by Dennis Crouch
In Rideshare Displays, Inc. v. Lyft, Inc., No. 2023-2033 (Fed. Cir. Sept. 29, 2025) (nonprecedential), the Federal Circuit affirmed the PTAB determination that claims directed to vehicle identification systems for ridesharing services were unpatentable for obviousness, but reversed the Board’s grant of Rideshare’s motion to amend substitute claims. Judge Hughes, writing for the panel, held that the substitute claims were directed to patent-ineligible subject matter under 35 U.S.C. § 101 because they merely used technology as a tool to improve user experience rather than improving computer functionality itself.
The patents at issue all share a common specification directed to systems and methods for vehicle identification that allow ridesharing app users to verify they are getting in the correct cars and drivers to confirm they are picking up the correct riders. U.S. Patent Nos. 9,892,637; 10,169,987; 10,395,525; 10,559,199; and 10,748,417. The systems work by having a driver’s device receive a notification signal that triggers an indicator visible from outside the car, such as a code or icon on a display. Lyft filed five petitions for inter partes review in November 2021, and the Board found all challenged claims unpatentable as obvious or anticipated over the prior art. Rideshare moved to amend claims in two of the proceedings, and the Board allowed several substitute claims, prompting Lyft’s cross-appeal challenging the amendments on patent eligibility, written description, and obviousness grounds.
In its decision, the court compared the claimed system to “hand-printed cards with names to help identify ride pickups at crowded locations, such as an airport,” finding that invoking computers and mobile devices to streamline human interactions does not transform an abstract idea into patent-eligible subject matter.
USPTO's Limited Authority Over Substantive Patent Law The USPTO lacks interpretive authority to construe substantive patent statutes including 35 U.S.C. §§ 101, 102, 103, and 112. The agency's internal guidance documents directing how patent examiners and even PTAB judges must apply these provisions receive no deference from reviewing courts. The Federal Circuit independently interprets these statutory provisions de novo, applying its own precedent rather than deferring to administrative interpretations. Here, for example, the court explicitly declined to follow the USPTO's 2019 eligibility guidance framework which I have previously noted tends toward being more pro-eligibility than court precedent.
The Obviousness Determination
On the primary appeal, Rideshare challenged the Board’s obviousness determination of the original claims. The key focus was on construction of the phrase “generate a signal representing an indicator.” The Board construed “generate” according to its plain and ordinary meaning as “to originate or produce the signal.” Rideshare argued that “generate” must modify both the signal and the indicator because the signal contains indicator information, such that a new indicator is created whenever the signal is generated. That narrower interpretation would have potentially avoided the prior art. On appeal, the court sided with the PTAB, finding that the plain meaning and proper grammatical construction indicates that a signal is generated and that signal represents an indicator—not that the indicator itself is also generated each time.
Alice Step Two Reversal: User Experience Is Not Technological Improvement
The more significant aspect of this decision involves Lyft’s cross-appeal challenging the Board’s grant of Rideshare’s motion to amend. Rideshare’s substitute claims included a limitation of “identifying the vehicle based on appearance of a match, by visual observation of the user, between the indicator being displayed on the mobile communication device associated with the user and the indicator being displayed on the display associated with the vehicle.” The Board had concluded under step one of the Alice framework that the substitute claims were directed to an abstract idea—specifically, a method of organizing human activity. However, under step two, the Board concluded that the claims provided a technological solution to a technological problem in computer and network technologies, which rendered them patent eligible. This approach by the Board seems to fall in line with new USPTO Director John Squires’ recent opinion in See, Dennis Crouch, Director Squires Takes Aim § 101 Rejections, Patently-O (Sept. 28, 2025) (discussing Ex parte Desjardins).
The Federal Circuit disagreed with the Board’s step two analysis, writing that “improving a user’s experience while using a computer application is not, without more, sufficient to render the claims directed to an improvement in computer functionality.” The court found that the claims are directed to improving a user’s experience in using a ridesharing app and identifying a driver, but that nothing in the claims themselves is directed to an improvement to the mobile device environment itself. The court explained that while the technological implementation more easily enables and facilitates human interactions, “it does not fundamentally alter or improve the way the technology itself functions.” Drawing an analogy to pre-digital solutions, the court stated that the claims “use technology as a tool to streamline the process of what is normally accomplished by creating hand-printed cards with names to help identify ride pickups at crowded locations, such as an airport.”
