Coinbase has drawn a sharp line against what it calls patent extortion. After Dynapass accused the exchange of infringing a two-factor authentication patent, Chief Legal Officer Paul Grewal publicly vowed to litigate rather than settle. Coinbase has now filed suit seeking a court ruling that it does not infringe and that the patent is invalid.
Key Takeaways
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Coinbase’s CLO Paul Grewal says the company will litigate rather than pay “bogus” patent demands.
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On September 3, 2025, Coinbase filed a declaratory judgment action, represented by Jones Day.
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The dispute centers on U.S. Patent No. 6,993,658 related to using personal devices for user authentication; Dynapass ties this to Coinbase’s 2FA.
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Coinbase notes the patent expired in March 2020 and that a key claim was found unpatentable in 2024.
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The company seeks a ruling of non-infringement and invalidity and asks the court to deem the case “exceptional” to recover attorneys’ fees.
The Dispute At A Glance
Dynapass sent Coinbase a demand letter on July 18, 2025, asserting that the exchange’s two-factor authentication (used since at least 2018) violates U.S. Patent No. 6,993,658. Coinbase responded on August 1, rejecting the claims and supplying evidence to dispute infringement.
When Dynapass declined to withdraw its allegations by an August 11 deadline, Coinbase filed a federal complaint on September 3, 2025. The case proceeds in California, where Dynapass is based, with Coinbase represented by Jones Day.
Coinbase’s Legal Argument
Coinbase asks the court for declaratory judgments of non-infringement and invalidity. The company argues the asserted patent is directed to the abstract idea of verifying a user’s identity—an ineligible subject under the Supreme Court’s Alice framework. Coinbase also points out that the patent expired in March 2020 and that the U.S. Patent and Trademark Office previously concluded a key claim was unpatentable in 2024.
In addition, Coinbase seeks to have the matter declared an “exceptional” case under patent law, which could allow the company to recover attorneys’ fees and costs if it prevails.
Why It Matters For Tech And Crypto
Patent assertion entities often pressure companies into quick settlements. Coinbase’s stance—litigate rather than pay—aims to deter what it views as abusive tactics. A win that combines invalidity findings with fee shifting could embolden more firms across tech and crypto to contest dubious claims instead of settling.
Sources
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“We Don’t Pay, We Sue”: Coinbase’s CLO Grewal on Patent Trolls, The Crypto Times.
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