Carma Technology v Uber: the ridesharing trial redefining innovation

Carma Technology vs Uber is among the most closely followed patent disputes in the mobility sector. Carma Technology, which grew out of a company founded in 2007, sued Uber in 2025 before the federal court for the Eastern District of Texas. The dispute had been brewing for almost ten years. Its outcome could weigh on the economics of ridesharing and, more broadly, on the ability of small companies to enforce their patents against large technology groups.

An invention from 2007

The story begins in 2007. Sean O’Sullivan, a seasoned entrepreneur and founder of the SOSV fund, was looking for an answer to urban congestion. He devised an automated system matching drivers with spare seats to passengers, or goods, travelling along similar routes.

The project was named Avego before becoming Carma Technology. As early as 2008, the company offered an App Store application allowing drivers to accept ride requests from an iPhone 3G. The invention is protected in particular by US patent No. 7,840,427, applied for in 2007 and granted in 2010, the first of a wider family.

The patent describes a matching system based on pick-up and drop-off points, with user authentication and route optimisation. Its application predates the founding of Uber in 2009, which gives the case its symbolic weight.

The roots of the ridesharing trial

According to press reports, the confrontation goes back to 2015. The United States Patent and Trademark Office (USPTO) is said to have rejected a patent application filed by Uber in the light of Carma’s earlier patents. Further Uber applications reportedly met the same fate between 2016 and 2019, and some were abandoned. Carma infers that Uber had long been aware of its intellectual property rights.

In 2016, Carma’s attorneys approached Uber to discuss a licence. Uber, then valued at some 66 billion dollars, reportedly did not follow up. Carma eventually brought proceedings in 2025. It alleges infringement of five patents and seeks a jury trial, a permanent injunction, ongoing royalties and damages.

A family of thirty patents

The five patents asserted belong to a family of around thirty titles stemming from the original 2007 application. They cover the automated matching of drivers and passengers, route management, user authentication through mobile applications and trip optimisation aimed at reducing congestion.

The sheer number of claims complicates the defence, since non-infringement or invalidity must in principle be shown claim by claim. Granted patents also enjoy a presumption of validity, which the defendant can only overcome by clear and convincing evidence. An American IP attorney with no involvement in the case told the press that Uber would probably seek to invalidate the patents, a task he regarded as difficult. Uber might also argue that its service, closer to on-demand transport than to carpooling between private individuals, falls outside the scope of the claims. That argument will have to be tested against the precise wording of each of them.

The time it takes to sue

Almost ten years passed between Carma’s first approach to Uber and the filing of the suit. Its founder attributes the delay to the cost of litigation on this scale, which he puts at ten million dollars or more, a considerable sum for a young company busy building its business model.

In the meantime, Carma changed course. Its carpooling application was withdrawn from the App Store in 2016 and the company wound down its ridesharing operations in 2018. It now applies its technology to road pricing, helping transport authorities manage tolls and dedicated lanes, and has kept its patent portfolio.

Possible consequences for Uber

A ruling in Carma’s favour could have significant consequences for Uber. Beyond damages, a permanent injunction would force it to redesign its tools or negotiate costly licences. Since eBay v. MercExchange in 2006, however, such an injunction is not automatic under US law. The claimant must satisfy a four-factor equitable test, which is harder to meet for a patentee that no longer practises the invention on the market concerned.

The case also highlights the tension between the speed of execution of large technology groups and the protection of the inventors who came before them. The patent system, designed to encourage innovation, shows its limits when the cost of litigation deters smaller rightholders from enforcing their rights.

Carma Technology vs Uber and the choice of forum

The battle is also being fought on procedural ground. Uber has moved to dismiss for improper venue or, in the alternative, to transfer the case for convenience, which reflects its preference for the Northern District of California, where it is headquartered. Since TC Heartland in 2017, a company may only be sued for patent infringement in the State where it is incorporated or in a district where it has committed acts of infringement and has a regular and established place of business. The Eastern District of Texas is regarded as favourable to patentees, so the place of trial could well influence the outcome.

A case to watch

Beyond the commercial dispute, the case touches on the balance between protecting inventors and the freedom to do business. A win for Carma would show that a small company can defend its inventions against the most powerful players in the market, provided it holds robust patents and the means to enforce them. A loss would be a reminder that being first with an idea is not enough and that the scope of the claims, assessed against the prior art, remains decisive. Either way, the decision will matter to anyone operating a matching platform, and it will recall that behind an innovation there is often an inventor whose rights deserve to be taken seriously.