Malikie Innovations Ltd v. Foundry Digital LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Malikie Innovations Ltd. (Ireland) and Key Patent Innovations Ltd. (Ireland)
  • Defendant: Foundry Digital LLC (Delaware); Fortitude Mining, LLC (Delaware); Riot Platforms, Inc. (Nevada); and Cipher Mining Inc. (Delaware)
  • Plaintiff’s Counsel: Reichman Jorgensen Lehman & Feldberg LLP
• Case Identification: 7:25-cv-00567, W.D. Tex., 12/12/2025
• Venue Allegations: Plaintiffs allege venue is proper in the Western District of Texas because all Defendants own or operate substantial Bitcoin mining facilities within the district, conduct business in the district, and are members of the Texas Blockchain Council, an industry association promoting Texas as a hub for Bitcoin innovation.
• Core Dispute: Plaintiff alleges that Defendants’ large-scale Bitcoin mining operations, including participation in the Foundry USA mining pool, infringe five patents related to foundational elliptic curve cryptography and high-efficiency cryptographic hashing techniques.
• Technical Context: The technologies at issue involve methods for accelerating digital signature verification, performing finite field calculations, and implementing secure hash algorithms, which are fundamental to the operation and security of the Bitcoin network.
• Key Procedural History: The complaint asserts that the patents-in-suit originate from a portfolio developed by Certicom Corporation and Blackberry Ltd., entities it describes as pioneers in elliptic curve cryptography. It alleges that technology developed and patented by Certicom was foundational to the Bitcoin protocol, specifically the choice of the "secp256k1" elliptic curve for digital signatures. No prior litigation or post-grant validity challenges concerning the asserted patents are mentioned.

Case Timeline

Date	Event
2001-12-31	Earliest Priority Date for ’062 Patent
2005-01-18	Earliest Priority Date for ’827 Patent and ’197 Patent
2009-07-17	Earliest Priority Date for ’286 Patent
2011-04-06	Earliest 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
2014-08-12	’197 Patent Issued
2017	Riot Platforms allegedly begins infringing mining activities
2020	Foundry Digital allegedly begins infringing mining activities
2022	Cipher Mining allegedly begins infringing mining activities
2025	Fortitude Mining allegedly begins infringing mining activities
2025-12-12	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"

The Invention Explained

• Problem Addressed: The patent’s background section, as referenced in the complaint, identifies a performance bottleneck in standard Elliptic Curve Digital Signature Algorithm (ECDSA) schemes. Specifically, the verification process involves two computationally expensive scalar multiplications, making it significantly slower (e.g., 1.5 to 2 times slower) than the signature creation process, which requires only one. (Compl. ¶111).
• The Patented Solution: The invention claims a method to accelerate verification by generating the signer's public key (Q) directly from the components of the digital signature itself (r, s), an ephemeral public key (R), and a hash of the message (e). (Compl. ¶¶ 114, 162). The patent details a specific formula, Q=r⁻¹(sR-eG), that allows a verifier to compute the public key rather than receiving it separately, thereby reducing the data that must be transmitted or stored. (’827 Patent, col. 4:48-5:4).
• Technical Importance: This approach was designed to reduce bandwidth and storage requirements while accelerating the overall signature verification process, enabling a higher throughput of verifications in a given period. (Compl. ¶114).

Key Claims at a Glance

• The complaint asserts independent claim 1 and reserves the right to assert others. (Compl. ¶167).
• Essential elements of independent claim 1 include:
  • Receiving a signature on a message M, the signature including components r and s.
  • Obtaining an elliptic curve point R associated with the component r.
  • Generating a public key Q of the signer based on the point R, a hash e of the message, and the signature components.
  • Wherein the generation step comprises computing Q=r⁻¹(sR−eG).

U.S. Patent No. 8,806,197 - "Accelerated Verification of Digital Signatures and Public Keys"

The Invention Explained

• Problem Addressed: Like its related ’827 Patent, this patent addresses the computational expense and relative slowness of the ECDSA signature verification process. (Compl. ¶111).
• The Patented Solution: This invention claims a method for generating a digital signature that includes an "indicator" to help a verifier resolve ambiguity. When recovering the ephemeral public key R from a signature component r, there can be multiple possible points on the elliptic curve. The claimed indicator is generated by the signer to identify which of these potential values is the correct one, thereby accelerating the recovery of R and, consequently, the entire verification process. (Compl. ¶¶ 113, 171; ’197 Patent, Abstract).
• Technical Importance: By simplifying the recovery of the ephemeral public key, this technique provides a technological improvement that accelerates digital signature verification. (Compl. ¶113).

Key Claims at a Glance

• The complaint asserts independent claim 1 and reserves the right to assert others. (Compl. ¶176).
• Essential elements of independent claim 1 include:
  • Generating a digital signature having first (r) and second (s) components, where the first component is based on a coordinate of an ephemeral public key.
  • Generating an indicator for use with the signature.
  • The indicator serves to identify which of multiple values recoverable from the first signature component is the ephemeral public key.

