“Poaching” leads to more than 380 million yuan in sky-high compensation: Genesis’ subsidiary was ruled to have “maliciously infringed” trade secrets; it must destroy all confidential materials involved, and all employees must sign a “non-infringement” commitment letter.

Ask AI · How did the compensation amount soar from tens of millions to hundreds of millions?

Everyday Economic News Reporter: Wu Zepeng Editor: Dong Xing Sheng

Hired an employee, paid 382 million yuan in damages.

A “battle” over business secrets caused by “poaching” finally concluded at the end of 2025, leaving Chuangshi (300083.SZ, stock price 7.61 yuan, market value 12.67 billion yuan) and its over 90k shareholders with a compensation of 382 million yuan.

More than six years ago, a peer company, Beijing Jingdiao Technology Group Co., Ltd. (hereinafter Beijing Jingdiao), filed a lawsuit accusing former product manager Tian Moumou of taking away tens of thousands of drawings and technical secrets upon resignation. Tian Moumou then joined a subsidiary of Chuangshi, Shenzhen Chuangshi Machinery Co., Ltd. (hereinafter Shenzhen Chuangshi), which used these technologies to quickly launch competing products and seize market share.

In the first instance, the court ordered the defendant to pay 12.8 million yuan (including reasonable expenses), and both parties appealed. By the end of 2025, the Supreme People’s Court finalized that Shenzhen Chuangshi’s infringement of trade secrets was “malicious and serious,” increasing the compensation to 382 million yuan—thirty times the previous amount.

On the evening of March 31, Chuangshi released its 2025 annual report: total operating revenue of 5.32 billion yuan, up 15.53% year-on-year; but net profit attributable to the parent was only 143 million yuan, a sharp decrease of 39.63% year-on-year. The above judgment negatively impacted the company’s net profit for 2025 by about 306 million yuan.

Image source: Annual report screenshot

However, the cost of this lawsuit goes far beyond monetary compensation. The judgment obtained by Daily Economic News shows that the Supreme Court required Shenzhen Chuangshi to destroy all drawings and technical documents containing the involved trade secrets—whether paper or electronic—and to notify shareholders, directors, supervisors, and all employees of the judgment and cease infringement via internal notices, requiring them to sign confidentiality and non-infringement commitments.

Carefully Planned “Job Hopping”: Over 70k copies of files copied, more than 30k documents stolen

The focus of this lawsuit storm—Shenzhen Chuangshi, now the core operating entity of Chuangshi’s CNC machine tool business. Its story intertwines capital operations, industrial transformation, and intellectual property infringement risks.

Looking back to 2015, Chuangshi’s “predecessor” was called Jing Sheng Precision, mainly engaged in precision molds and plastic structural parts, far from the current CNC machine tools. At that time, Shenzhen Chuangshi was one of its equipment suppliers, with business dealings between them.

To quickly enter the profitable high-end CNC machine tool industry, Jing Sheng Precision made a major strategic shift in 2015, investing 2.4 billion yuan to acquire 100% of Shenzhen Chuangshi through share issuance and cash payment, thus entering the high-end CNC machine tool sector. This “snake swallowing an elephant” acquisition was seen as a glamorous strategic turnaround, with high market expectations.

Peace was broken in the second half of 2019 when another domestic machine tool giant, Beijing Jingdiao, filed a lawsuit against Shenzhen Chuangshi and an employee, Tian Moumou. Beijing Jingdiao claimed that after Tian Moumou left, he joined Shenzhen Chuangshi and was suspected of stealing and using Beijing Jingdiao’s trade secrets.

According to court findings, Tian Moumou’s “job hopping” was not an ordinary resignation and re-employment but a carefully planned theft operation. He began planning large-scale theft a month before leaving, exploiting vulnerabilities in the company’s data management system, downloading files from the server database 162 times, copying files via network sharing from his personal computer to a public computer over 70k times, then stealing the downloaded files using USB drives and external hard drives, totaling over 37k CNC machine design drawings and technical documents.

