In The Spirit Of The Holidays: It's Not Too Late For Uber To Avoid Stupid Patent Of The Month

from the fix-things-now dept

Mon, Dec 29th 2014 12:58pm — Vera Ranieri

"Good Spirit," he pursued, as down upon the ground he fell before it: "Your nature intercedes for me, and pities me. Assure me that I yet may change these shadows you have shown me, by an altered life!" – Charles Dickens, A Christmas Carol

As our devoted readers are aware, each month we highlight a Stupid Patent. This month, in the holiday spirit, we've decided to highlight a Stupid Patent Application. Our motivation for doing so is that we hope that our post, like Dickens' Ghost of Christmas Yet to Come, encourages a prospective patentee to change its stupid-patent-application-filing-ways. You see, we recently learned that Uber has filed for a patent on something so basic, so fundamental to our economic system, that it should be called out now before it becomes too late for both Uber and the public.

Here is some background: imagine you own a transportation company. You have a limited number of seats and you know that customers are willing to pay different amounts based on their sensitivity to cost. But you don't want seats to go empty, since every empty seat is a missed profit opportunity. So you implement a system where the more demand is up or supply is down, the more you charge. Or conversely, the more demand is down and supply is up, the less you charge. And then you file a patent application for your "invention."

Because Uber did just that, Uber is being forewarned of its risk of receiving the Stupid Patent of the Month award. Specifically, Uber has applied for a patent on a form of dynamic pricing, a practice that (even if it didn't exist before the study of economics) has been heavily in use by various industries, including most famously by airlines, for over 20 years.

Here is claim 1 from U.S. Patent Application 13/828,481:

1. A method for adjusting prices for services, the method being performed by one or more processors and comprising:

making a determination of an amount of requesters for a service at a given time;

making a determination of an amount of available service providers for providing the service at the given time;

adjusting a price, relative to a default price, for using the service provided by one or more service providers based, at least in part, on the determined amount of requesters and the determined amount of available service providers; and

transmitting pricing data corresponding to the adjusted price to one or more requesting devices or one or more provider devices so that the adjusted price can be displayed on at least one of the one or more requesting devices or the one or more provider devices and be indicative of an adjustment in price as compared to the default price.

Essentially, Uber claims to have invented the method of (a) checking how many people are requesting a service; (b) checking how many service providers are currently available; (c) adjusting the price based on these two factors; and (d) then showing the price to the person requesting it. Not only was such dynamic pricing almost surely known before 2012, this is a claim directed to an "abstract idea" of dynamic pricing based on supply and demand. The addition of the "transmitting" clause (i.e. "do it on a computer") shouldn't matter to patentability.

In filing its application, Uber acts as a good example of how our patent system has encouraged the filing of applications that should never be filed in the first place. The story here is not about a patent that has been granted, but rather that Uber thinks a patent can be granted. Applications like Uber's clog up the Patent Office, and oftentimes issue, despite clear flaws. Once issued, they can become fodder for trolls. Or in this case, they could be used to chill investment of time and resources in competitors.

We hope Uber's application never becomes eligible for the regular prize, because this is a stupid patent application that the Patent Office should quickly reject. We hope Uber realizes the harm patents such as this one cause to the innovation economy as a whole. It is not too late for Uber to change its ways and reject a system of Stupid Patents. We encourage Uber to join our fight against stupid patents before it suffers from "No rest, no peace. Incessant torture of remorse."

Republished from the Electronic Frontier Foundation

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Filed Under: patents, surge pricing
Companies: uber

26 Comments

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Whoever, 29 Dec 2014 @ 1:08pm

Variation on the "on a computer" theme?
Inventions, suddenly made new again by adding ".. on a [mobile] device".

