Hailo Tech LLC v. Flywheel Software Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Hailo Technologies, LLC (California)
  • Defendant: Flywheel Software, Inc. (Delaware)
  • Plaintiff’s Counsel: O'Kelly Ernst & Joyce, LLC; Brandt Law Firm
• Case Identification: 1:19-cv-00949, D. Del., 05/22/2019
• Venue Allegations: Venue is asserted based on Defendant's incorporation in Delaware, its regular course of business in the state, and the alleged sale of accused products within the district.
• Core Dispute: Plaintiff alleges that Defendant’s "Via App" software solution infringes a patent related to systems for automatically dispatching vehicles to client locations.
• Technical Context: The technology at issue falls within the domain of automated, location-based vehicle dispatch, a foundational technology for modern ride-hailing and on-demand transportation services.
• Key Procedural History: The asserted patent, U.S. 6,756,913, was the subject of an Ex Parte Reexamination, which concluded with the issuance of a certificate on April 3, 2019. This proceeding resulted in amendments to the patent's claims, including Claim 1, which is the only claim specifically identified in the complaint. The complaint was filed after the reexamination certificate issued but appears to quote the original, pre-reexamination version of Claim 1.

Case Timeline

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 6,756,913 - "SYSTEM FOR AUTOMATICALLY DISPATCHING TAXIS TO CLIENT LOCATIONS"

• Issued: June 29, 2004.

The Invention Explained

• Problem Addressed: The patent describes prior art dispatch systems as limited by their inability to determine the location of customers using mobile phones and their frequent requirement for a human operator, preventing the efficient allocation of the nearest available vehicle (’913 Patent, col. 1:12-2:8). The patent identifies a need for a system that can automate the dispatch process by using location data from both the client's handset and the available vehicles (’913 Patent, col. 2:24-33).
• The Patented Solution: The invention is a "dispatcher free" system where a central server receives service requests and location data from clients using mobile handsets (’913 Patent, Abstract). Concurrently, vehicles in the field (e.g., taxis) report their availability status and location to the same server (’913 Patent, col. 3:32-4:18; Fig. 7). The server maintains databases of client requests and available vehicles and uses a matching algorithm to dispatch an appropriate vehicle to the client, converting the client's GPS data into a street address for the driver (’913 Patent, col. 2:30-41).
• Technical Importance: The technology describes an automated, location-aware matching system between service requesters and service providers, a foundational concept for the modern ride-hailing industry (’913 Patent, col. 2:24-41).

Key Claims at a Glance

• The complaint asserts "at least Claim 1" of the ’913 Patent (Compl. ¶18). It is important to note that Claim 1 was substantively amended during reexamination. The legally operative claim is the amended version from the '913 C1 Reexamination Certificate.
• Independent Claim 1 (as amended):
  • A method for dispatching a commercial vehicle to a client location, comprising:
  • receiving a request at a server for a commercial vehicle from a client device;
  • periodically receiving location information of the client device at said server;
  • determining one or more available vehicles from a plurality of commercial vehicles, based on information from data terminals in the vehicles, where each terminal performs a process of:
    • periodically sensing if a meter on a vehicle is active to determine availability;
    • upon sensing availability, periodically determining the vehicle's position using a position coordinates determination device and sending that position to the server;
  • the server determining the travel time of available vehicles to the client's location;
  • the server selecting and dispatching a vehicle with the least travel time;
  • the server periodically sending the client's location to the selected vehicle; and
  • the server periodically sending the selected vehicle's position to the client device.
• The complaint does not explicitly reserve the right to assert other claims, but the prayer for relief seeks a judgment that Defendant has infringed "one or more claims" (Compl. p. 4, Prayer A).

III. The Accused Instrumentality

Product Identification

• The accused instrumentality is Defendant's "Via App" and associated "software solutions" (Compl. ¶13).

Functionality and Market Context

• The complaint describes the accused product as a software solution that Defendant develops, uses, sells, and distributes (Compl. ¶13). While the complaint does not detail the specific functionality of the Via App, its nature as a ride-hailing application is implied by the context of the infringement allegations. The complaint alleges the product is "preprogrammed to practice the method of Claim 1" (Compl. ¶17). The complaint does not provide sufficient detail for a more granular analysis of the accused product's operation or market position.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references a claim chart in "Exhibit B" that was not included with the filed document (Compl. ¶14). The infringement theory must therefore be summarized from the complaint's narrative allegations.

