A little-known patent violation suit may be a great implication for Uber-and potentially dozens of other companies.
In 2007, a company Karma Technology, a company formed by serial Entrepreneur and SOSV founder Sean O'Sullyven, filed a case against Uber earlier this year, in which the company violated its five patents, related to the system of matching riders (or packages) with capacity in vehicles. In other words, ridersing-a business Karma operated for a decade or the other until he changed his business model and implemented his technology in road-value services such as GPS tolling and HOV verification.
Karma has requested the jury trial and is demanding a permanent prohibition against the company, the mandatory future royalty on any Uber products that violates the damage, and other costs related to the trial, and other costs related to the trial.
The lawsuit, which is quietly making its way out of the US District Court for the eastern district of Texas, is relatively new. The allegations have been roaming for almost a decade.
According to the complaint, Karma lawyers first approached Uber about their rider and ground transportation patent in 2016. It was an auspicious time for Uber. The startup, which was established just seven years ago, was shot in a stratosphere – in the case of evaluation, development and gravity.
At that time Uber had a value of $ 66 billion, and in the new markets there was a reputation to take large, legally sticky swings, which helped it grow to hundreds of cities in the US, Europe, Canada and Middle East. It raised more than $ 12.5 billion in Venture Capital, and was using it to launch new products and even push it into autonomous vehicles.
Uber may have a business model and market share, but it did not have specific rideshairing patents, O'Sullyventh recently told Techcrunch in an interview. Carma does – plus some dozen others. Uber was allegedly known about the fact in early 2015 when the US Patent and Trademark office rejected one of its applications as it ran against the current patent organized by O'Solivan and Karma according to the trial.
At least four of Uber's patent applications – and in some cases several amendments to those patents – 2016 and 2019 were rejected for this reason. The rideshare giants will eventually leave some of those applications.
Uber still holds hundreds of other patents that covers a wide health of technology and ideas that have been applied to its business.
O'Sullivan argues that the main service to describe the patent of Karma is actually how the modern day rideshairing experience operates. And he says that Uber is violating those patents, even if the company's business model is more operated like a taxi business.
The case is a complex, intellectual property Attorney Larry Ashri told Techcrunch. (Not included in the Ashri case.)
“It is important to understand here that Karma is not only five patents,” ashri said, the practice of which is based in the Greater Philadelphia region. “They have a very sophisticated strategy of patent purchase that they have been working for the last 18 years.”
He said that the five patents are part of a 30-petcent family who are all related and are connected to the original filing date. This matters because each of the five includes several patent claims in the patent, which defines the legal boundaries of the invention. These personal claims – not only as a whole patent – is the emphasis against Karma Uber.
This means that Uber will have to address and defend against each vocal claim, which would make it difficult to more complex and defeat the litigation, he said. Ashri said that Uber's strategy would probably try to invalve these patents, which would be a challenge.
Nine years interval
While Karma could be equipped with these specific patents, it took the company actually nine years to sue Uber. Law firm Banso de Mori, Redwood City, is representing Karma in the case.
“When any business begins, it is all actually about capturing the market and winning in the market,” O'Sullyan said. “Patent means to protect aggressive people from stealing ideas, but it is not the main focus of your business to get patent revenue. It is more as a protective mechanism.”
Karma, he said, “A multimilian-dollar business is very busy in building and gaining profitability.” But there are other reasons for the interval of that nine -year time, O'Sullivan explained. For one, cost.
He said in a recent interview, “It is incredibly expensive to sue a large company on IP and Karma.” “To take a large patent suit to come with $ 10 million-plus, which takes these days, is not a small task.”
O'Sullyan said that the company reached Uber as 2016, “in the hope that they would do the right thing and give a license to our patent.”
He said, “It took us some time to come with the idea that we had to sue Uber to really answer,” he said.
Uber refused to comment on the trial. Uber's lawyers created two procedural movements this week, with a seal proposal to dismiss to the inappropriate site or to move the venue for optionally convenience. This procedural proposal indicates Uber's desire for the case in the northern district of California, where it is based in Texas.
In particular, the lawsuit is aimed at Uber, not Lyft or other companies use rideshairing. O'Sullivan reported that Karma “is going after the first biggest player” and noted that about 60 other companies are violating it on its patent.
Five reports argument
The primary argument in the trial is attached to the five patents given to O'Sullavan and Karma, originally named Avego.
All this began with the frustration of O'Sullyven, with a congestion of traffic, which eventually creates ideas about carpulling and an automated system using a smartphone can help people coordinate rides. This idea will turn into a startup avego and will become the basis of the first patent – number 7,840,427.
The first patent, which was applied by O'Sullyan in 2007 and provided in 2010, was formed a shared transport system that matches the empty space in a vehicle with riders or accessories. The system installed a set of pick-up and drop-off points and then matched users and drivers traveling with a similar passage.
The patent was launched in the same year, before introducing Avego's ridesaaring app at Apple's App Store in 2008. Avego showed its so -called shared transport app at the DEMO conference in 2008, showing how the iPhone 3G driver could use the app to accept or reject a ride request. Once accepted, the rider was informed as the driver came in contact and then motivated to prove his identity and enter a PIN code to authorize electronic payments.
Avego, which would later convert his name to Karma, was focused on the promotion of rideshairing (in Carpooling), not in taxis, according to O'Sullyventh. The company operated the carpooling business by October 2016, when the app was withdrawn from the app store. However, it still had other forms of ridersing, such as its partnership with Toyota, until it was fully phased out in April 2018.
“If you look at the definition of ridersing in the federal law, it is carpooling,” O'Sullyan said, seeing that Karma created a multimilian-dollar ridersing business in his early days.
When Uber and Lift came in and tried to cum the word ridesaring for taxi-hyling, the reason for this caused confusion in the market, inspiring Carma to change his business model and implement his technology in new ways. “Uber and Lift actually took ridersing towards taxi services, but our company did not want Karma,” O'Sullyan said.
Karma still focuses on reducing traffic congestion, but its technology applies to a separate business model.
Today, Karma uses its app to help transit officers manage toll and express lanes – a product line that the company first rolled out in 2013. For example, the app can be used by the driver on the toll road or even on vehicle expenses for HOV lane. The app is designed to receive more riders in cars and reward those that by reducing tolls or by providing access to the driver.
O'Sullyan said that the idea is to provide a way to reduce capital expenditure by 20 times by not using the system of large gentle-based infrastructure systems. And it has paid.
O'Sullyventh says Karma is beneficial, although chasing the trial will cut its lower line. Nevertheless, he said that it is worth the cost.
“I think there is a threat in society, where we cannot rely on our patents to protect the rights of the inventors, and the patent system exists especially to protect the rights of investors, not to copy the rights, not only deep pockets to copy,” he said, he said, pointed to Uber's efforts on his own patent.
“We think it's something that is important to identify that the rights of a relatively small inventor are being trampled. But it's not only for Karma, in fact. In fact.