After six years, the lawsuit between SVTU and Baidu has finally come to a conclusion.
On the afternoon of January 9th, Siweituxin announced that the second instance rejected Baidu's appeal and demanded that Baidu compensate Siweituxin with 64.5 million yuan within 10 days after the judgment came into effect.
In the four years since Baidu did not obtain the A-level surveying and mapping qualification, the cooperation between the two sides was close. The turning point of the event occurred in 2013. After obtaining the A-level surveying and mapping qualification, Baidu continued to make efforts in the high-precision map sector, surpassing the market share of the new four-dimensional map, and the new four-dimensional map is also seeking its own breakthrough.
Four Dimensional New won the second trial, Baidu said it will apply for retrial
The lawsuit between Weituxin and Baidu can be traced back to 6 years ago.
In November 2017, Four Dimensional New sued three companies under Baidu, namely Beijing Baidu NetEase Technology Co., Ltd. (hereinafter referred to as "Baidu NetEase"), Baidu Online Network Technology (Beijing) Co., Ltd. (hereinafter referred to as "Baidu Online"), and Baidu Cloud Computing Technology (Beijing) Co., Ltd. (hereinafter referred to as "Baidu Cloud"), for copyright infringement and unfair competition disputes.
Siwei Tuxin stated that since 2009, the company has been conducting business cooperation with Baidu in the field of electronic map data. After the cooperation expired at the end of 2016, the two parties did not renew the contract. However, after the termination of the cooperation agreement, Baidu's products still use the electronic maps newly provided by the previous four-dimensional map. In addition, Baidu also provides relevant electronic maps on car related applications outside the scope of the contract.
Therefore, Siwei Tuxin believes that Baidu's unauthorized infringement of its rights of authorship, modification, and reproduction has seriously violated the principle of commercial integrity, disrupted market competition order, constituted unfair competition behavior, and damaged the legitimate rights and interests of the company.
In November 2020, three years later, the court made a judgment on the case, demanding that Baidu cease its infringement behavior, offer an apology, and within 10 days after the judgment came into effect, compensate 64.5 million yuan for the economic losses caused by the Four Dimensional Map.
After the first instance judgment, Baidu did not accept the judgment, but appealed. But as mentioned earlier, the second instance judgment shows that the court rejected Baidu's appeal and still upheld the first instance judgment.
In response to the verdict of the second instance, Baidu responded to the Science and Technology Innovation Board Daily that Baidu Maps used self collected data, not the other party's data, after the termination of its new contract with SVT in 2016. Baidu will apply for a retrial to the Supreme People's Court in response to the verdict. At the same time, lawsuits have been filed against the infringement of Baidu Maps copyright and unfair competition by Four Dimensional Map.
Regarding Baidu's response to this ruling and other matters, Blue Whale Finance has also called Siweituxin, but as of the time of publication, the company has not responded.
As both parties involved in the legal battle, the relationship between Siweituxin and Baidu has a long history.
Founded in 2002, the company obtained a Class A surveying and mapping qualification and was also the first domestic enterprise to obtain the qualification for navigation electronic map production. At that time, the company was mainly engaged in the research and production of navigation electronic map products.
However, unlike navigation software such as Baidu Maps and Gaode Maps, which mainly target the C-end, the new map business of Four Dimensional Map is mainly aimed at B-end customers. According to the new prospectus of the four-dimensional chart, from 2007 to 2009, the company's main customers were car companies such as Toyota, Honda, Volkswagen, and consumer electronics companies such as Nokia.
In 2009, Weituxin and Baidu began cooperation. According to the new announcement of the four-dimensional map, according to the cooperation agreement signed by both parties, Baidu NetEase and Baidu Online can use the company's electronic map works within the agreed scope and pay corresponding license fees.
But against the backdrop of the gradual expansion of the navigation market, Baidu is also gradually increasing its investment in related fields. In 2013, Baidu acquired Changdi Wanfang, an electronic navigation map production company, and obtained a first-class surveying and mapping qualification through this acquisition. And this has also created a competitive relationship between Four Dimensional Map and Baidu.
With the arrival of the wave of autonomous driving, the high-precision map market has become a battleground for relevant map product providers. In this field, Baidu and SVTU are also in a competitive relationship. With Baidu's continuous investment, its market share has gradually surpassed that of 4D Tuxin.
