A Director Review of a patent case between petitioner Crusoe Energy and Upstream Data has vacated two petitions by Crusoe that the U.S. Patent Trial and Appeal Board upheld in a ruling this January, a revision that marks a complete victory for Upstream Data in what was previously a mixed ruling.
In July 2023, oil-and-gas bitcoin mining and datacenter operator Crusoe filed a petition against bitcoin mining infrastructure company Upstream Data for its patent on an oil-field-optimized natural gas powered bitcoin mining container.
The U.S. Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board originally rejected every petition against the patent’s claims except for two: claim 1, which describes the entire container “system,” namely “a source of combustible gas…a generator connected to the source of combustible gas to receive a continuous flow of combustible gas to power the generator; and blockchain mining devices connected to the generator” and claim 24, which describes the process of drawing natural gas from a source, combusting it for electricity, and powering bitcoin miners with it.
The Patent and Trial Appeal Board first ruled that Crusoe could not prove that all the other claims of Upstream’s patent were unpatenable, but that it had proved that claims 1 and 24 were “abstract idea[s]” and thus unpatenable.
A Director Review ruling published on April 11, a process whereby a USPTO director can reevaluate a Patent Trial and Appeal Board decision, reverses the prior decision to say that all of Crusoe’s petitions are insufficient.
“After careful review of the record, we determine that the original Board panel misapprehended the nature of claims 1 and 24 in characterizing them as being directed to an abstract idea. Accordingly, we vacate that portion of the Final Written Decision and, instead, determine that Petitioner has not met its burden of showing, by a preponderance of the evidence, that claims 1 and 24 are patent ineligible under 35 U.S.C. §101,” the ruling states.
The case is a landmark decision for patent law in the emerging, wildcat field of oil-and-gas bitcoin mining. And it’s also a big win for Upstream Data, a relatively small firm which has been a pioneer in the oil-and-gas mining sector, against the heavily capitalized Crusoe Energy, which raised $600 million at a $2.8 billion valuation last December.
With the win, Upstream Data could now enforce its oil-and-gas mining container design for royalties and/or protect it against competitors.
As reported by Blockspace, Crusoe Energy is in talks to sell its oil-and-gas bitcoin mining operations to bitcoin financial services company NYDIG.
Crusoe and Upstream data did not respond to questions for comment by press time.
