Youon Bike, a Jiangsu province-based bike sharing company, has called off its planned initial public offering in Shanghai after a lawsuit was filed accusing the company of violating intellectual properties rights.
Gu Tailai, founder of a company named Jiangsu SimLink Co. and a graduate of the University of Arizona, accused Youon of infringing upon his intellectual property relating to "no-pole bike renting systems and methods" in a lawsuit filed at a court in Nanjing, Jiangsu's capital city.
Besides running his own company, Gu is also a member of "The Thousand Talents Program", a talent recruitment program established by China in 2008 to recruit highly skilled overseas university professors and researchers to China.
Gu said in the lawsuit that in 2006 he conceived the idea of a bike renting system that allows users to rent and return bikes anywhere, as well as methods to allow users to send bike renting requests to a platform using software. He developed the system in 2009, but did not say when he filed to obtain intellectual property rights to the system.
In a written rebuttal, Youon said that it did not infringe on Gu's intellectual property and that his accusations are exaggerated. It said non-public bike renting constitutes only a tiny proportion of its business, as it mainly operates public bike renting schemes funded by local governments in China.
Youon started its bike sharing business in the second half of 2016, and has so far deployed around 50,000 bikes. In 2016, its bike sharing business accounted for only 0.12% of its total revenue, while its public bikes business has become available in around 210 cities in China, and has established over 32,000 bike parking stations.
Founded in 2010, Youon sought to raise RMB598 million (US$86 million) by issuing 24 million shares in an IPO two months ago. It was its second attempt at a listing, after an earlier application was rejected in 2015.
The firm's revenue and net profit reached RMB381 million (US$55 million) and RMB116 million (US$16 million) respectively in 2016, according to its IPO filing.
Source: China Money Network
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