A retired Georgia Institute of Technology engineering professor described as a "pioneer" in developing the idea of ride sharing sued Lyft, claiming it infringed his patent for technology underlying the core of its business model.
According to a complaint filed on Monday evening, Lyft has failed to pay Stephen Dickerson for using his system integrating cellphones, global positioning system (GPS) technology and automated billing, despite earning as much as $1 billion (roughly Rs. 6,800 crores) of annual revenue.
"The core of its business model is the transportation system of Prof. Dickerson's invention; without that system, Lyft literally cannot operate," the complaint said.
Through his company RideApp, Dickerson is seeking reasonable royalties and an injunction against San Francisco-based Lyft, which is privately held.
Founded in 2012, Lyft was valued last month at $15.1 billion (roughly Rs. 1.04 lakh crores) after completing a $600 million financing round.
Its network includes more than 600 locations, according to its website.
A Lyft spokeswoman declined to comment on Tuesday.
The complaint called Dickerson a "pioneer in developing the radical idea" of ride-sharing by conceiving his system in 1999, before cellphones from major manufacturers incorporated GPS technology and allowed for widespread automated billing.
Dickerson said he reacquired the patent this year, 17 years after assigning his rights to Georgia Tech, which had made no effort over the years to stop infringements.
Jeffrey Toney, a partner at Kasowitz Benson Torres representing Dickerson, said his client thought Lyft might be infringing the patent when he began efforts to reclaim it.
"His vision is to integrate all forms of subscription transportation into a single cellphone application, so you can get where you're going in the most efficient way," Toney told Reuters by telephone. "That's what's motivating him."
Toney declined to say whether other companies might be targeted, but said Dickerson "plans to enforce his rights and fully develop his invention."
The lawsuit was filed in federal court in Manhattan.
The case is RideApp v Lyft, US District Court, Southern District of New York, No. 18-06625.
© Thomson Reuters 2018
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