Coinbase Sues Firm Over 2FA Patent Claims

Coinbase has filed a lawsuit against Dynapass Inc., seeking a declaratory judgment that it did not infringe a patent tied to two-factor authentication and that the firm’s claims are invalid.

Coinbase Seeks Court Ruling Against Dynapass Patent Claims

Coinbase Inc. filed a complaint on Sept. 3, 2025, in the U.S. District Court for the Central District of California against Dynapass Inc. and its affiliate Dynapass IP Holdings. The filing seeks a declaratory judgment of noninfringement and invalidity of U.S. Patent No. 6,993,658, which Coinbase argues is no longer enforceable.

The dispute stems from a July 18 letter in which Dynapass accused Coinbase of infringing the patent through its use of two-factor authentication (2FA) for user accounts. Dynapass alleged that Coinbase had deployed technology covered by the patent since at least 2018 and demanded damages. The company referenced previous enforcement actions it claimed had succeeded against other firms.

Coinbase rejected the claims on Aug. 1, contending that the patent expired in March 2020 and that the U.S. Patent and Trademark Office deemed one of its central claims unpatentable in 2024. The exchange further argued that the patent fails the U.S. Supreme Court’s Alice test, which bars patents that merely cover abstract ideas without sufficient innovation.

Coinbase’s Chief Legal Officer, Paul Grewal, addressed the case publicly in a post on X. “So that there’s no confusion about the [Coinbase] approach to patent extortion, allow me to confirm how we do things: we don’t pay out bogus claims, we sue you instead,” he wrote, sharing the court complaint as evidence of the company’s stance.

The lawsuit highlights Coinbase’s refusal to settle what it views as baseless claims. Grewal framed the matter as part of the company’s broader policy against so-called patent trolls, entities that pursue litigation or licensing fees rather than producing technology themselves.

The filing also reflects ongoing tensions in the tech sector around patents tied to security protocols such as 2FA. Coinbase contends that recognizing expired or overly broad claims could have implications for authentication practices widely used across industries.

As of early September, the case remains in its initial stages, with no further hearings or rulings scheduled.