The short report on China's high-precision map industry released by Toubao Research Institute shows that in 2020, the top five manufacturers in the high-precision map market were Baidu, Siwei Tuxin, Yitu Tong, Gaode, and HERE, with Baidu's share of 28.1% and Siwei Tuxin's market share of about 21.6%.
Or, due to the combined impact of the above events, after the expiration of the contract between Siweituxin and Baidu in 2016, both parties did not choose to renew the contract. Less than a year after the end of the cooperation, Siweituxin sued Baidu in court.
Being countered by Baidu and seeking a new four-dimensional transformation
With the intensification of competition in the electronic map business, Four Dimensional Map is also seeking transformation, and the direction of transformation is to transform from an electronic map product provider to a service provider that covers the upstream and downstream of the industry chain and combines software and hardware.
In 2016, Four Dimensional Map began to develop autonomous driving services and began developing core algorithms related to autonomous driving. In 2017, the company acquired Jiefa Technology, an automotive electronics division under MediaTek, for a consideration of 3.875 billion yuan, and entered the automotive chip industry through this acquisition.
However, neither the chip business nor the autonomous driving business has truly achieved a breakthrough in the business of Four Dimensional New.
In 2017, the revenue of the new chip business of SVT was 517 million yuan, but in the following years, the revenue of this business fluctuated continuously. In 2022, the revenue of this business was 502 million yuan, which is still lower than the level when it was just acquired in 2017. When acquiring Jiefa Technology, a total of 3.043 billion yuan in goodwill book value was generated. As a result, in 2018, the company made a one-time provision of RMB 886 million for impairment of goodwill.
In addition, the heavily invested autonomous driving business of enterprises has also failed to bring the expected benefits to them. Since the beginning of its development in autonomous driving, Four Dimensional New has invested a large amount of funds in the autonomous driving business. In 2018, the company stated that a significant portion of its research and development investment was in the field of autonomous driving, and it will continue to invest in its main business areas, especially in the direction of new industries, for a period of time to come.
In 2018, the R&D investment of Four Dimensional Map reached 1.166 billion yuan, accounting for 54.65% of the total revenue. From 2019 to the first half of 2023, the company's R&D investment accounted for over 45%. But until the first half of 2023, the revenue of the company's autonomous driving business was only 144 million yuan, accounting for 9.59% of the total revenue of the enterprise, and the gross profit margin was only 7.01%, far lower than other main businesses of the enterprise.
Meanwhile, since 2018, the net profit level of enterprises has also been continuously declining. From 2020 to 2022 and the first three quarters of 2023, the net profit of the company was -357 million yuan, 126 million yuan, -511 million yuan, and -544 million yuan, respectively. In the past two years, the company has been continuously operating at a loss.
Therefore, at the previous shareholders' meeting in 2023, Jiang Xiaoming, the CFO of Siweitu New, stated that in the next 2 to 3 years, in addition to the chip sector, the company will control the scale of research and development investment.
Against the backdrop of the company falling into continuous losses, the largest shareholder of Four Dimensional New has undergone a transformation.
After experiencing multiple equity changes, as early as 2014, Siwei Tuxin had become a company without controlling shareholders or actual controllers. As of the end of June 2023, China Siwei, the largest shareholder of the company, held 8.21% of the shares.
In August, Siwei Tuxin announced that China Siwei had transferred its 6.22% stake in the company to Yitang Xincheng for a consideration of 2.082 billion yuan. As a result, the company's largest shareholder will be changed from China Siwei to Yitang Xincheng under the control of Yizhuang Guotou.
With the change of the largest shareholder, the new management team of SVT has also undergone changes. In October 2023, the company's chairman, Yue Tao, resigned. At the shareholder meeting in December of the same year, Zhang Peng, Chairman of Yizhuang Guotou, was elected as the new Chairman of the company.
In a recent investor Q&A session, Siwei Tuxin also stated that in the future, it will invest in quantity and strive to achieve performance improvement through measures such as focusing on core products and services with clear profit models, providing customers with the ultimate cost-effectiveness of Tier1 (automotive parts first tier supplier) products, improving supply chain management efficiency, accelerating talent turnover and iterative upgrading.