Neobike vs Dahon: which company is being economical with the truth?

Neobike vs Dahon: which company is being economical with the truth?

Before publishing the news story about the Taiwanese jail sentences of five Neobike employees, accused by Dahon of a variety of trade misdemeanours, BikeBiz approached Neobike for a comment. None came at the time. However, Neobike has since got in touch via an attorney-drafted letter and claims the story needs “rectification”. Dahon is sticking to its original story and has provided BikeBiz with scans of Taiwanese court documents

In an email to BikeBiz entitled ‘Dahon’s untrue accusation’, Neobike sales manager Hugo Hu said: “What has been publicised is very far from the truth and with the penetrating power of the media, it has caused a destructive impact on Neobike in not just Europe but world-wide.”

And in a letter said to be drafted by an attorney, Peter K. Wang, president of Neobike International Co. Ltd. , wrote:

“On April 10, 2002, we encountered an article on your website BikeBiz.co.uk reported by Dahon California Inc. in the United States. Since the article does not square with the facts, we hereby request your rectification.”

BikeBiz is happy to let both sides in this increasingly complex drama have their say. First of all, here’s the Wang world-view:

“It is not true that any of our employees has infringed on the patent right of Dahon California Inc. Moreover, there is no record that shows Dahon California Inc. has filed any criminal lawsuit for infringement of patent with the legal court in Taiwan.

“Although Dahon of Taiwan has sued against five employees of our company on the charges of betraying business secrets and breach of trust, the High Court of Taiwan had ruled that so-called folding technology for folding bicycles is non-existent. In other words, there is no business secret to be ‘betrayed’. As a result, our five employees were found unguilty with regards to the above accusation of betraying business secrets and breach of trust, based on the sentence on April 2, 2002 by the Hight Court of Taiwan.

“Despite any verification with us, unfortunately, your website was abused by Dahon California Inc. to spread false information to the public and this act has not only defamed Mr. C.C. Hsian personally, but also our company in the folding bicycle business.”

Execs at Dahon were “surprised” by Neobike’s response (“as an American company, we are very, very careful when it comes to legal issues”) and supplied BikeBiz with a translation of the 44 page court judgement

”The facts as reported by you were correct,” said Dahon’s Joshua Hon.

"We sued the founders of Neobike in criminal court. The founders of Neobike were found guilty of criminal offense. The defendants were sentenced to five months in jail. The verdict is final with no chance for appeal.

”[Neobike] say no case was filed by Dahon California. This is correct, the case was filed by Dahon, Inc. a wholly owned subsidiary of Dahon California.

”As for the exact finding of guilt, it is for filing a false patent application, in violation of non-compete contracts, and thereby damaging the credibility of the Taiwan patent office and the rights and benefits of Dahon, Inc. So in a clever legalese sort of way, Neobike's claim that they were not found guilty of theft of intellectual property is correct.

”You can see in the facts as accepted by the court, that we now have a lot of ‘meat’ to work with as we pursue a civil case and ask for damages.

”An interesting corollary to this story is how difficult we, as an American company, have found the legal process in Taiwan, especially with regards to a Taiwan company and intellectual property rights. It has taken us 10 years to get this verdict and to tell you the truth, we had to put a tremendous amount of pressure on the Taiwan judiciary through our connections with the American Chamber of Commerce and other political channels.”


TRANSLATION OF COURT DOCUMENTS
(Page 1 of 44)

Case: Dahon vs. Hsiao, et al


I. Hsiao Jian-chang, Hsu Shu-feng, and Chen Zai-ren were employed, respectively, from 4/3/89, 1/4/90, and 7/7/87 by Dahon, Inc. (translator’s note: a wholly owned subsidiary of Dahon California, Inc.) at No. 6, Lane 609, Section 5, ChungHsin Rd, San Chung City, Taipei Hsien, Taiwan, as Vice President, Sr. Engineer/RD Department Manager, and RD Engineer, respectively. Dahon Inc. was a producer and marketer of bicycle products, especially the well-known “Dahon Folding Bicycles”.

II. These individuals had each independently signed a “Non-Compete Employment Contract” which stipulates that, during, and after two years of the end of, the employment period, they are held responsible to safe-guard any commercial secrets or any knowledge or information related to their employment, and that they shall not conduct for themselves or others, businesses that are in competition with Dahon Inc., whether in the form of an employee, agent, licensor, partner, shareholder, or consultant.

III. In the interest of raising design standards, and to improve their folding bicycle designs, Dahon Inc., in 1990, participated in the fourth Taipei International Design Camp, sponsor by the China External Trade Association. Hsiao Jian-chang was the “Contact Person” (on behalf of Dahon) in the application proposal for that design camp, and Hsu Shi-feng was an engineer involved in the actual work. The three (defendants) left Dahon Inc. in April and May of 1992, and despite clear knowledge the “non-compete” contract, took advantage of their years of experience in the area of folding bicycle design and manufacturing at Dahon, went on to form, in June of that year, Neobike Ltd., which has “Intended Business Areas” in its registration (with the Commerce Dept.) identical to those of Dahon Inc. (in similar registration documents), in partnership with (defendants) Hsu Fu-quan, the main shareholder, and Hsu Su-yuan, who served as CEO and Inspector, respectively, while Hsiao Jian-chang, Hsu Shi-feng and Chen Nai-ren, serve as Director and Shareholders, respectively.

Neobike’s Registered Business Areas include:

1. “Production and sales of bicycle parts;

2. Production, service and sales of regular, racing, and mountain bicycles;

3. The quotation and bidding of the afore-mentioned products;

4. The im/export of the afore-mentioned products.”

They are almost totally identical to Dahon’s.

Hsiao, Hsu, Chen, et al then took advantage of their work experience obtained while at Dahon, and proceeded to work with the research and development of foldable bicycles, and in particular allegedly obtained results related to “Improvement of Structures of Folding Bicycle”, which they proceeded to apply for a patent with the Patent ... Article continues below

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ce. But the five defendants, in order to avoid detection by Dahon of any violation of the “non-compete” agreement, which prohibits engagement in similar business activities within two years of departure, and the fact they are now a part of a competing company, they proceeded to conspire to commit a crime. Knowing full well that Hsu Su-yuan (Ms.) was merely an accountant with Neobike, without any technical education or design experience or ability, and was not in fact the real inventor of the (substance in the) patent (application), they deceitfully and wrongfully used her name, on 3/3/1993, as both the inventor and the applicant on the sworn official application form, and delivered it to the Patent Office, so as to cause the officials to commit mistakes in recording facts on official documents, and to further publish it in legal journal as Patent (application) #82202540. These actions have damaged the credibility of the Patent Office, as well as the rights and benefits of Dahon, Inc.

TRANSLATION PROVIDED BY DAHON

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