In the application, how is a computer not "a device"?
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kog999, 29 Dec 2014 @ 1:26pm

"The story here is not about a patent that has been granted, but rather that Uber thinks a patent can be granted"

and here lies the problem at the heart of the issue. They might just be right. Look at all the stupid obvious patents that get approved all the time. Why wouldn't Uber try to patent this. Lyft tries to apply some basic economic principals and whoops patented. Even if the patent gets tossed out in court you still tried up your competition, cost them a bunch of money, and stopped then from using their resources to improve their services to compete. It would be irresponsible to Uber not to file if they have even a 10% chance of the patent going though.
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Sheogorath (profile), 29 Dec 2014 @ 1:32pm

Think of the possibilities...
I really, really hope that Uber's application makes it, then they can use their patent to keep prices of all types of products and services stable. People in the US would use Lyft, and I'll keep using buses (free) and local taxis (no more than £5.00) to get around.
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AricTheRed (profile), 29 Dec 2014 @ 1:34pm

The only way!!!
The only way I can see this one getting granted is if they manage to pull it off without violating Amazon's patent, as I'm sure they have photographed something on seamless white (but maybe they were smart, and used seamless grey, or a green screen) with which they prepared their application...
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Mason Wheeler (profile), 29 Dec 2014 @ 1:50pm

The only possible reason they could have for securing a patent like this is as a bludgeon to use against competitors. How long is it going to take Techdirt to realize that Uber is evil? Will they continue to try to say "yeah, Uber's done a few crappy things but they're still providing a valuable service" even after Uber ventures into patent trollery?

Only time will tell.
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nasch (profile), 29 Dec 2014 @ 2:01pm

Re: Think of the possibilities...
I really, really hope that Uber's application makes it, then they can use their patent to keep prices of all types of products and services stable. People in the US would use Lyft, and I'll keep using buses (free) and local taxis (no more than £5.00) to get around.

Just to be clear, nothing comes without costs. Several possibilities occur to me for transportation:

1. supply and demand pricing (a la Uber)
2. stable high prices
3. stable low prices with sometimes a shortage of supply
4. stable low prices with tax funding making up the difference

You're saying you prefer 2-3 over 1.
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nasch (profile), 29 Dec 2014 @ 2:01pm

Re: Re: Think of the possibilities...
I meant 2-4.
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John Fenderson (profile), 29 Dec 2014 @ 3:08pm

Re: Re: Think of the possibilities...
I don't know about Sheogorath, but I personally certainly prefer options 2-4 over 1. But that's sortof beside the point, since I can easily avoid option 1 by simply not using Uber.

However, whether or not demand-based dynamic pricing is a good idea in this application or not, it certainly isn't something that should be patentable (and Uber can do it whether or not they have a patent).
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mattshow (profile), 29 Dec 2014 @ 3:09pm

Raising prices on services at times when demand is high? Good lord, I hope the airlines don't hear about this idea. That would be just terrible.
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mattshow (profile), 29 Dec 2014 @ 3:10pm

Re:
Somehow I missed the one single sentence in this article that made that joke. Sigh. Cut me some slack, I'm still working off the Xmas hangover.
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Get off my cyber-lawn! (profile), 29 Dec 2014 @ 3:59pm

I'm gonna patent
rolling down the car window, sticking my head outside and then telling you if it's raining or not.
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nasch (profile), 29 Dec 2014 @ 4:02pm

Re: Re: Re: Think of the possibilities...
I don't know about Sheogorath, but I personally certainly prefer options 2-4 over 1.

You would rather sometimes not be able to find a car than sometimes have to pay a lot for a car? And you would rather always pay a lot for a car rather than sometimes pay a lot?
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John Fenderson (profile), 29 Dec 2014 @ 4:06pm

Re: Re: Re: Re: Think of the possibilities...
I would rather be able to predict what a trip will cost me than have it subject to the vagarities (or weather) of the moment. On average, this doesn't mean I'd pay more -- because sometimes the fixed rate will be more than the dynamic one and sometimes it will be less.
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John Fenderson (profile), 29 Dec 2014 @ 4:09pm

Re: Re: Re: Re: Re: Think of the possibilities...
Oops, forgot this bit:

"You would rather sometimes not be able to find a car than sometimes have to pay a lot for a car?"

