Uber Faces Patent Infringement Lawsuit from Carma Amid Rising Legal Challenges

Tyler, Texas — A little-known patent infringement lawsuit could have significant implications for Uber and potentially other tech companies. Carma, founded in 2007 by entrepreneur Sean O’Sullivan, filed the lawsuit against Uber earlier this year, claiming the company infringed on five of its patents related to matching riders or packages with vehicle capacity.

Carma is seeking a jury trial, a permanent injunction against Uber, mandatory royalties on any products that infringe on its patents, and damages from the ridesharing giant. The lawsuit has been progressing quietly in the U.S. District Court for the Eastern District of Texas since its filing.

O’Sullivan stated that Carma contacted Uber in 2016 about the ridesharing patents and claims the company was aware of potential infringements as early as 2015. Uber’s patent applications faced rejections due to overlapping patents held by Carma, leading Uber to abandon multiple applications.

“The core service of what Carma’s patents describe is how modern ridesharing operates,” O’Sullivan told TechCrunch. He argued that despite Uber’s business model resembling a taxi service, its operations infringe on Carma’s patents.

Intellectual property attorney Larry Ashery explained that Carma’s case involves a sophisticated strategy of patent procurement developed over 18 years. “They have a family of patents all related and connected to the original filing,” he noted, complicating Uber’s defense.

O’Sullivan expressed that pursuing a lawsuit against a large corporation was costly, stating, “It’s incredibly expensive to sue a large company over IP, and Carma is a relatively small organization.” Despite these challenges, he believes in the importance of protecting inventors’ rights.

Uber declined to comment on the ongoing lawsuit but filed procedural motions to transfer the case to the Northern District of California, citing convenience. Carma is focusing on Uber first, as O’Sullivan mentioned about 60 other companies might also be infringing on their patents.

O’Sullivan’s frustration with traffic congestion inspired the foundational patent, which led to Carma’s development of a shared transport system that matched vehicle space with users. Carma, which once operated a ridesharing app, is now focused on technology applied to road pricing and transit management.

“We believe it’s important to protect the rights of inventors,” O’Sullivan said, emphasizing the lawsuit underscores broader issues within the patent system.