Liquid Rarity Exchange v. OpenSea: NFT Patent Dispute Settles in 213 Days
Liquid Rarity Exchange, LLC filed a patent infringement action against OpenSea operator Ozone Networks Inc in the Southern District of New York, asserting US10825090B2 against the world’s largest NFT marketplace. The case settled in principle after just 213 days — dismissed without prejudice and with no costs awarded to either side.
NFT Rarity Patent Meets the World’s Largest NFT Marketplace
On October 8, 2024, Liquid Rarity Exchange, LLC filed suit against Ozone Networks Inc, operating as OpenSea, in the U.S. District Court for the Southern District of New York (Case No. 1:24-cv-07651), before Judge Arun Subramanian. The complaint asserted infringement of US10825090B2 — a patent directed at digital asset exchange and rarity-ranking technology — against OpenSea’s platform at opensea.io, one of the dominant venues for NFT trading globally.
The parties advised the Court at ECF No. 56 that all asserted claims had been settled in principle. Judge Subramanian ordered the action dismissed without prejudice on May 9, 2025, with no costs awarded to either party and a 60-day window to reopen if the settlement was not consummated. The without-prejudice dismissal preserves Liquid Rarity Exchange’s theoretical right to refile, though the settlement-in-principle language strongly suggests the matter reached a substantive resolution.
The 213-day duration from filing to dismissal is notably short for a patent infringement action in S.D.N.Y., consistent with either a pre-discovery settlement driven by the plaintiff’s claim strength or, alternatively, a defendant-favorable resolution achieved before significant litigation costs accumulated. The precise financial or licensing terms of the settlement are not part of the public record, leaving the commercial outcome between the parties undisclosed.
Filing to Case Settled in 213 days
213 days — faster than the median S.D.N.Y. patent case, suggesting early settlement leverage
Case settled in principle: what the dismissal order means for both parties
Dismissed without prejudice — not a final adjudication on the merits
A dismissal without prejudice means the court made no ruling on the validity or infringement of US10825090B2. The 60-day reopening window built into the order is standard protective language used when parties have settled in principle but formal documentation is still pending. Once that window closes without a motion to reopen, the dismissal becomes practically final — but the patent itself remains enforceable against other parties.
No merits rulingSettlement preserves the patent and avoids invalidity risk
For Liquid Rarity Exchange, settling before any substantive motion practice — particularly before an invalidity challenge or claim construction ruling — keeps US10825090B2 intact and unweakened. The public record does not disclose whether the settlement included a license, royalty payment, or other consideration. The patent remains available to assert against other NFT platforms and digital asset marketplaces.
Patent survives unchallengedOpenSea exits without a validity ruling, but uncertainty lingers
OpenSea, represented by Covington & Burling, achieved dismissal without any court finding of infringement. Settling early also avoided the cost and reputational risk of a drawn-out patent trial. However, without an invalidity ruling or covenant not to sue, the terms of any license or release will determine whether OpenSea’s platform has ongoing exposure to US10825090B2 or related patents in Liquid Rarity Exchange’s portfolio.
No infringement findingUS10825090B2 remains a live threat across the NFT sector
Because the case settled without a validity or claim construction ruling, US10825090B2 emerges from this litigation with its scope untested and legally intact. Other NFT marketplace operators, secondary market platforms, and digital asset rarity-ranking services should treat this patent as an active enforcement risk. The speed of settlement may embolden further assertions — patent assertion entities often interpret early settlements as signals of claim credibility.
Active enforcement riskFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Liquid Rarity Exchange, LLC | Company | Digital asset IP licensor — holder of US10825090B2 covering NFT rarity exchange technologySearch in Eureka ↗ |
| Defendant | Ozone Networks. Inc d/b/a OpenSea | Company | Ozone Networks Inc, operator of OpenSea — the world’s largest NFT trading marketplaceSearch in Eureka ↗ |
| Plaintiff counsel | James Patrick Tracy | Attorney | Counsel for Liquid Rarity Exchange, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Keith Jude Grady | Attorney | Counsel for Liquid Rarity Exchange, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Tucker Ellis LLP | Law Firm | Representing Liquid Rarity Exchange, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Windels, Marx, Lane And Mittendorf, LLP (NY) | Law Firm | Representing Liquid Rarity Exchange, LLCSearch in Eureka ↗ |
| Defendant counsel | Jared Russell Frisch | Attorney | Counsel for Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Defendant counsel | John Y. Veiszlemlein | Attorney | Counsel for Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Defendant counsel | Philip Alexander Irwin | Attorney | Counsel for Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Defendant counsel | Ranganath Sudarshan | Attorney | Counsel for Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Defendant law firm | Covington & Burling LLP | Law Firm | Representing Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Defendant law firm | Covington & Burling LLP (NYC) | Law Firm | Representing Ozone Networks. Inc d/b/a OpenSeaSearch in Eureka ↗ |
| Presiding judge | Judge Arun Subramanian | Judge | New York Southern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The dismissal order recites that ‘all claims asserted herein have been settled in principle’ — language that reflects a binding agreement in substance, even if formal documentation was still outstanding at the date of the order. The without-prejudice form and 60-day reopening window are protective procedural devices, not signals of a failed negotiation. No cost award and no merits ruling means neither party obtained a litigation advantage that could be cited in future proceedings involving this patent.
