A little-known patent infringement lawsuit could have big implications for Uber — and potentially dozens of other companies.
Carma Technology, a company formed in 2007 by serial entrepreneur and SOSV Ventures founder Sean O’Sullivan, filed a lawsuit earlier this year against Uber alleging the company infringed on five of its patents that are related to the system of matching riders (or packages) with capacity in vehicles. In other words, ride-sharing — a business Carma operated in some form for a decade until it changed its business model and applied its tech to road-pricing services like GPS tolling and HOV verification.
Carma has requested a jury trial and is seeking a permanent injunction against the company, mandatory future royalties on any Uber products that infringe on those patents as well as damages, and other costs related to the lawsuit.
The lawsuit, which has been quietly winding its way through the U.S. District Court for the Eastern District of Texas, is relatively new. The allegations have been swirling for nearly a decade.
Carma lawyers first contacted Uber about its ride-sharing and ground transportation patents in 2016, according to the complaint. That was an auspicious time for Uber. The startup, which was founded just seven years before, had shot into the stratosphere — in terms of valuation, growth, and gravitas.
Uber was valued at $66 billion at the time, and had a reputation for taking big, legally sticky swings into new markets that helped it grow to hundreds of cities in the U.S., Europe, Canada, and the Middle East. It had raised more than $12.5 billion in venture capital, and was using it to launch new products and even push into autonomous vehicles.
Uber might have had the business model and the market share, but it didn’t have the specific ride-sharing patents, O’Sullivan told TechCrunch in a recent interview. Carma does — plus a couple dozen others. Uber was allegedly aware of that fact as early as 2015 when the U.S. Patent and Trademark Office rejected one of its applications b …