A relatively unknown patent infringement lawsuit has the potential to significantly impact Uber, as well as numerous other companies, due to its far-reaching implications.
Carma Technology, a company founded in 2007 by serial entrepreneur and SOSV founder Sean O’Sullivan, has filed a lawsuit against Uber, alleging that the company has infringed upon five of its patents related to the system of matching riders or packages with available vehicle capacity. This concept is essentially the foundation of ridesharing, a service that Carma operated in various forms for over a decade before shifting its focus to road-pricing services like GPS tolling and HOV verification.
Carma is seeking a jury trial and is requesting a permanent injunction against Uber, as well as mandatory future royalties for any Uber products that infringe on the patents, damages, and other lawsuit-related costs.
The lawsuit, which has been quietly proceeding through the U.S. District Court for the Eastern District of Texas, is relatively new, but the allegations have been ongoing for nearly a decade.
According to the complaint, Carma’s lawyers first contacted Uber regarding its ridesharing and ground transportation patents in 2016. At that time, Uber was experiencing rapid growth, with a valuation of $66 billion and a reputation for taking bold, legally complex steps into new markets, which enabled its expansion to hundreds of cities across the U.S., Europe, Canada, and the Middle East.
Uber had raised over $12.5 billion in venture capital, using it to launch new products and push into autonomous vehicles. However, despite its significant market share and business model, Uber lacked specific ridesharing patents, which Carma possesses, along with around two dozen others.
O’Sullivan argues that the core service described in Carma’s patents is essentially the modern ridesharing experience, and he believes that Uber is infringing on these patents, even if its business model operates more like a taxi service.
The case is complex, according to intellectual property attorney Larry Ashery, who is not involved in the case. Ashery notes that Carma’s strategy of patent procurement has been sophisticated, with the five asserted patents being part of a 30-patent family related to the original filing date.
Each of the five asserted patents contains multiple patent claims that define the legal boundaries of the invention, and Carma is asserting these individual claims against Uber. This means that Uber will have to address and defend against each claim, making the litigation more complex and challenging to defeat.
A nine-year gap
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