Core technology secrets leaked; Tianci Materials subsidiary lawsuit claims 14.72 billion yuan in damages

China Economic News reporter Chen Jiayun, Beijing report

Tianci Materials (002709.SZ), a leading company in lithium battery materials, has filed a lawsuit again over alleged trade secret infringement.

On the evening of April 1, Tianci Materials issued an announcement saying that its wholly owned subsidiary, Jiujiang Tianci High-Tech Materials Co., Ltd. (hereinafter “Jiujiang Tianci”), filed a lawsuit with the Guangdong Provincial Higher People’s Court against Shenzhen Yanyi New Materials Co., Ltd. (hereinafter “Shenzhen Yanyi”), Zhejiang Yanyi New Energy Technology Co., Ltd. (hereinafter “Zhejiang Yanyi”), and former employees Li and Zheng Long, among others—12 parties in total—seeking compensation for economic losses of RMB 1.472 billion.

A spokesperson for Tianci Materials told a reporter from the China Business News that the figure of RMB 1.472 billion is not a rough estimate made unilaterally, but was arrived at through comprehensive calculations that take into account the infringer’s relevant production facilities and equipment scale, along with the company’s expected market loss, among other factors.

Seeking compensation of RMB 1.472 billion

According to the announcement, Jiujiang Tianci accuses the defendants of obtaining a complete set of core trade secrets of the company—such as industrialized production technology for liquid lithium hexafluorophosphate and liquid lithium bis(fluorosulfonyl)imide, as well as design details for supporting production lines and equipment parameter information—through improper means including theft and illegal copying.

Specifically, defendant Li worked at Jiujiang Tianci from 2017 to 2021, holding roles including Director of Process Technology and Chief Engineer, and thus had access to core technical confidential information and signed confidentiality agreements. Jiujiang Tianci alleges that after Li left the company, in order to obtain benefits, he leaked the core technical secrets to Shenzhen Yanyi, Zhejiang Yanyi, Yue, Zhang Hui, and others, and that these were directly applied to the latter’s projects of “an annual production of 100,000 tons of liquid lithium hexafluorophosphate” and “an annual production of 10,000 tons of lithium bis(fluorosulfonyl)imide,” while also illegally disclosing technical information by applying for patents.

Jiujiang Tianci asks the court to order the 12 defendants to immediately stop the infringement, destroy the infringing production lines and materials, and jointly compensate for economic losses of RMB 1.472 billion as well as expenses for safeguarding rights.

Tianci Materials stated that this lawsuit was brought independently by its subsidiary and is expected not to cause direct negative impact on the listed company’s current-period profit and loss. However, as the case has not yet been heard, there is uncertainty regarding the final outcome.

Previously, on September 6, 2024, the People’s Procuratorate of Hukou County filed a public prosecution with the People’s Court of Lianxi District, Jiujiang City, Jiangxi Province, accusing the defendant entity Zhejiang Yanyi, and defendants Yue and Zhang Hui, of the crime of infringement of trade secrets. The People’s Court of Lianxi District, Jiujiang City, Jiangxi Province formed a collegial panel in accordance with law and applied the ordinary procedure. Because the case involves trade secrets, hearings were not held publicly on December 26 and 27, 2024, and on January 13, 2025. During the trial, with approval from the Intermediate People’s Court of Jiujiang City, the trial period was extended once; with approval from the Supreme People’s Court, the trial period was extended four times. The trial has now concluded.

An announcement released by Tianci Materials in January 2026 shows that Zhejiang Yanyi and relevant responsible persons were convicted of the crime of infringement of trade secrets for the same disclosure incident, and the entity was fined RMB 20 million.

Regarding the above matters involved in the lawsuit, the reporter called Zhejiang Yanyi; as of the time of publication, no response had been received.

A spokesperson for Tianci Materials said that in 2025, the lawsuits focused on criminal accountability. By contrast, the current claim of RMB 1.472 billion is a civil accountability lawsuit. Both are advancing around the same trade secret infringement incident, proceeding from two different dimensions—criminal characterization and civil compensation—and are not independent, unrelated cases.

Repeatedly filing lawsuits to safeguard rights

This lawsuit is not the first time Tianci Materials has sought to protect its commercial secrets.

In July 2025, Jiujiang Tianci, concerning the leak of the same core technology (the process for liquid lithium hexafluorophosphate), filed a lawsuit with the Guangdong Provincial Higher People’s Court against 12 parties including Yongtai Technology, seeking compensation of RMB 887 million. That case also targeted Li and Zheng Long, accusing them of violating confidentiality obligations by leaking technical materials to competitors for use in the annual 134,000-ton liquid lithium salt project.

On September 16, 2025, Tianci Materials announced that Li and Zheng Long, for the crime of infringement of trade secrets, were finally sentenced to fixed-term imprisonment of three years and three months and two years and three months, respectively, and were fined RMB 4.5 million and RMB 1.5 million.

Regarding the progress of the case involving the previously implicated former employee Li, a spokesperson for Tianci Materials said that the criminal portion of this trade secret leakage incident has already completed sentencing, and the infringing acts of relevant responsible persons have been characterized by judicial authorities. However, as of now, the compensation amounts of RMB 880 million involved in the 2025 lawsuit have not yet been paid, and the related civil compensation procedures are still ongoing.

According to Tianci Materials’ 2025 annual report, the company achieved full-year operating revenue of RMB 16.650 billion, up 33.00% year over year; attributable net profit to the parent company was RMB 1.362 billion, up 181.43% year over year; and net profit excluding non-recurring items was RMB 1.360 billion, up 256.32% year over year.

As for the reasons for the growth in performance, Tianci Materials stated that demand in the new energy vehicle and energy storage markets has grown rapidly, and the company’s sales of lithium-ion battery materials have increased significantly year over year. At the same time, due to the ramp-up of capacity for the company’s core raw materials and cost control in production processes, the company’s overall profitability has improved.

(Editor: Dong Shuguang; Review: Wu Kezhong; Proofread: Liu Jun)

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