether the accused processes perform the specific computational steps in the order and manner required by the claims.
    • Technical Questions: An evidentiary question will be what specific algorithms are executed by the hardware and software MARA uses, and whether those algorithms perform the exact computation Q=r⁻¹(sR-eG) as claimed. The analysis may depend on whether the Bitcoin protocol’s standard implementation of ECDSA signature verification is functionally equivalent to the claimed method of "accelerated verification."

V. Key Claim Terms for Construction

  • The Term: "recovering ... the omitted public key of the signer ... compris[ing] computing Q=r⁻¹(sR-eG)" (from Claim 1 of both the ’827 and ’370 Patents).
  • Context and Importance: This term is the central inventive step recited in the asserted independent claims of the lead patents. The infringement case for these patents will hinge on whether the accused Bitcoin protocol implementation performs this specific computational step. Practitioners may focus on whether "recovering" implies a specific sequence of operations or merely arriving at the same mathematical result.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patents' background sections describe the problem of ECDSA verification inefficiency in general terms, which could support an interpretation where any method that calculates the public key Q using the variables s, r, R, e, G in the specified relationship falls within the claim scope, regardless of intermediate software implementation details (’827 Patent, col. 3:5-17).
    • Evidence for a Narrower Interpretation: The detailed description and figures of the shared specification describe specific processes and verification equalities, such as -zR+(zu mod n)G+wQ=O, derived from the original equation (’827 Patent, col. 4:55-62; Fig. 3). A defendant may argue that the term "comprising computing Q=r⁻¹(sR-eG)" should be limited to these specific disclosed embodiments or algorithms for achieving the "accelerated" result, rather than covering any implementation of the standard ECDSA public key recovery formula.

VI. Other Allegations

  • Indirect Infringement: The complaint focuses on allegations of direct infringement under 35 U.S.C. § 271(a) and does not plead specific facts to support claims for induced or contributory infringement (Compl. ¶124, 129, et al.).
  • Willful Infringement: The complaint alleges willful infringement for all asserted patents. This allegation is based on alleged pre-suit knowledge of the patents and infringement via letters sent to MARA on March 28, 2025, and April 18, 2025, and MARA's alleged failure to take any action to stop the infringement after being put on notice (Compl. ¶110, 123, 125, 128, 130).

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

This case presents a fundamental conflict between a widely adopted open-source technology standard and patents that purport to cover core efficiencies within that standard. The resolution will likely turn on the following key questions:

  • A primary issue will be one of technical specificity: Does the Bitcoin protocol’s standard implementation of cryptographic functions, such as ECDSA signature verification and ephemeral key generation, practice the specific, and in some cases architecturally distinct, methods claimed in the asserted patents, or is there a functional and structural mismatch?
  • A second core issue will be one of claim scope: Can claims directed to "accelerated" cryptographic methods, which were developed to solve known computational bottlenecks, be construed to cover the standard, widely implemented versions of those cryptographic algorithms, or are the claims limited to the specific novel computational shortcuts disclosed in the patent specifications?
  • A third question will relate to damages and industry practice: Given the foundational nature of the technology and its adoption by an entire industry through an open-source protocol years before the last patent issued, a central dispute, should infringement be found, will concern the appropriate measure of a reasonable royalty and the extent to which the patented technology, as opposed to the entire Bitcoin ecosystem, drives the value of the accused activities.