Uber's Business Model Under Siege Amid Decade-Old Patent Lawsuit

In a turn of events that may have profound implications on the rideshare industry, Uber finds itself in the throes of a patent infringement lawsuit, a decade in the making. The claimant, Carma Technology, alleges that Uber infringed on five of its patents related to the system of matching riders or packages with vehicles - in essence, ride-sharing.

Carma, a company born in 2007 and led by serial entrepreneur and SOSV founder Sean O’Sullivan, has requested a jury trial and is seeking numerous reparations. These include a permanent injunction against Uber, mandatory future royalties on any products infringing those patents, and other damages and costs related to the lawsuit. But Carma isn’t a fresh face to Uber. According to the complaint, Carma lawyers first contacted Uber about its ride-sharing and ground transportation patents back in 2016.

According to the lawsuit, Uber found itself on the radar of the U.S. Patent and Trademark Office as early as 2015 when one of its applications was rejected due to overlapping patents already held by Carma. Now, the courts will soon decide whether Uber will ride into an embattled future or rein in and reassess its direction, in light of these legal challenges.