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BTC Mining Firm Layer1 Accused By Lancium For Patent Infringement

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Layer1 stands as a Bitcoin (BTC) mining company based in Western Texas, and is backed by big players such as the Digital Currency Group (DCG), as well as Peter Theil, the co-founder of Paypal. Now, however, it’s been hit with a recent lawsuit filed against it by Lancium, a data center power management firm. The lawsuit was filed within the Western District Court of Texas, and claims that Layer1 had infringed upon the patented technology of Lancium in order to adjust the usage of power within its BTC mining facilities.

Claiming Business Models Violate Patents

According to the complaint filed by Lancium, the “demand-response” model of Layer1 violates the patent of the firm. The model in question allows Layer1 to shut down its mining operations and then redirect power to the grid during periods of high demand.

The patent itself was granted to Lancium in March of this year, and pertains to a technology that helps adjust the consumption of power at “flexible” data centers. These data centers kick into action when the demand for power is low, which ultimately makes it cheaper to operate. Furthermore, these data centers subsequently shut down should there be a spike in energy.

Layer1 Opting To Be Silent

Lancium attached a few exhibits within the filed complaint. In one of these exhibits, it’s made clear that Lancium had tried to warn Layer1 of this possible infringement, doing so back in May of this year. Layer1, however, promptly decided to give no response, which is never really a good idea when it comes to matters such as this.

Within the complaint Lancium filed, it argued that it should be paid damages, being paid in proportion to Layer1’s willful infringement of the firm’s patent. Furthermore, Lancium is requesting a permanent injunction to be granted, in order to prevent Layer1 or any of its employees from violating the patent further.

Heavy Players Involved

As it stands now, Layer1 has refrained from commenting about the matter at large. At this point, this is probably the best it could do, as the facts given make a violation of Lancium’s patent clear as day.

As it stands now, it’s unclear what will happen, as Layer1 is backed by a few heavy players. Regardless, this will be an exciting story to follow as time goes on. Something interesting to note is Layer1 stands as the parent company for Coindesk, a popular crypto news outlet. As it stands now, the outlet isn’t showing bias towards its parent company. With luck, this will continue.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.