US10825090B2 — Digital Asset Rarity Exchange Technology
US10825090B2, filed as application US15/072911, covers technology in the domain of digital asset exchange — specifically directed at systems and methods for ranking, evaluating, and trading digital assets based on rarity attributes. This technical area sits at the intersection of blockchain-based asset provenance, algorithmic rarity scoring, and peer-to-peer marketplace infrastructure, all of which are core functional layers of NFT trading platforms.
In the context of the NFT market, rarity scoring is a primary value driver — platforms that surface, rank, and facilitate the exchange of assets based on trait rarity are commercially central to the ecosystem. A patent covering this mechanism, asserted against OpenSea, signals that Liquid Rarity Exchange views the technology as broadly applicable across NFT secondary market infrastructure. Any competing platform offering rarity-based filtering, ranking, or exchange functionality should treat US10825090B2 as a priority FTO target.
Should you run an FTO analysis against US10825090B2?
If your platform, product, or protocol involves ranking, filtering, or facilitating the exchange of NFTs or other digital assets based on rarity or trait-based scoring, this patent demands attention. The OpenSea litigation confirms that Liquid Rarity Exchange is actively enforcing US10825090B2 against major commercial platforms — and the settlement without an invalidity ruling means the patent’s claims are legally undiminished. Secondary NFT marketplaces, rarity analytics tools, and Web3 gaming asset platforms are all plausible targets.
PatSnap Eureka’s FTO Search Agent can map the claim language of US10825090B2 against your product’s feature set, surface related continuation applications in the same family, and identify prior art that could support a design-around or invalidity position. Running this analysis before receiving a demand letter — as OpenSea presumably did not — gives your legal and product teams the lead time to respond strategically rather than reactively.
Run a freedom-to-operate analysis on US10825090B2 to assess your product’s exposure
Run FTO in Eureka →Similar NFT and digital asset patent cases in S.D.N.Y.
Patent infringement actions involving NFT marketplace and digital asset exchange technology filed in the Southern District of New York, with comparable claim profiles and resolution patterns.
What this case signals for the NFT and digital asset IP landscape
A swift settlement against OpenSea suggests US10825090B2 carries real assertion leverage — and the NFT sector’s patent exposure is growing.
Early settlement signals credible claim — other NFT platforms should take note
When a patent assertion against the dominant player in a market resolves in under seven months — with no costs and no invalidity ruling — it typically signals that the defendant perceived sufficient risk to negotiate. NFT marketplace operators running rarity-ranking or digital asset exchange features should assess their exposure to US10825090B2 before a similar demand arrives.
Without a claim construction ruling, the patent’s scope remains undefined
No Markman hearing was completed, meaning the claims of US10825090B2 have not been publicly construed. This ambiguity cuts both ways: it preserves plaintiff’s ability to argue broad coverage in future cases, while defendants lack a reliable prior ruling to anchor an invalidity or non-infringement defense. Running an FTO analysis now — before a demand letter — is the lower-cost path.
Liquid v Ozone — key questions answered
Liquid Rarity Exchange asserted US10825090B2, filed as application US15/072911, covering digital asset rarity exchange technology. The patent was asserted against OpenSea’s NFT marketplace platform at opensea.io in the Southern District of New York.
The case was dismissed without prejudice on May 9, 2025, after the parties advised the court that all claims had been settled in principle. Dismissal without prejudice means no ruling was made on patent validity or infringement, and the court preserved a 60-day window to reopen the case if the settlement was not finalized. The patent remains legally intact.
No. The dismissal order contains no merits ruling — no finding of infringement, no claim construction, and no invalidity determination. A settlement in principle reflects a negotiated resolution between the parties, not a judicial adjudication. The patent’s validity and scope remain legally untested by this proceeding.
The case ran for 213 days from filing on October 8, 2024 to dismissal on May 9, 2025. This is relatively fast for a patent infringement action in S.D.N.Y., and is consistent with early-stage settlement negotiations — potentially before formal claim construction proceedings or significant discovery. The speed may suggest either strong plaintiff leverage or a defendant preference for rapid commercial resolution.
Liquid Rarity Exchange was represented by Tucker Ellis LLP and Windels, Marx, Lane and Mittendorf, LLP (NY), with attorneys James Patrick Tracy and Keith Jude Grady. OpenSea (Ozone Networks Inc) was represented by Covington & Burling LLP, with attorneys Jared Russell Frisch, John Y. Veiszlemlein, Philip Alexander Irwin, and Ranganath Sudarshan.
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