IP Law Daily, PATENT NEWS: Supreme Court petition filed in case involving Lyft and other rideshare company, (Apr 20, 2026)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The complaint alleges that the Supreme Court’s intervention is necessary to clarify and structure the process by which the Federal Circuit and district courts determine what an abstract idea is.

In a petition for certiorari, Rideshare Displays, Inc. asks the U.S. Supreme Court to review the Federal Circuit’s reversal of the Patent Trial and Appeal Board’s (PTAB’s) decision allowing it to amend claims in two patents challenged by Lyft, Inc. The petition asks the Supreme Court to clarify whether the Federal Circuit disregarded key functional limitations of the claims that implement the improvement to the claimed invention over the prior art in conducting a patent eligibility analysis under 35 U.S.C. §101, and whether the Federal Circuit has authority to raise and decide new factual arguments sua sponte on appeal (Rideshare Displays, Inc. v. Lyft, Inc., No. 25-1132 (U.S. Apr. 17, 2026)).

Rideshare Displays, Inc. (Rideshare) is a technology company that develops vehicle identification systems designed to improve rider safety in app-based ridesharing services. Lyft, Inc. is one of the largest ridesharing platforms in the United States. Rideshare was the owner of U.S. Patent Nos. 9,892,637 (the ’637 patent), 10,169,987 (the ’987 patent), 10,395,525 (the ’525 patent), 10,599,199 (the ’199 patent), and 10,748,417 (the ’417 patent) (collectively, Asserted Patents), that share a common specification. They disclose “vehicle identification systems” in which a rider and a driver can confirm each other’s identities by matching indicators. The system generates a notification signal when a vehicle approaches a pickup location, which in turn triggers a display visible from outside the car. Following allegations by Rideshare that its systems and methods infringed the Asserted Patents. Lyft filed petitions for inter partes review (IPR) challenging the validity of the Asserted Patents. In the IPR proceedings on the ’637 and ’199 patents, Rideshare sought to amend by adding substitute claims, some of which the PTAB allowed. Rideshare appealed the PTAB’s ruling of unpatentability of the original claims of the Asserted Patents, and Lyft cross-appealed the PTAB’s determination of patentability of the substitute claims. The Director of the USPTO intervened in the appeal on behalf of Rideshare to uphold the PTAB’s determination that the substitute claims were patent eligible under 35 U.S.C. § 101, and specifically the Asserted Patents under step 1 of Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (Alice).

Lyft also cross-appealed the PTAB’s determination that the substitute claims were supported by written description for the limitation that a new indicator is generated after a notification signal is generated. The Federal Circuit affirmed the PTAB’s determinations that all challenged claims of the Asserted Patents were unpatentable for obviousness. It also reversed the PTAB’s allowance of Rideshare’s substitute claims, holding them ineligible under § 101 and unsupported under § 112.

According to the petition, at the appellate hearing, instead of reviewing the PTAB’s determination for substantial evidence, the Federal Circuit raised a new factual argument for why there was allegedly no written description to support the limitation at issue that was never made by Lyft before the PTAB, i.e., was not an argument of record. Based on the Federal Circuit’s newly raised sua sponte argument, the Federal Circuit, rather than properly remanding it to the PTAB to consider the new argument, usurped the role of fact finder and held in a footnote that because the court concluded the substitute claims do not recite patent-eligible subject the court also concludes “that the substitute claims are unsupported by the original disclosure” based on its own newly raised argument at the hearing, thereby usurping the role of fact-finder.

Rideshare contended that under Alice step 1, it is not enough to determine that the claims recite an abstract idea, instead the trier of fact must determine what the claims are “directed to.” The inquiry must consider what the claims themselves are focused on and what the specification discloses to be the improvement over the prior art. However, the Federal Circuit did neither because it did not do a step 1 analysis at all. Under its step 2 analysis that the Federal Circuit did conduct, it mischaracterized the claims as merely “streamlining the process of what is normally accomplished by creating hand-printed cards with names to help identify ride pickups at crowded locations.” Thus, the Federal Circuit failed to adhere to its own precedent applicable under either step 1 or step 2, by abstracting away the technological limitations that are the focus of the claims; limitations that are not only recited in the claim language, but expressly tied to the invention’s stated improvement over the prior art. Rideshare claimed that these errors violated the Supreme Court’s two-step framework in Alice, and the Federal Circuit’s controlling precedent in TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1292-94 (Fed. Cir. 2020) (TecSec). Therefore, the Federal Circuit erred by abstracting away the technological limitations that are the focus of the claims and should not be able to disregard technical limitations that are central to the claims. Thus, this case clearly presents an important question about how a patent-ineligible abstract idea is to be determined.

Rideshare also argued that the Federal Circuit construes “abstract idea” inconsistently. Within the Federal Circuit, there are multiple and often incompatible frameworks for determining what claims are a patent-ineligible abstract idea. In this case alone, there two frameworks: (1) before the PTAB, a framework based on Alice that was similar to that determined to be proper in TecSec and other cases, where all limitations of the claim must be considered, particularly those reciting key functional limitations overcoming stated shortcomings in the prior art, was used to determine that the claims were patent-eligible under step 1 as a “technological solution rooted in computer and network technologies;” and (2) on appellate review, the Federal Circuit reversed the PTAB’s determination by using a categorical rule requiring an improvement in computer functionality for patent eligibility as a shortcut to specifically ignore key functional limitations overcoming stated shortcomings in the prior art. Each approach has some following within the Federal Circuit and district courts, but these varying approaches are often at odds, leading to unpredictable results. Thus, the Supreme Court’s intervention is necessary prevent the type of intra-court split currently occurring in the Federal Circuit.

Rideshare also contended that this case presents the Supreme Court with the opportunity to implement clear and predictable standards that the Federal Circuit and federal court system can apply to more consistently reach decisions that are in accord with 35 U.S.C. 101, the Supreme Court’s precedents, the Constitutional goal of promoting the progress of science and useful arts, and the USPTO’s mission of furthering innovation. The Supreme Court should not permit the Federal Circuit to disregard key functional limitations of the claims that implement the improvement to the claimed invention over the prior art in conducting a patent eligibility analysis under 35 U.S.C. 101.

Rideshare also contended that the Federal Circuit’s analysis of the sufficiency of written description for Rideshare’s substitute claims was not in accord with three standards of appellate review, for which the Supreme Court should reaffirm the following limits: (1) the Federal Circuit may not usurp the role of factfinder; (2) issues that have not been raised or passed upon below may not be raised on appellate review absent exceptional circumstances; and (3) the Federal Circuit should not raise factual issues sua sponte. Accordingly, it is imperative for the Supreme Court to step in and reaffirm limits of appellate review to ensure procedural integrity in the Federal Circuit and throughout the Federal Court System.

The Case is No. 25-1132.

Judge: NA.

Attorneys: Devan Viswanathan Padmanabhan (Padmanabhan & Dawson, PLLC) for Rideshare Displays, Inc.

Companies: Rideshare Displays, Inc.; Lyft, Inc.

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