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

• Technology Synopsis: The patent addresses performance issues in implementing elliptic curve cryptography across various finite fields, which can lead to inefficient code or excessively large code size. (Compl. ¶¶ 124-125). The claimed solution is a "finite field engine" that separates the primary finite field operation (e.g., multiplication) from the modular reduction step, allowing for the creation of fast, optimized engines for specific finite fields without duplicating the bulk of the program instructions. (’062 Patent, col. 4:21-25; Compl. ¶127).
• Asserted Claims: At least independent claim 1. (Compl. ¶182).
• Accused Features: The complaint alleges that Bitcoin mining equipment and wallets perform finite field operations in a manner that infringes the claimed methods. (Compl. ¶182).

U.S. Patent No. 8,532,286 - "System and Method for Reducing the Computation and Storage Requirements for a Montgomery-Style Reduction"

• Technology Synopsis: The patent describes an improvement to Montgomery reduction, a type of modular arithmetic common in cryptography that can be slow and require significant storage for precomputed values. (Compl. ¶¶ 132, 137). The invention uses a single "modified reduction value" in place of two standard values (μ and n) for the bulk of the operation, which is alleged to reduce the number of required multiplications and processor registers. (’286 Patent, col. 5:28-36; Compl. ¶139).
• Asserted Claims: At least independent claim 1. (Compl. ¶189).
• Accused Features: The complaint accuses Bitcoin mining equipment and wallets of using the claimed efficient Montgomery-style reduction techniques. (Compl. ¶189).

U.S. Patent No. 8,712,039 - "Efficient Implementation of Hash Algorithm on a Processor"

• Technology Synopsis: The patent addresses the challenge of efficiently implementing secure hash algorithms (such as the SHA-2 family used in Bitcoin) on processors with a limited number of registers. (Compl. ¶144). The claimed method minimizes the need to load data from memory by categorizing algorithm iterations into "even" and "odd" sets and reversing the computation sequence, which allows values remaining in registers from one iteration to be reused in the next. (Compl. ¶145).
• Asserted Claims: At least independent claim 1. (Compl. ¶198).
• Accused Features: The complaint accuses hardware and software for Bitcoin mining, including application-specific integrated circuits (ASICs), of using these patented techniques for efficiently performing hash operations. (Compl. ¶198).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are the Defendants' comprehensive Bitcoin mining operations, encompassing their use of specialized hardware (e.g., ASICs), software, and participation in mining pools, all of which operate according to the Bitcoin protocol. (Compl. ¶¶ 8, 160, 167).

Functionality and Market Context

Defendants are alleged to be among the world's largest Bitcoin miners, operating facilities that collectively perform quintillions of cryptographic calculations per second. (Compl. ¶¶ 54, 60). A central component of the accused activity is participation in the Foundry USA Pool, which the complaint identifies as the world's largest Bitcoin mining pool, controlling over 30% of the global network's computational power, or "hashrate." (Compl. ¶45). A screenshot from hashrateindex.com is provided to illustrate Foundry's dominant market share. (Compl. ¶46, p. 29). The core technical functions of these mining operations include repeatedly performing SHA-256 hash functions to solve cryptographic puzzles and both generating and verifying ECDSA digital signatures to validate Bitcoin transactions and receive mining rewards. (Compl. ¶¶ 27, 43, 67-68). The complaint provides screenshots of blockchain transaction data allegedly showing transfers of Bitcoin from Foundry to pool members Riot and Cipher as evidence of this activity. (Compl. ¶¶ 58, 64, pp. 38, 41).

IV. Analysis of Infringement Allegations

The complaint references exemplary claim charts attached as exhibits (e.g., Exhibits 6 and 10) to detail its infringement contentions for the ’827 and ’197 patents. As these exhibits were not provided with the complaint, the infringement theory is summarized below in prose.

’827 Patent Infringement Allegations

The complaint alleges that Defendants' Bitcoin mining and transaction processing activities directly infringe at least claim 1 of the ’827 patent. (Compl. ¶167). The theory appears to be that the standard process for verifying a transaction on the Bitcoin network inherently practices the claimed method. A verifying node receives a transaction with a digital signature (r, s), uses r to recover an ephemeral public key R, and then computes the sender's public key Q using the claimed formula Q=r⁻¹(sR-eG) to validate the signature. (Compl. ¶¶ 114, 162). This computational recovery of the public key for verification purposes is alleged to constitute the claimed "generating... a public key." (Compl. ¶162).