This is a false choice. If the trip costs more than I'm willing or able to pay, then the result is exactly the same as not being able to find a car. Dynamic pricing means that the service is unreliable -- I might take a trip somewhere only to find that the service is unavailable (due to cost) to make the trip back.
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Patent Office, 29 Dec 2014 @ 4:41pm

Patent Office
PATENT DENIED

Your patent application is hereby denied, due to being too obvious. You may re-file for a secondary examination of your patent, but unless you stick 'on a computer/electronic device' in there somewhere, do not be surprised when your application is once more denied.
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nasch (profile), 29 Dec 2014 @ 5:35pm

Re: Re: Re: Re: Re: Re: Think of the possibilities...
Dynamic pricing means that the service is unreliable -- I might take a trip somewhere only to find that the service is unavailable (due to cost) to make the trip back.

Without dynamic pricing, wouldn't a surge in demand have the same result*? Supply would not necessarily keep up since prices don't change. You make good points though. Personally I'm in favor of tax subsidized mass transit plus market solutions. If competitors want to employ steady pricing or surge pricing or whatever the hell we feel like pricing it today, let customers choose what model they like.
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Anonymous Coward, 30 Dec 2014 @ 3:22am

Re: I'm gonna patent
Already patented by Les Nessman and trademarked as "Eyewitness Weather".
("I look out the window and witness the weather.")
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Reality bites, 30 Dec 2014 @ 7:44am

Need a prize for the dumbest patent bureaucrat too.
Couldn't have a stupid patent without having the dumbest patent office in the universe.
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John Fenderson (profile), 30 Dec 2014 @ 8:06am

Re: Re: Re: Re: Re: Re: Re: Think of the possibilities...
"Without dynamic pricing, wouldn't a surge in demand have the same result*?"

Perhaps, but with traditional taxi companies this has only happened to me once in my life, so availability is not realistically a concern with them.

"If competitors want to employ steady pricing or surge pricing or whatever the hell we feel like pricing it today, let customers choose what model they like."

I agree 100% with this. I'm not saying Uber shouldn't use this model. I'm only saying that this model makes it much less likely that I will personally use Uber.
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Sheogorath (profile), 30 Dec 2014 @ 6:35pm

Re: Re: Think of the possibilities...
Nah, just No. 4 will do. ;)
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Sheogorath (profile), 30 Dec 2014 @ 6:49pm

Re: Re: Re: Re: Think of the possibilities...
Personally, I want to see the prices of package holidays stay the same mid-range price all year round rather than being low much of the time, then shooting up just in time for the only periods when it's legal for children to be out of school. I don't even have kids, but I can understand why more and more of them are being home educated...
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nasch (profile), 30 Dec 2014 @ 10:46pm

Re: Re: Re: Re: Re: Think of the possibilities...
Personally, I want to see the prices of package holidays stay the same mid-range price all year round rather than being low much of the time, then shooting up just in time for the only periods when it's legal for children to be out of school.

Fascinating how supply and demand works, isn't it? :-)
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Sheogorath (profile), 31 Dec 2014 @ 6:37am

Re: Re: Re: Re: Re: Re: Think of the possibilities...
Well, with the version of 'supply and demand' you seem to admire, Thomas Cook et al. are soon going to price themselves out of the market given that in this age of artificial austerity (thank you, ConDems), family holidays abroad are already unaffordable for most people.
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nasch (profile), 31 Dec 2014 @ 7:05am

Re: Re: Re: Re: Re: Re: Re: Think of the possibilities...
Thomas Cook et al. are soon going to price themselves out of the market given that in this age of artificial austerity (thank you, ConDems), family holidays abroad are already unaffordable for most people.

Then either somebody else will take their business, or those vacations just cost too much to sell profitably. In either case, price fixing would be a bad solution.
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ryuugami, 31 Dec 2014 @ 10:00am

Re: Patent Office
Aha! I got it:

I'm gonna patent rolling down the car window, sticking my smartphone outside and then telling you if it's raining or not.
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nasch (profile), 31 Dec 2014 @ 10:21am

Re: Re: Patent Office
You almost have it. Patent rolling down the car window, sticking your smartphone outside and then telling me if it's raining or not on the internet. Now that's gold.
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