With their continued prevalence on the streets, folding bikes have grown from being a wobbly novelty to a serious option for the daily commute. Early February sees the UK launch of a new brand in the crowded market, Tern, available exclusively from Evans Cycles. The company has had a bit of a bumpy ride, however, blighted by a bitter spat – both legal and familial – with the market-leader in folders, Dahon.

Tern is owned and run by Joshua Hon and Florence Hon, who also happen to be the son and wife (respectively) of Dr. David Hon, owner of Dahon bikes. In a surprise move in summer 2011, Joshua decided to leave his father’s company and set up on his own, bringing his mother and a number of other Dahon employees with him.

There’s nothing unusual in the prodigal son wanting to fly solo; indeed, the name “tern” is that of a bird, metaphorically spreading it wings. But matters are complicated by the fact that Tern is using many of the same patents and copyrights as Dahon bikes. They claim to have full ownership of these intellectual properties, but Hon Snr vehemently disagreed and called in his lawyers.

 

Murky Allegations

In the latter half of 2011, the two companies exchanged lawsuit and counter-suit, followed by a bitter flurry of press releases denouncing each other. A press release from Dahon stated that: “Dahon welcomes lawful competition in the marketplace. However, the actions of these former officers are unlawful, and their refusal to cease their unlawful behavior has necessitated the instant lawsuit.”

Dahon alleges that Joshua and Florence Hon tried to mount a hostile takeover of the company. When that failed, they annexed its Taiwanese subsidiary, Dahon Global, and formed a rival company. Court documents also claim that they tried to undermine Dahon’s reputation by spreading misinformation about quality control and rumours that the company's Chinese subsidiary was on the brink of bankruptcy.

Tern responded with their own press release: “We believe that the suit is entirely without merit. In addition, we believe that the press release announcing the suit is misleading, inaccurate and defamatory. We're preparing an appropriate legal response.” One such response led to an injunction granted in Germany that prevents Dahon from selling certain models based on designs that Tern now owns. That’s thanks to the very same Taiwanese subsidiary that Tern had succeeded in annexing, Dahon Global.

 

Two Million Served

All things told, it’s an ignoble chapter in the story of one of the most successful cycling brands in the world. In the 1970s, Dr. David Hon moved to California from Hong Kong to study physics, and it was there he developed a passion for bikes. Working with his brother Henry, he studied every existing folding bike patent and showcased his first prototype at the New York Bike Show in 1980. From there, Hon was able to find investment to manufacture it and bring it to market, and in 1982 he founded his bicycle company, Dahon. The company has since sold more than two million bikes, both of the folding and non-folding variety.

Highlights of their output included the Dahon Matrix, a folding mountain bike with 26-inch wheels and front suspension, and the Dahon Hammerhead, which was a non-folding mini-bike with 20-inch wheels. Other bikes made by Brompton and Moulton might have the British pedigree, ingenious design and a devoted following, but it was Dahon who truly made them affordable and mass-market.

The Tern range, by contrast, features more than a couple of innovations of its own. Refining and building upon his experience at Dahon, Joshua Hon is introducing an eye-catching range of designs like the Tern Verge Duo, which features an automatic two-speed internal gear hub, and the Tern Verge X30h, a zippy racing folder with 30 gears.

While the outcome of these legal wranglings have yet to be decided, the Tern bikes will still go on sale. There's the small chance that they may be yanked from the shelves if litigation ever falls in Dahon’s favour. If that happens these bikes will be forever locked away in a warehouse, and the precious few that were available could well become collectors' items. Just don’t ride them in case you diminish their value.

Both Tern and Dahon failed to reply to our requests for a comment, before publication.

Update (18/01): Joshua Hon has since been in touch with us to clarify some of the points raised in this article. We're reprinting his comments below:

1. Dahon as a brand has always been comprised of three cooperating but independent companies: Dahon Global (Taiwan based, but responsible for sales, marketing, product development, distribution), Dahon China (China factory), and Dahon North America (US distribution)

2. Dahon Global has always, from its inception nearly 20 years ago, been 100% owned by Florence Hon and myself. We continue to own and operate this company.

3. Before being named in the suit in the USA, we actually signed countless agreements with Dr. Hon that not only state that we are separate companies, but also that they promise to respect the intellectual property we developed and positively acknowledging that they have no issues with us launching our new brand. However, Dr. Hon did not hold his side of the agreement and filed suit through DNA with claims to which the courts have so far refused to accept - but multiple decisions are expected in January.

4. We did not leave with "a number of other Dahon employees". As mentioned, we continue to own Dahon Global and it continues to exist. Rather the entire Dahon Global team, 100%, and this includes members in Asia, the US, and Europe, decided to move in a new direction and focus energies on the new brand Tern.

5. Florence Hon and I are shareholders in Tern but the other senior managers are also shareholders.

6. Tern is using patents developed by the Tern team, or owned by Dahon Global. Tern is not using any patents or other IP developed by Dahon China or Dahon North America. When Dahon Global was cooperating with Dahon China and Dahon North America, they were allowed access to these patents. Now that we are not, they are no longer allowed use of these patents. The Vector and Ios frame designs, as well as numerous other technologies, designs and copyrights fall into this category.

7. Tern is already shipping bicycles and they'll be landing in the UK next month.

8. There is no possibility that any legal outcome, positive or negative, could "yank" Terns from the shelves.

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Joshua Hon
Vice President | Tern Bicycles