The parallels between Baidu and Alphabet go beyond their positions as the top Web search providers in China and the rest of the world, respectively. Both companies have huge ambitions in the autonomous driving space – in Alphabet’s case through its subsidiary Waymo. And just as Waymo did last February, Baidu has just accused a former high-level executive of stealing a trove of trade secrets to found his own startup.
Baidu’s complaint was lodged with the Beijing IP Court two weeks ago. The company says Wang Jing, former senior vice president and general manager of Baidu’s autonomous driving unit, made off with a trove of propriety data when he left to found startup JingChi in April 2017. On closer examination, however, some of the details of the case show in stark relief the difficulty of enforcing trade secrets claims in China.
The biggest contrast is in the damages sought. Baidu is asking the Beijing court for around $7.6 million plus legal costs, in addition to an order halting JingChi’s use of any misappropriated technology. This is not a small sum for China, where a recent World Trademark Review article pointed out that the norm in trade secrets cases is statutory damages amounting to less than Rmb 1 million ($154,000). But it pales in comparison with the amount that Waymo could be expected to recoup if it convinces a jury that Uber’s Ottomoto and Otto Trucking divisions were built on stolen technology. Given what’s at stake in China’s autonomous driving market, $7.6 million may not provide much of a deterrent to companies seeking to gain a technical edge and attract investment.
JingChi, which has offices in Guangzhou, Beijing and Sunnyvale, California, has managed to raise $52 million since its April debut, including from key industry player Nvidia. Founder and CEO Wang not only led driverless car efforts for Baidu, but previously served as Alibaba’s head of engineering, eBay China’s CTO and Google China’s managing director. In June, Wang lured Tony Han, the chief scientist of Baidu’s autonomous driving unit, to serve as JingChi’s CTO. Whereas Waymo sued Ottomotto and Otto Trucking after they had been quickly snapped up by Uber for $600 million, Baidu may be aiming to take on its startup rival while it is independent and not backed by a well-resourced competitor. Publicity may also play a factor here – Baidu may not be aiming for a damages windfall, but rather to dim the startup’s prospects of finding partners.
Finally, the trade secrets complaint is evidently not accompanied by any patent infringement claims. Waymo did assert several patents against Uber, but it had dropped most of those claims by July. As one of China’s leading companies in the field, Baidu likely has a range of Chinese assets in the area, though a recent analysis published in IAM does not peg it among the global leaders in autonomous vehicle patents.
Baidu’s business IP strategy for auto has largely rested on open source. The company says it wants its ‘Apollo’ platform to be the “Android of the autonomous driving industry”, and it has already inked partnerships with OEMs including Ford and Hyundai. Two days ago, it announced a deal with Blackberry to implement the QNX operating system with Apollo and jointly develop new technology – investors interpreted it as a big win for the Canadian company. Domestically, Baidu has spearheaded cross-industry patent sharing efforts among Chinese companies.
Whether Baidu can fend of smaller and nimbler challenges in its home market remains to be seen. We recently reported on a spate of trade secrets suits in the US and Taiwan targetting Chinese entities. If the country shows its own courts can make progress on defending these hard-to-enforce IP rights, it would certainly attract notice.