’197 Patent Infringement Allegations

The complaint alleges that Defendants' generation of Bitcoin transactions infringes at least claim 1 of the ’197 patent. (Compl. ¶176). Bitcoin's implementation of ECDSA includes a "recovery ID" in the signature data. This ID allows a verifier to efficiently determine the correct ephemeral public key R from multiple possibilities derived from the r component of the signature. (Compl. ¶113). The complaint's theory is that generating a Bitcoin signature, which includes creating this recovery ID, constitutes generating the claimed "indicator to identify which value... is the ephemeral public key." (Compl. ¶171). The complaint includes a diagram from the Bitcoin Whitepaper illustrating how a Bitcoin is defined as a "chain of digital signatures," a concept central to the infringement allegations. (Compl. ¶15, p. 7).

Identified Points of Contention

• Scope Questions: The infringement reading for the ’827 patent may raise the question of claim scope. A central issue may be whether the computational recovery of a public key for the sole purpose of immediate verification against a known key constitutes "generating a public key" as recited in the claim, or if the claim implies generating a key for more general or future use.
• Technical Questions: For the efficiency-focused patents (’062, ’286, ’039), a key evidentiary question may be whether the accused ASICs and software actually implement the specific patented methods for optimization. For example, regarding the ’039 patent, the question may be what evidence shows that the accused mining hardware uses the claimed "even and odd iteration" technique for SHA-2 hashing, as opposed to achieving performance through other hardware-specific optimizations.

V. Key Claim Terms for Construction

The Term: "generating... a public key" (’827 Patent, claim 1)

• Context and Importance: The infringement case for the ’827 patent appears to turn on the construction of this phrase. Practitioners may focus on this term because the accused activity is signature verification, a process whose goal is to confirm authenticity, not necessarily to create a new, persistent public key. The dispute will likely center on whether computationally deriving a key as an intermediate step in a verification algorithm falls within the scope of "generating" a key.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification describes the computation of Q using the formula Q=(s/r)R−(e/r)G as a way to "recover" the public key. (e.g., ’827 Patent, Fig. 14). This language may support an argument that any act of computationally producing the public key Q constitutes "generating" it, regardless of the ultimate purpose.
  • Evidence for a Narrower Interpretation: The patent is titled "Accelerated Verification of Digital Signatures and Public Keys" and its abstract focuses on "digital signature verification." This context may support an argument that "generating a public key" should be understood as a step within the broader, claimed purpose of verification, potentially limiting its scope to that context, but also potentially creating tension with an argument that verification is not generation.

The Term: "indicator" (’197 Patent, claim 1)

• Context and Importance: The infringement case for the ’197 patent requires mapping the "recovery ID" used in Bitcoin signatures onto this term. The construction of "indicator" will be critical to determining if the specific data field used in the Bitcoin protocol meets the claim's requirements.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim requires an indicator "to identify which value of a plurality of values recoverable from [the signature] is said ephemeral public key." The specification discloses that this can be a single bit (y mod 2) that resolves the ambiguity between two possible y coordinates for the point R. (e.g., ’197 Patent, col. 12:1-12). This aligns closely with the alleged function of the Bitcoin recovery ID.
  • Evidence for a Narrower Interpretation: The complaint does not provide sufficient detail for analysis of intrinsic evidence that may support a narrower interpretation. A defendant may argue that specific details in the specification or prosecution history limit how the "indicator" must be structured or used in a way that the accused Bitcoin implementation does not satisfy.

VI. Other Allegations

Indirect Infringement

The complaint alleges that Riot, Cipher, and Fortitude indirectly infringe by inducing infringement by Foundry and others. The alleged inducement is based on their participation in the Foundry USA Pool, which allegedly encourages and requires the performance of the claimed methods (e.g., verifying and generating signatures) to facilitate Bitcoin mining and transactions. (Compl. ¶¶ 168, 177, 190).

Willful Infringement

Willfulness is alleged for all Defendants. For Foundry, Riot, and Cipher, the allegations are based on alleged pre-suit notice of the patents and their infringement since at least March 2025. For Fortitude, the allegation is based on notice since at least the filing of the complaint. The complaint asserts that Defendants failed to take any action to stop their infringement after being put on notice. (Compl. ¶¶ 163-166, 169).

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

• A core issue will be one of definitional scope: does the act of computationally recovering a public key as an intermediate step for signature verification, as performed in the Bitcoin protocol, constitute “generating a public key” as required by Claim 1 of the ’827 patent, or is the claim directed at a different technical process?
• A second key issue will be one of technical implementation: for the patents directed to computational efficiency (’062, ’286, ’039), what evidence will show that the accused Bitcoin mining ASICs and software practice the specific algorithmic improvements claimed, as opposed to achieving their performance through other, unpatented means inherent to their application-specific design?
• A central question for damages and liability will be apportionment: if infringement is found, how will liability be allocated between the mining pool operator (Foundry), which provides the platform and orchestrates the collective mining effort, and the pool members (Riot, Cipher, and Fortitude), which contribute the computational resources that perform the allegedly infringing acts?