Bitmain has re - filed a lawsuit against mining firm Micro BT on charges of stealing trade secrets
Two of the largest mining companies in China have again entered into a legal confrontation over the issue of intellectual property, writes The Block, citing local media.
On April 7, Bitmain filed a lawsuit against MicroBT, accusing the company and its founder, Yang Zoxing, who had previously developed chips for Bitmain, of stealing trade secrets. Bitmain filed a similar lawsuit in 2017, accusing the company, along with its founder, of violating its patent rights for the technology used in specialized integrated circuits (ASICs) for bitcoin mining. In 2018, the court dismissed the lawsuit and simultaneously revoked the Bitmain patent.
The rapid growth of MicroBT since 2019 has significantly affected Bitmain's market share. Against this background, the latter recalled old grievances and now intends to recover $15 million in damages from MicroBT. Bitmain claims that Zoxing took advantage of the developments that he conducted for the company in preparation for the release of the advanced at that time miners AntMiner S7 and S9. Bitmain also claims that he opened his own competing company, while he was still listed as its employee.
The story goes back to 2014, when Zoxing joined the bitcoin mining equipment company ASICMiner. It was discovered in 2012 by Jiang Xinyu, also known as Friedcat. Xinyu mysteriously disappeared in 2015, after which Zoxing began working for Bitmain, presenting its co-founder and chairman Micri Zhang with a customized chip manufacturing plan.
Zoxing claims that when developing the miner, S7 collaborated with Bitmain on a part-time model, as he initially did not fit into the "working conditions" of the company and did not "feel respect for himself". Bitmain released the S7 in August 2015, and Zoxing, according to his own words, entered into a dialogue with her about equity participation while he was working on the S9. Negotiations did not work out, after which in June 2016, Zoxing broke off relations with Bitmain and opened MicroBT a month later. In any case, the AntMiner S7 and S9 sales brought Bitmain about $1 billion in profit in 2017, amid the rise of the bitcoin market.
Zoxing himself was only released a few months ago from the criminal prosecution, which is believed to have been initiated by Bitmain. He was arrested by police in Shenzhen in December 2019 on embezzlement charges and was granted parole in August 2020. MicroBT's revenue over the same period increased from $62 million in 2017 to $230 million in 2018 and $626 million in 2019.