Peter Thiel-Backed Layer1 Faces Patent Infringement Lawsuit

The company allegedly infringed a patent to receive cheaper electricity for Bitcoin mining.

Layer1 Technologies, a Texas-based Bitcoin mining firm, is facing a patent infringement lawsuit filed by Lancium, a data center power management company, which is shown through publicly available court documents.

Lancium is accusing Layer1 of infringing its patented technology of adjusting data center power usage. Specifically, the plaintiff pointed out the usage of its patent on Layer1’s ‘demand response’ model that allows shutting down of the Bitcoin mining operations and later returning the power to the grid when there is high demand.

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This allows the company to mine using electricity in low demanding hours. As a result, it significantly decreases operational costs by receiving cheap electricity.

“We are the first load only CLR, and we are dedicated to strengthening Texas’ and the nation’s grid,” Lancium CEO, Michael McNamara said in an official statement. “We developed and continue to develop and protect our revolutionary technology. We will also aggressively defend this intellectual property.”

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The Texas-based software company was granted the patent last March. According to the court filing, Lancium alerted the mining firm of the possible patent infringement in May but did not receive any response.

Hence, the company is now seeking damages proportionate to the willful infringement, along with a permanent injunction to prevent any further violations.

Layer1 is backed by billionaire investor and Paypal co-founder Peter Theil. Furthermore, the mining company’s operations are concentrated on the western districts of Texas.

Commercialization of Bitcoin Mining

Meanwhile, the cryptocurrency mining industry is getting very competitive with the focus of major companies on mining Bitcoins. Though China dominates the industry, many major mining farms are being set up in North America as well.

Last week, Finance Magnates reported on Marathon’s $23 million contract with Bitmain to receive 10,500 Antminer S-19 Pro that will make it one of the largest Bitcoin mining companies in the continent.

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