Pardalis Technology Licensing LLC v. Coinbase Global Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Pardalis Technology Licensing, L.L.C. (Delaware)
  • Defendant: Coinbase Global, Inc. (Texas)
  • Plaintiff’s Counsel: Nelson Bumgardner Conroy PC; Cherry Johnson Siegmund James, PC
• Case Identification: 7:25-cv-00457, W.D. Tex., 01/30/2026
• Venue Allegations: Plaintiff alleges venue is proper because Defendant has committed acts of infringement in the Western District of Texas and maintains a regular and established place of business in the District, including through the physical offices and employees of its wholly-owned subsidiaries.
• Core Dispute: Plaintiff alleges that Defendant’s cryptocurrency exchange platform and related services infringe three patents related to systems for authoring, authenticating, and distributing uniquely identified, immutable "informational objects" within a distribution chain.
• Technical Context: The dispute is situated in the digital asset and cryptocurrency sector, focusing on the underlying blockchain technology used to create, verify, and record transactions on a distributed ledger.
• Key Procedural History: The complaint notes that during prosecution of the asserted patents, the applicant relied on the claimed improvements—such as creating new informational objects that relate back to prior ones—to demonstrate patentability over the prior art. Plaintiff also references its own 2004 white paper describing its "Common Point Authoring" system as a non-abstract technological improvement for tracking products in complex supply chains.

Case Timeline

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

U.S. Patent No. 6,671,696 - “Informational Object Authoring and Distribution System,” issued December 30, 2003 (’696 Patent)

The Invention Explained

• Problem Addressed: The patent describes the problem of authoring, maintaining, and distributing informational objects that contain immutable data, using the chemical industry's paper-based Material Safety Data Sheets (MSDS) as an example. This process is described as costly, redundant, and inefficient, with no central registry for such documents ('696 Patent, col. 1:13-62).
• The Patented Solution: The invention proposes an internet-based system that uses a centralized repository of "uniquely-identified, immutable data elements" ('696 Patent, Abstract). These data elements are described as "building blocks" of information. An "informational object" (e.g., an MSDS) does not contain the data itself but rather contains "pointers" that identify a plurality of these immutable building blocks ('696 Patent, col. 2:38-46). When a data element needs to be updated, a new version is created and the original is maintained in the database, ensuring a complete and immutable history ('696 Patent, col. 2:46-54).
• Technical Importance: The technology provided a framework for automating the creation and distribution of version-controlled, immutable records in a networked environment before blockchain technology was widely known.

Key Claims at a Glance

• The complaint asserts independent claim 12 (Compl. ¶ 71).
• Essential elements of claim 12 include:
  • maintaining in a read-only mode, a plurality of immutable data elements, each identified by a unique identifier;
  • maintaining in a read-only mode, a set of data that defines an informational object, comprising a plurality of said unique identifiers corresponding to a selected set of data elements;
  • enabling an authorized authoring member to create data comprising at least one of a draft data element and a draft informational object;
  • authenticating the draft data element or informational object;
  • converting the authenticated draft into a corresponding immutable data element or informational object;
  • writing the created immutable object or element into a memory for use by the maintaining means.
• The complaint expressly reserves the right to assert additional claims (Compl. ¶ 71, fn 39).

U.S. Patent No. 7,136,869 - “Common Point Authoring System for Tracking and Authenticating Objects in a Distribution Chain,” issued November 14, 2006 (’869 Patent)

The Invention Explained

• Problem Addressed: The patent family's technology is applied to tracking and authenticating objects as they move through a segmented distribution chain, such as the beef livestock industry. The specification identifies a problem of "inefficiencies in information flow" where data is rarely passed up or down the chain between independent segments like breeders, producers, and retailers ('869 Patent, col. 2:23-50).
• The Patented Solution: The invention provides a "Common Point Authoring system" that allows different owners in the chain to author and update informational objects tied to a product. A key aspect of the solution is the ability to update an object's history by creating a new version that includes a pointer to a replacement data element, while the original data remains in the database ('869 Patent, col. 5:24-30). This creates an auditable, historical record of the product. The system also introduces the concept of making the informational object itself a "distinct commodity separate and apart from the commodity of the physical or processed product" ('869 Patent, col. 1:50-55).
• Technical Importance: The system provides a method for creating a verifiable, chain-of-custody-like record for products moving through fragmented supply chains, where different parties contribute to the product's history over time.

Key Claims at a Glance

• The complaint asserts independent claim 9 (Compl. ¶ 90).
• Essential elements of claim 9 include:
  • enabling an authorized authoring member to create data comprising a draft informational object, which uniquely identifies a product for tracking purposes;
  • authenticating said draft informational object;
  • converting said authenticated informational object to a corresponding immutable informational object identified by a unique identifier;
  • writing said created immutable informational object into a memory for use by authorized accessing members; and
  • updating an informational object by creating a new informational object relating back to said informational object and containing new data.
• The complaint expressly reserves the right to assert additional claims (Compl. ¶ 71, fn 39).

U.S. Patent No. 7,949,668 - “Common Point Authoring System for the Complex Sharing of Hierarchically Authored Data Objects in a Distribution Chain,” issued May 24, 2011 (’668 Patent)

Technology Synopsis

This patent builds on the family's technology, focusing on the "complex sharing of hierarchically authored data objects." It details a system where different authorized members in a distribution chain can not only create and authenticate data but also incorporate data elements created by other members into new informational objects, enabling a more complex, multi-party authoring environment ('668 Patent, col. 23:4-53).