One case the court relied upon was Simio, LLC v. FlexSim Software Products, Inc., 983 F.3d 1353 (Fed. Cir. 2020). Simio involved a patent directed to a method for creating object-oriented simulations using graphical processes instead of programming code. The specification repeatedly emphasized that the invention made simulation building “dramatically easier” by allowing users to create simulation objects with “simple graphical process flows that require no programming.” The patent owner argued that this graphical approach improved computer functionality by making simulation systems more accessible and enabling faster processing speeds. However, the Federal Circuit concluded that these improvements did not explain how the computer’s functionality was improved beyond the inherent improvement of the user’s experience — writing that “claiming the improved speed or efficiency inherent with applying the abstract idea on a computer” is insufficient to render claims patent eligible as an improvement to computer functionality.
Similarly, in Customedia Technologies, LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020), the Federal Circuit found a targeted-ad system ineligible. The patent owner argued that by providing a reserved and dedicated section of storage, the claimed invention improved the data delivery system’s ability to store advertising data, transfer data at improved speeds and efficiencies, and prevent system inoperability due to insufficient storage. The Federal Circuit rejected this argument, holding that even accepting these assertions, the claimed invention “merely improves the abstract concept of delivering targeted advertising using a computer only as a tool” rather than improving the functionality of the computer itself. Customedia explained merely using a platform more effectively to accomplish an abstract business or organizational goal does not render an invention patent eligible.
Rejection of USPTO’s 2019 Eligibility Guidance
In footnote 2 of the opinion, the Federal Circuit explicitly declined to adopt the USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance and the October 2019 Update, which uses a three-pronged framework. The court stated that the Guidance “is not binding on this Court” and instead evaluated the Board’s decision “under our precedent.” This is is a repeat pushback against the PTO’s administrative guidance and highlights the continuing tension between the USPTO’s attempts to provide more predictable and patent-friendly eligibility standards and the Federal Circuit’s adherence to its own precedent interpreting Supreme Court doctrine.
This rejection takes on added significance given that Director Squires has made cabining-in patent eligibility doctrine a central policy initiative. While the Director has substantial power to grant patents at the examination stage and control outcomes in inter partes review proceedings, this case is a reminder that the Federal Circuit is not likely to easily cede its interpretive authority over Section 101. The court’s decision to explicitly reject the USPTO’s framework in favor of its own precedent suggests that administrative attempts to ease eligibility standards examination guidance will face significant headwinds on cases that reach the Courts. For patent prosecutors, this means that relying on favorable PTO guidance during prosecution may provide limited cover against later invalidity challenges in litigation or post-grant proceedings.
Written Description Requirement The written description requirement of 35 U.S.C. § 112(a) demands that the patent specification describe the claimed invention in sufficient detail to show that the inventor possessed the invention at the time of filing. While written description cannot serve as a ground for institution of inter partes review under 35 U.S.C. § 311(b), it becomes relevant when a patent owner moves to amend claims during IPR proceedings. Written Description also plays a role in determining priority dates during IPR proceedings and thus can allow intervening prior art to invalidate a patent.
The Written Description
The Federal Circuit provided an alternative, independent basis for reversing the Board’s grant of the motion to amend in footnote 3. The court concluded that the substitute claims lacked written description support in the original disclosure under 35 U.S.C. § 112(a). Specifically, the court found no support for the scenario described in the substitute claims, where a new indicator is generated in response to a notification signal when the vehicle is within a predetermined distance of a particular location. The court explained that the original disclosure merely identifies two alternative scenarios: one where the system generates another indicatory signal when the driver approaches a location, and a second scenario where the driver manually generates another indicator.
The case was argued by Michelle Dawson of Padmanabhan & Dawson PLLC (Minneapolis, MN) for Rideshare Displays. Kakoli Caprihan (USPTO) argued for intervenor Director Squires. Eliot Williams of Baker Botts LLP (Washington, DC) argued for cross-appellant Lyft, Inc.
The opinion was authored by Judge Hughes and joined by Judges Taranto and Chen. Costs were awarded to cross-appellant Lyft.
While this marks the first Federal Circuit opinion with Director Squires listed on the caption, his appearance is purely formal as intervenor for the limited purpose of addressing patent eligibility under 35 U.S.C. § 101. The case was fully briefed and argued well before Squires took office, so the first Federal Circuit decisions meaningfully reflecting the new Director’s policies remain weeks or months away. Those future cases may reveal whether the USPTO’s attempts to liberalize patent eligibility standards through administrative actions will gain traction at the appellate level.
Note – the case has what I believe is a typo- 10,599,199 instead of 10,559,199.