United States: Ridesharing Dispute Exposes Differences Between Strong And Weak Patents

In the late 1990’s, Stephen Dickerson, then a Professor at Georgia Tech, developed what he claims is the basis for all ridesharing technology-- a synergy of cell phones, GPS, and digital payments.  He started a company called RideApp, and filed for patent protection. His patent subsequently issued, and in the last year, he filed separate patent infringement lawsuits in United States Federal Court against Uber and Lyft.

Many people think they stand on top of the world when they have an early patent like Professor Dickerson’s.  In reality, they stand atop an iceberg with lots of cracks below the water’s surface.  If any crack ruptures, the whole iceberg can quickly sink.  This may well be what is happening to Professor Dickerson’s patent.  

Lyft, who was sued first, wasn’t about to take it on the chin.  It did what many accused infringers do-- it attacked Dickerson’s patent using a proceeding in the United States Patent and Trademark Office called an Inter Partes Review (IPR).  Essentially, Lyft asked the Patent Trial and Appeal Board (PTAB) in the U.S. Patent and Trademark Office to reconsider and cancel the patent.  An IPR is a more cost-effective way to challenge a patent than a court suit.  Accused infringers often file IPRs after they are sued in court, which gives the trial judge the discretion to suspend court proceedings while the PTAB reconsiders the patent in suit.  

Before pursuing its IPR, Lyft did some searching of its own, and located four publications, predating Dickerson’s patent filing, that were not originally considered by the Patent Examiner during the patenting process.  An Examiner typically has about 20 hours to decide whether to grant a patent.  About half that time is dedicated to searching, and the other half is used to document the analysis.  It’s easy to understand how 10 hours of searching might not be enough to determine whether an invention is truly new and nonobvious.  This is one of the reasons the patent system permits post-grant attacks like IPRs.  They are effectively crowd-sourced ways of checking patent quality, in as much as anyone who chooses can find prior publications and challenge the grant of a patent.  And its quite effective too.  Over 60% of patents challenged in a post-grant proceeding end up with invalidated claims.

While Lyft based its post-grant attack on the four earlier publications, the PTAB never reached that substance because it found irregularities in the patent which, according to the PTAB, made the patent too vague to understand.

Specifically, the patent claims recite “wireless means of on-demand allocation” and “wireless means of detecting proximity.”  Under U.S. law, when claims are written in this manner, the technical description of the patent must describe corresponding structure for accomplishing the claimed function.  When the PTAB reviewed the patent, it found insufficient corresponding structure to properly interpret the claims.  And since the PTAB was unable to interpret the claims, it was unable to determine whether the four prior art publications cited by Lyft truly invalidated the claims. 

In an IPR proceeding, the PTAB is only empowered to invalidate patents based on prior printed publications, and not on vagueness grounds.  Therefore, the PTAB lacked the power to revoke the patent.  However, its decision leaves Professor Dickerson driving uphill as his case will now return to the trial court, where the judge—who does have the power to invalidate the patent on vagueness grounds, may well take the cue from the PTAB and declare the patent invalid.

This case underscores important issues often overlooked by companies when they file for patents.  The patent law is filled with many nuanced rules that typically do not surface during the patenting process but arise later when a patent is put under a microscope during litigation.

Simply getting a patent is not enough.  It is important to do everything reasonably possible to ensure that the patent complies with nuances of the law that the Patent Examiner may not consider, but which will certainly be considered during a court challenge.  Patents are only valuable if they will stand up to a challenge in court.  The best way to accomplish this is to include on your patenting team a litigator familiar with the ways patents are attacked in court, and who can build into your patents defenses needed to survive those attacks.

In retrospect, as Dickerson now faces an uphill battle in court, he is probably kicking himself for not having a litigation focus when his patent was originally drafted.

Lyft Inc. v. RideApp, Inc, Case Number IPR2019-00671, at the PTAB.

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