“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.”