Uber Could Face a Challenge from GM’s Recent Patent Acquisition

What can the remains of Sidecar offer GM, which just partnered with Lyft? One potentially valuable 14-year-old patent.

TWO WEEKS AFTER announcing it’s working with Lyft on a network of self-driving cars, General Motors is snapping up employees and intellectual property from the recently defunct ride sharing company Sidecar.

The move, reported by Bloomberg Business, will bring about 20 former Sidecar employees to GM, including CTO Jahan Khanna. GM has confirmed it’s scooping up employees and IP from Sidecar, but declined to specify details.

GM hasn’t said anything about what kind of work its new employees will be doing or how it will use the newly acquired IP. A spokesman says the move has nothing to do with the Lyft deal, and that the automaker simply jumped on a good opportunity to pick up some expertise in an area it’s starting to explore.

Sidecar was an early competitor of Uber and Lyft, but never matched either in funding or size, and folded at the end of 2015. So what can its remains offer GM, which just paired up with Lyft? One possible answer: a 14-year-old patent.

In 2002, Sunil Paul, the founder and CEO of Sidecar (who is not joining GM), was awarded a patent for “a computer-implemented method for determining an efficient transportation route.” The patent details a system in which a passenger uses a wireless device to request a ride, which is then sent to a server, which finds an appropriate driver. In other words, it covers the core of any modern ride sharing service. It predates any patent filed by Uber or Lyft. But Sidecar never went to court. In May 2015, Paul told SF Gate he wasn’t suing Uber or Lyft for patent infringement, preferring to focus Sidecar’s resources on growth. In a blog post published Wednesday, Paul said “the key component to the [GM deal] is a license to Sidecar patents,” which Sidecar still owns.

Now that GM’s acquiring a license to that seminal patent, the question is, is it picking up a weapon with the power to shut down Uber?

Maybe. Sidecar’s patent predates those filed by Uber and Lyft by several years, and it’s pretty specific. “It’s not just the general idea of sending a ride request and getting a pickup,” says Maulin Shah, managing attorney at Envision IP, a firm that focuses on patent research and litigation. Sidecar “tried to protect the infrastructure that allows that to happen.” It’s been referenced by 148 other patents, some filed by companies including Apple, Google, Microsoft, and yes, Uber. As with academic papers, having your work cited by others is an indication of validity, Shah says.

It’s far from clear that Sidecar’s patent could be used as enforcement against others, however. First off, GM could use the patent to sue a competitor only if it is the exclusive licensee of the patent—GM and Sidecar haven’t released details of their agreement. Secondly, you could argue the patent addresses a business method, not a technical solution. In May 2014, the Supreme Court unanimously ruled you can’t patent an idea. (The case, Alice Corporation vs. CLS Bank, was also a major blow to patent trolls.) “It’s a fine line between a software patent versus a true business methods patent,” Shah says, though he thinks the Sidecar patent falls more to the software side. Plus, Uber’s success is built on more than the basic ability to call a car with your phone. It has spent years working on its sophisticated algorithms to make the ride sharing experience as easy and convenient as possible.

The third potential hiccup, Shah says, is that because it’s never been challenged in court or at the US Patent Office, “we really don’t know how strong the patent is.” No one’s ever had to defend it, and no one’s tried to attack it by looking for evidence that it’s not as seminal as it may seem. Basically, it hasn’t been vetted.

Of course, all this is moot if GM doesn’t want to use the patent to go after Uber. Right now, it’s hard to imagine the automaker attacking a company to control a space in which it’s not even active yet. But it’s never a bad idea to have an extra weapon in the arsenal.

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