China’s most valuable startup follows Uber in buying patents from Hewlett Packard Enterprise 28 Sep 17
Didi Chuxing, a Chinese ride-sharing service that has attracted over $10 billion in funding from some of the country's biggest tech firms, has made its second foray into the transactions market for US patents, assignment records show. The Beijing-based company completed a deal with Hewlett Packard Enterprise (HPE) in early September, just a few months after Uber bought a portfolio from the same source.
Didi Chuxing might not be a familiar name, but a series of mergers have made it the world’s largest ride-sharing business. After consolidating most of the major Chinese ride-hailing apps and finally buying out Uber’s China business in August 2016, Didi has a commanding domestic market share of up to 90%. It is reputedly the only major startup that’s backed by China’s three major internet companies: Alibaba, Baidu and Tencent; and it also counts Apple and Softbank as investors. What's more, Didi is eyeing a share of Uber’s core business – it’s reportedly partnering with Softbank on the next round of investment in the US company.
Hewlett Packard Enterprise assigned five granted US patents to Didi, all of which look to be very much at the core of what ride-hailing apps do:
- US 7,577,581 – Method for targeting promotions to individual associated with a vehicle
- US 7,026,983 – Location data diffusion and location discovery
- US 7,305,212 – Message passing to a known location
- US 6,584,401 – Automatic gathering and analysis of data on commute paths
- US 6,983,146 – Location determination using location data items received by short-range communication
If the deal included non-US patents, it’s not mentioned in the accompanying documents. But I would not be surprised if other assets are included. Right now, Didi’s business is confined to China and its ambitions for other markets have mainly come in the form of strategic investments like its possible Uber stake. But while US litigation might not be a threat to Didi’s bottom line anytime soon, its apparent interest in US assets suggest it appreciates the value they could provide further down the road.
Interestingly, the transaction came just barely two months after HPE assigned a somewhat larger portfolio (24 grants) to Uber. Back in April, this blog reported that Uber – whose IP transactions team is led by Kurt Brasch – had launched a new patent buying effort modelled on Google’s 2015 Patent Purchase Promotion. It’s not clear whether the HPE deal occurred under that scheme.
It appears that Didi has made just one previous US patent purchase. In October 2016, a Taiwanese maker of navigation products called MiTAC transferred 29 assets to the company. MiTAC doesn’t show up very often as a seller, its only deal since then … the assignment of one US asset to Uber this past August.
Didi’s entry into the patent transactions market came shortly after it hired Raymond Chen as director of intellectual property in August 2016. Chen previously served as a senior IP counsel to Chinese-owned electric vehicle startup Faraday Future and prior to that he was a US-based lawyer with Finnegan. Didi is in a great competitive position in its home market and continues to attract high levels of investment. If the company sees fit to be a bigger patent player, it should have the resources to make it happen.
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