Asserted Claims

The complaint asserts at least method claim 7 ('668 Patent, col. 26:7-60; Compl. ¶ 108).

Accused Features

The complaint alleges that Coinbase's platform for creating and recording cryptocurrency transactions on a blockchain infringes the '668 Patent's claimed methods for creating and sharing data objects in a distribution chain (Compl. ¶¶ 109-110).

III. The Accused Instrumentality

Product Identification

The accused products include the Coinbase Platform, Coinbase Exchange, Coinbase Prime, and Coinbase Wallet (now Base App), as well as related internal systems (collectively, the "Accused Products") (Compl. ¶ 58).

Functionality and Market Context

The Accused Products provide a platform for users and institutions to trade, store, and spend digital assets like cryptocurrencies and tokens (Compl. ¶ 59). The complaint alleges this functionality relies on blockchain technology, which it describes as a "secure, immutable ledger" where each transaction is permanently recorded (Compl. ¶¶ 59, 62). The system allegedly uses public-private key cryptography to transfer ownership of digital assets (Compl. ¶ 59). Access to the services requires users to be verified through a "know-your-customer" (KYC) process, which authorizes them to conduct transactions (Compl. ¶ 63). The complaint presents a screenshot of the Coinbase mobile application's interface for buying and selling cryptocurrency to illustrate the user-facing functionality of the platform (Compl. Fig. 17, ¶ 72).

IV. Analysis of Infringement Allegations

’696 Patent Infringement Allegations

’869 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: A central question may be whether the term "informational object," described in the patents as tracking physical products (e.g., livestock) in a supply chain, can be construed to read on a purely digital cryptocurrency transaction recorded on a blockchain. Similarly, the construction of "product for tracking purposes" will be at issue, specifically whether it can encompass a digital asset like Bitcoin.
• Technical Questions: The analysis may focus on whether the technical operation of a blockchain maps to the specific steps claimed. For instance, does the decentralized consensus mechanism and creation of a new block containing a hash of the prior block perform the claimed step of "updating an informational object by creating a new informational object relating back to said informational object"? Another question is whether Coinbase's internal ledgering systems, which track user account activity (Compl. Fig. 20, ¶ 73), perform the claimed function of "maintaining...a plurality of immutable data elements," or if that function is performed by the public blockchain itself.

V. Key Claim Terms for Construction

The Term: "informational object"

• Context and Importance: This term is the foundational concept of the asserted claims. Its scope—whether it is limited to records tracking physical items or can encompass purely digital transactions—may be dispositive for the infringement analysis.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification states that informational objects "are not document files or database files, but instead are objects that contain sequences of instructions and information on which the instructions operate" ('869 Patent, col. 5:16-19). This abstract, software-oriented definition could support an interpretation that includes digital records like blockchain transactions.
  • Evidence for a Narrower Interpretation: The background consistently uses examples tied to physical items, stating the problem is tracking a "particular physical product or processed product as it progresses through an ownership segmented commercial supply, distribution, and consumption chain" ('869 Patent, col. 1:32-38). The use of the beef livestock industry as the primary example ('869 Patent, col. 2:6-10) may support a narrower construction.

The Term: "updating an informational object by creating a new informational object relating back to said informational object"

• Context and Importance: This step from the '869 Patent is what Plaintiff alleges corresponds to adding a new block to a blockchain. Practitioners may focus on this term because the specific mechanism of "relating back" is key to whether blockchain's hashing method infringes.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim language itself does not specify the mechanism for "relating back," which could allow it to cover any technical means of creating a historical link, such as a cryptographic hash.
  • Evidence for a Narrower Interpretation: The specification describes the update process as a new informational object including a "unique identifier that points to a replacement data element, while the original data element is maintained in the central database" ('869 Patent, col. 5:24-30). This could be interpreted as requiring a specific pointer/database architecture, which may differ from how a blockchain's distributed ledger and hashing function operate.

VI. Other Allegations

The complaint does not provide sufficient detail for analysis of indirect or willful infringement. The infringement counts are explicitly for direct infringement under 35 U.S.C. § 271(a) (Compl. pp. 35, 53, 68). While the prayer for relief requests enhanced damages, which is a remedy for willful infringement (Compl. ¶ 126(iv)), the complaint body does not allege specific facts to support a claim of pre-suit knowledge or egregious conduct that would typically underpin a willfulness allegation.

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

• A core issue will be one of definitional scope: can the term "informational object," rooted in the patent specifications' context of tracking physical products like livestock through a supply chain, be construed to cover purely digital constructs such as cryptocurrency transactions recorded on a blockchain?
• A central technical question will be one of functional mapping: does the operational mechanism of a decentralized blockchain—specifically, the creation of new blocks linked by cryptographic hashes—perform the specific sequence of steps required by the asserted claims, such as "updating an informational object by creating a new informational object relating back to said informational object"?
• The case may also raise a question of patent eligibility: given that the patents claim priority to 2001 and predate the widespread adoption of blockchain, the court will have to consider whether the claims, as applied to modern cryptocurrency systems, are directed to a concrete technological improvement (as Plaintiff argues, see Compl. Fig. 15) or an abstract idea of tracking asset provenance.