2017-08-01 12:57:19

A small Chinese software company has accused bike-sharing giant Ofo of infringing on its intellectual property and is claiming 3 million yuan ($446,000) in damages, according to court documents.

Known in China and a handful of international cities for their bright yellow bicycles, Ofo apparently did not realize that the trademark for xiao huang che, or “little yellow bike,” was already taken when they adopted the phrase as part of their official name in May of this year.

The owner of the trademark is not a bicycle manufacturer, but a virtually unknown Shanghai-based company called Shu Ren Smart Technology Co. Ltd., which registered the trademark in September 2016 for a software-related product of the same name.

Though Beijing’s Haidian District People’s Court began hearing the case on Monday, Ofo’s chief public relations officer, Shi Shaochen, said the company’s legal department had not received any “relevant files” regarding the case.

“We are completely legitimate in our use of the ‘little yellow bike’ trademark — there is no infringement here,” said Shi. When asked about the possibility of the software company registering the trademark for the sole purpose of suing Ofo, Shi replied that it was “not convenient” to comment on the matter.

Regardless of intent, Shu Ren believe they have the law on their side and have the public records to support their cause.

When the bike-sharing company launched in 2014, they were officially known as “Ofo Shared Bikes” — but their millennial clients soon began referring to them affectionately as “little yellow bikes” because of their distinctive color scheme. On May 17, the company decided to officially adopt the name “Ofo Little Yellow Bikes” to forge a stronger bond with their customers, and began incorporating the phrase in their advertisements and on their official mobile app.

“When I hear ‘little yellow bike,’ the first image that pops into my head is an Ofo,” Wen Yixin, a marketing specialist in Guangzhou, told Sixth Tone. Wen added that she herself has never used an Ofo bike.

“According to China’s trademark law, a party will be held responsible if they use a trademark without the holder’s consent and cause confusion among consumers,” Han Xiao, a lawyer at Beijing Kangda Law Firm, told Sixth Tone. “In this case, the law favors the party that’s first to register the trademark rather than the party that’s first to use it.”

Intellectual property lawsuits are not uncommon in China, where opportunistic businesses view trademarks as either a means of taking larger companies to court in hopes of receiving a big payout, or a means of making their own brand more similar to that of a more recognizable competitor.

In March 2014, Japanese clothing chain Uniqlo lost a lawsuit against a Shanghai company that had trademarked the “UL” logo the Japanese company was using at the time. And in December 2016, basketball legend Michael Jordan won an appeal to China’s supreme court for the rights to his name in Chinese, qiaodan, which another company had been using to promote their own athletic shoes.

After just three years and a recent round of financing led by Japanese conglomerate SoftBank Group, Ofo is reportedly worth $3 billion, making it a potentially lucrative target for so-called trademark trolls — and in this case, they may not have a legal leg to stand on.

“Unless Ofo can prove they had already achieved a certain degree of popularity from the ‘little yellow bike’ nickname before July 29, 2015, when the software company applied for the trademark, it will probably be ruled a case of infringement,” said the lawyer, Han.

Editor: David Paulk.

(Header image: A row of Ofo shared bicycles in Beijing, June 15, 2017. Fan Jiashan/VCG)