Narrative Infringement Theory

The complaint asserts that Defendant's Via App infringes Claim 1 of the ’913 Patent (Compl. ¶18). The core of the infringement theory, as summarized in the complaint, is that the accused product embodies a method for sending notifications to a server by "periodically sensing if a meter on a taxi is active to determine if the taxi is available," and upon sensing availability, "periodically: determining the vehicle's current position coordinates...; sending said current position coordinates information to said server" (Compl. ¶12). Plaintiff alleges that Defendant’s software is "preprogrammed" to practice this method, thereby causing infringement (Compl. ¶17). The allegations cover both literal infringement and infringement under the doctrine of equivalents (Compl. ¶¶15-16).

Identified Points of Contention

• Pleading the Wrong Claim: The complaint quotes the original, pre-reexamination version of Claim 1 (Compl. ¶12). However, the legally enforceable claim is the amended version from the '913 C1 certificate, which includes additional limitations, such as the server dispatching the vehicle with the "least travel time." The plaintiff's case must stand or fall on the amended claim, raising the question of whether the current pleading is deficient.
• Scope Questions: A central dispute may arise over the claim term "sensing if a meter on a ... vehicle is active" (’913 C1, col. 2:1-2). The question will be whether a modern ride-hailing app's software-based driver status (e.g., toggling between "online" and "offline") can be construed as the claimed "meter."
• Technical Questions: Amended Claim 1 requires the server to select and dispatch a vehicle based on the "least travel time" (’913 C1, col. 2:14-15). The complaint provides no facts regarding the specific dispatching algorithm used by the Via App. A key technical question will be what evidence demonstrates that the accused system uses "least travel time" as the determinative dispatch criterion, as opposed to other metrics like physical proximity, driver incentives, or a combination of factors.

V. Key Claim Terms for Construction

• Term: "sensing if a meter on a ... vehicle is active" (’913 C1, col. 2:1-2)

  • Context and Importance: This term appears to be a critical battleground. Its construction may determine whether the patent, which uses terminology associated with traditional taxis, can read on modern ride-hailing systems that do not use physical meters. Practitioners may focus on this term because the plaintiff's ability to prove infringement likely depends on establishing that a software-based "availability" status in an app is equivalent to an active physical "meter."
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent specification describes the function of this element as determining "if the taxi is occupied or not" (’913 Patent, col. 4:26-27) or "available for customer service" (’913 Patent, col. 6:2-3). Plaintiff may argue that any component performing this binary availability-check function, regardless of its form, falls within the scope of the term.
    • Evidence for a Narrower Interpretation: The specification explicitly links the availability check to "an output of the meter that indicates if the meter is activated or not" (’913 Patent, col. 4:34-36). Defendant may argue that the specific choice of the word "meter," which was retained through reexamination, was intended to limit the claim's scope to vehicles equipped with traditional taximeters.

• Term: "vehicle with the least travel time" (’913 C1, col. 2:15)

  • Context and Importance: This limitation was added during reexamination, narrowing the claim. The infringement analysis will depend on whether the accused Via App's dispatch algorithm specifically implements this logic.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: A party might argue this language covers any algorithm where travel time is the predominant factor in selection, even if minor other variables are considered.
    • Evidence for a Narrower Interpretation: The patent specification presents several distinct matching methods, including finding the "nearest" taxi or the "first taxi in the pool" as alternatives to a travel-time-based calculation (’913 Patent, col. 5:14-21). A party could argue that because the amended claim selected the "least travel time" method out of several disclosed options, the claim requires this specific logic to be the dispositive basis for dispatch, not merely one factor among many.

VI. Other Allegations

Indirect Infringement

• The complaint alleges active inducement, stating that Defendant "distributes the Accused Product, which is preprogrammed to practice the method of Claim 1" (Compl. ¶¶15, 17). The basis for inducement appears to be the allegation that Defendant provides the software to users and drivers with the knowledge and intent that they will use it in an infringing manner.

Willful Infringement

• The complaint does not allege facts to support a claim for willful infringement, such as pre-suit knowledge of the patent.

VII. Analyst’s Conclusion: Key Questions for the Case

This case appears to present several fundamental questions for the court, revolving around both procedural and substantive issues:

• A threshold procedural issue will be the validity of the pleading itself: how will the court address the complaint’s reliance on an outdated, pre-reexamination version of Claim 1, and can the infringement theory be sustained against the narrower, amended claim that is legally controlling?
• A core issue will be one of definitional scope: can the term "sensing if a meter on a ... vehicle is active," rooted in the technology of traditional taxicabs, be construed to cover the software-based driver availability status in the accused ride-hailing application?
• A key evidentiary question will be one of algorithmic equivalence: can the plaintiff produce evidence that the accused Via App's dispatch algorithm performs the specific function of "selecting and dispatching a vehicle with the least travel time," as required by the amended claim, or does it operate on a different, potentially non-infringing logic?