The blockchain payments company said it unknowingly owns patents that expired before these were transferred to them.
Blockchain payments company Rocketfuel Blockchain is suing its co-founder for allegedly misrepresenting patent applications and defrauding the firm.
In a complaint filed with the Central District Court of California, Rocketfuel claimed its co-founder and former treasurer Joseph Page hid the fact that patents he transferred to the company had expired. The company is seeking damages of at least $5.1 million.
According to Rocketfuel, Page transferred patent applications to the company in March 2018, thereby relinquishing his rights to the patents. These patents were for several payment processes for Rocketfuel’s blockchain platform, including cryptocurrency user interface systems.
B4MC Gold Mines acquired Rocketfuel in June 2018. When B4MC took over the company, and started doing business as Rocketfuel, Page said the patents were being examined by the United States Patent and Trademark Office (PTO). Page and other shareholders sold their shares in Rocketfuel, and he received five million shares of the newly acquired firm worth approximately $45 million.
A year later, Page resigned from the board. He demanded shareholders of Rocketfuel raise 4 million euros in capital to develop the technology described in the patents or pay him 100,000 euros and transfer the intellectual property back to him.
But Rocketfuel alleged the patent applications had expired, and the company could no longer revive them. Three of the five patents Rocketfuel now owned were considered abandoned between 2014 and 2017.
The company said Page admitted the patents expired in June 2019 but said this was due to Rocketfuel’s inability to raise capital to use the technology. However, the company said Page let the patents expire because he failed to pay additional filing fees and did not respond to other PTO requests.
Rocketfuel said if it had known it couldn’t use the patents, it never would have gone through with the acquisition. They claim Page assigned the patents to Rocketfuel, and sought shares of stock in exchange, despite knowing these patents no longer had value for the firm.
No court date has been set for the case. Cointelegraph could not find contact information for Page.