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Summary:

A patent troll, which “owns” a method for vehicle tracking, sued cities and has now moved onto popular ride-sharing services. Look for legal costs to be passed on to users.

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Car-sharing services, which let users summon a ride with a smartphone app, are soaring in popularity and recently received a green light to operate in California. Those rides could get more expensive, however, as a result of a shell firm that claims it owns patents for tracking cars.

In a series of lawsuits filed in Los Angeles, Eclipse IP LLC demands money and injunctions to shut down the car services Uber, Lyft, Sidecar and Ridecharge.

The lawsuits claim that the car companies’ apps, which let users summon drivers and see where they are, violate four patents dating from 2003. They include US Patent 7482952, whose claims include descriptions like:

“method for a computer-based notification system, comprising the steps of: scheduling an arrival or departure time for a mobile thing (MT) in relation to a stop location; scheduling a notification communication to a personal communications device (PCD)”

The patents were transferred to Eclipse by Martin Jones, an “inventor” living in Vancouver who is connected to a controversial campaign to sue cities for using message boards that say when a bus or subway will arrive. As Ars Technica explains:

“Today, Jones’ lawyers claim in lawsuits that he’s owed royalties on practically any system of vehicle-tracking in the world. Jones has wrested fees from huge airlines, freight companies, and even small companies that do things like make transit-tracking apps.”

Jones’ lawyers have in the past sought settlements of $50,000 to $80,000, which places the car companies in a bind: even if they believe the patents are obvious or invalid, the cost of fighting them will be far more expensive than paying off the troll. And, since Eclipse IP LLC doesn’t make or do anything — it’s simply a Florida shell company (you can look it up here) — it’s not vulnerable to countersuits.

Widespread patent trolling, like that practiced by Jones, has led the FTC to launch an investigation and troll-fighters like Martha Stewart to strike back. But this will be little consolation to Uber and Lyft users who will ultimately pay for troll-related legal costs in the form of higher ride fees.

Eclipse IP v Uber

  1. So many legal, social and moral issues opened up by evolving technologies…. thanks for the post Jeff. Regards, Andrew.

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  2. Can’t the entrepreneurs get a “partnership” with one of the companies which settled and still produce their app? Hopefully the settlement gave rights for that company to continue using the code!

    On “trolling”: I don’t believe it’s wrong for a company to enforce their patents especially if produced before a company, big or small, is producing their product. I feel it’s more trolling when done after a company is producing and then the troll applies for patents.

    The opposite happens when large corporations steal ideas from entrepreneurs. Every action has an equal and opposite reaction.

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    1. It isn’t about the “code.” Patents don’t cover “code.” Second, a companied that was sued and then paid licensing fees doesn’t have the right to turn around and license the technology to another company. Only the patent holder can do that.

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  3. Srihari Yamanoor Wednesday, October 2, 2013

    I saw the title and though, wow, brave enough to call Apple a patent troll, and later realize there are others too!

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  4. Do some research in to patent trolling. The use of the word is valid. It’s amazing how out of hand it is. This isn’t someone just trying to protect themselves. It is a troll looking for money using shell companies and scare tactics to get people to settle. The patents are written so poorly that they could be anything. Especially when it comes to tech patents.

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  5. People have to stand up to bullies.

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