Bike-share sector advised to map out global protections

As an emerging business model in recent years, bike sharing is becoming a symbol of China's fast-developing sharing economy, representing its cutting-edge innovation and entrepreneurship, but industry experts have warned of potential intellectual property risks now that domestic operators are seeking to expand globally.

"Bike sharing, as well as many other new industries and business models, is a combination of IPs itself, and it cannot grow well without IP," Wang Bing, director of the IP law research center at Tsinghua University, told China Intellectual Property News.

Ofo, founded in Beijing in 2015, is one of China's earliest bike-sharing operators. It has expanded its business to seven foreign countries, including Singapore, the United Kingdom, the United States, Thailand and Japan.

The company operates more than 8 million bicycles, clocking in more than 25 million rides a day, making it one of the world's largest bike-sharing networks.

It has applied for about 500 trademarks in China and abroad.

Ofo's competitor Mobike has applied for more than 140 patents and registered 180 trademarks in China and overseas. Its service covers more than 100 cities internationally.

Each Mobike vehicle is equipped with a Beidou-GPS-Glonass positioning chip. Big data, cloud computing and internet of things technologies have allowed for riding trends forecasting and smart parking management in the background managing system.

"The sharing economy features integration of capital and IP," Wang said, adding that IP is an attractive element for investors.

Ofo's direct investor is Didi Chuxing, which is funded by Tencent, Foxconn and Ant Financial. Tencent and Foxconn are also direct investors in Mobike. Ant Financial has also invested in another bike-sharing operator Youon.

Mobike CEO Wang Xiaofeng said there will be greater potential if the major players join hands.

Despite increasing their popularity, Chinese bike-sharing companies that have expanded into the overseas markets "generally have few international patent applications", said Cao Xinming, deputy director of the center for IP rights studies at Zhongnan University of Economics and Law. He called for IP deployment prior to market expansion.

"Competition is increasingly intense in both the Chinese and overseas markets, and the overseas markets have higher challenges in IP," he said.

There are already competitors in many overseas markets, including Citi Bike in the US, Velib in France and Docomo Bikeshare in Japan.

According to a report by ResearchInChina, an independent provider of Chinese business intelligence, there will be 61.7 million bike-share users in China this year, double the number last year. The report expects that number to hit 198 million by 2021.

The report said the industry's revenue will reach 8.86 billion yuan ($1.34 billion) this year and estimated it will reach about 29 billion yuan by 2021.

Amid such a huge market and increasing competition, companies should enhance their IP capacities, conduct research and analyze the IP map of their targeted markets, Cao said.