Kevin Halpern and his company Celluride Wireless sued Uber and several of its executives and early investors – people and businesses – claiming they stole trade secrets that underpin how Uber schedules, executes and bills for ridesharing.
The May 14 complaint in superior court calls Halpern “the original inventor of the idea, concept, coding, design, appearance, application and prototype” for all ridesharing companies.
Though defendant Uber CEO Travis Kalanick claims to be an inventor of a business that uses cellphones to arrange rides, “he is not,” the complaint states.
“He obtained the concept unlawfully from Halpern and Celluride,” Halpern continues.
Uber denies the allegations of the complaint, which is the Top Download for Courthouse News on Friday.
“These claims are completely baseless,” a company spokesman said. “We will vigorously defend against them.”
Halpern claims he came up with the business and technology ideas that became Uber while observing inefficiencies in New York City taxis, “black car services” and limousines.
Seeing what he calls an “underutilization of fixed vehicle assets,” he had a “vision to create a real-time, cellular phone based marketplace for the supply and demand of transportation services, utilizing GPS technology therein connecting passengers who had an immediate demand for transportation to suppliers, in close proximity, who had available capacity.”
Halpern says his vision included dynamic pricing to respond immediately to supply and demand, and an “auction engine” that would collect 10 percent on each ride.
He says he studied the evolving technology of mobile phones, as well as taxi and black car dispatch centers.
After years of work developing his ridesharing concept, in 2006 he had a prototype that used cell phone GPS to provide drivers and passengers with real-time location information, Halpern says. He began to quietly and cautiously approach potential partners, advisers and investors, and says he met Kalanick in July 2006.
They talked about Kalanick’s experiences with start-ups, Halpern says, adding that “at the time, unlike the persona portrayed today of a dismissive and aggressive mogul, Kalanick was an approachable fellow entrepreneur who had been humbled by failure.”
Halpern claims he shared everything from technological details to marketing plans with Kalanick, and with defendant Garrett Camp, now Uber’s chairman, and that both promised to keep his concept and intellectual property confidential.
With that assurance, Halpern says, he provided Kalanick “a blueprint on how to launch a cell phone based P2P transportation network, including how to beta test it in New York City.”
In 2008, as Halpern prepared for the beta test, he says Kalanick and Camp attended a venture capital conference in Hawaii called The Lobby.
Kalanick, Camp and early investor Bill Trenchard “conspired together at The Lobby conference to unlawfully misappropriate, acquire and convert the intellectual property, copyrights, trade secrets and other property rights of Halpern and Celluride,” according to the complaint.
Since then, Halpern says, Kalanick has misrepresented where he got the idea for Uber, offering different versions of how he came up with the concept, alternately citing experiences in Paris and San Francisco as inspiration.
Halpern claims they stole not just his concept, “they stole the entire blueprint for success and have passed it off as their own. Now reality can no longer be escaped, defendants must now face, and be held accountable for, the truth.”
Halpern claims that in a “web talk” in 2012 Kalanick was quoted as saying: “You gotta have ideas and if you don’t have ideas than maybe you should join somebody else’s idea.”
He adds: “The truth is not only that Kalanick and other defendants ‘joined’ Halpern’s idea, they stole it.”
Halpern claims that he and his attorney Christopher Dolan arrived at a $1 billion figure based a $41.2 billion valuation for Uber and $20 million in gross daily revenue.
The 44-page complaint, with more than 150 pages of exhibits, alleges misappropriation of trade secrets, conversion and breach of contract.
Halpern seeks compensatory damages, restitution and punitive damages, in Superior Court. He also seeks declaratory relief and imposition of a trust to manage Uber.
Named as defendants are Uber Technologies, Travis Kalanick, Garrett Camp, Bill Trenchard, Scott Belsky, Bill Gurley, Benchmark Capital, Benchmark, Founder Collective, First Round Capital, Rasier LLC and Rasier CA LLC.
- Solve This, Class Tells Wells Fargo Bank
- Shareholder Class Action