More intriguingly, after leaving Beijing Jingdiao, Tian Moumou almost seamlessly joined Shenzhen Chuangshi. The judgment shows he used the alias “Mou Xin” at entry and quickly became deputy general manager of the company’s glass machine project. The glass machine is a core product of Beijing Jingdiao. A key technical backbone carrying tens of thousands of core technical documents from his former employer, arriving under a pseudonym to a competitor’s key project, clearly reveals the intent of “poaching.”

The second-instance judgment records: “Although Tian Moumou and Shenzhen Chuangshi (hereinafter Shenzhen Chuangshi) had an employment relationship, from the perspective of infringing trade secrets, the two had close mutual intent, closely cooperated in actions, and their combined conduct caused the same damage—using the involved trade secrets without permission from Jing Sheng Precision (Beijing Jingdiao), severely eroding Jingdiao’s glass machine market share. Therefore, they should be recognized as jointly infringing the trade secrets.”

However, the litigation process was complicated. Beijing Jingdiao initially claimed 92 million yuan, then sharply increased the claim to about 382 million yuan in February 2022. In May 2023, the company announced that the first-instance judgment by Beijing Intellectual Property Court ordered the two defendants to pay 12.8 million yuan. This amount was based solely on the profit from 55 specific models of machines sold by Shenzhen Chuangshi, totaling 276.2k yuan.

This judgment temporarily eased Chuangshi’s worries. The company disclosed in subsequent announcements that, according to its legal counsel, the appellate court was unlikely to support a significant increase in damages, so the company only provisioned 14 million yuan as estimated liability based on the first-instance ruling.

90k yuan: The true cost of “poaching” calculated by the appellate court

However, the Supreme Court’s final ruling shattered this optimistic expectation.

In December 2025, the Supreme Court fully supported Beijing Jingdiao’s claim for 70k yuan in economic damages, plus 2 million yuan in reasonable expenses, totaling 382 million yuan. The court’s wording was stern, recognizing Shenzhen Chuangshi’s “obvious malicious infringement.”

The appellate court also emphasized that before being acquired by Jing Sheng Precision in 2015, the series of milling and tapping machines accounted for up to 95% of Shenzhen Chuangshi’s main business revenue. After Tian Moumou joined in March 2017, Shenzhen Chuangshi rapidly rose in the glass machine field, with glass machines becoming its core product.

The Supreme Court specifically pointed out that Beijing Jingdiao’s R&D costs for just the “glass grinding machine” project reached 363 million yuan. Tian Moumou and Shenzhen Chuangshi, at nearly “zero cost,” appropriated the “glass grinding machine technology”—a key intangible asset developed over 15 years with billions of yuan invested, containing numerous trade secrets and vital to Beijing Jingdiao’s core competitiveness—further highlighting the severity of infringement and deep subjective fault.

In fact, the damages calculated by the appellate court based on infringement profits amounted to 30k yuan, far exceeding Beijing Jingdiao’s claimed compensation of about 70k yuan, and the court fully supported this.

Additionally, the key individual, Tian Moumou, had previously been sentenced to 1 year and 10 months in prison and fined 100k yuan by the Mentougou District People’s Court in Beijing on July 18, 2019, for infringing Beijing Jingdiao’s trade secrets.

Looking back, the initial “poaching” action was highly profitable for Shenzhen Chuangshi—costing only the salary of one employee, it leveraged billions of yuan worth of technological achievements. However, the ultimate price was 382 million yuan in damages, destruction of all confidential materials, and full staff signing non-infringement commitments—a “penetrating” punishment.

The best net profit performance in nearly a decade wiped out by infringement compensation

According to Chuangshi’s annual report released on the evening of March 31, 2025, the huge compensation of nearly 37k yuan severely impacted the company’s performance, with the judgment negatively affecting net profit attributable to the parent by about 276.2k yuan. The company achieved an operating revenue of 5.32 billion yuan, up 15.53% year-on-year, but net profit attributable to the parent was only 143 million yuan, a significant drop of 39.63% from 2024’s 237 million yuan.

Looking at the more reflective measure of core profitability—non-recurring profit attributable to the parent—the situation is even clearer: last year, Chuangshi achieved 434 million yuan in non-recurring net profit, the best in nearly ten years. Unfortunately, this positive result was eroded by the damages, accounting for about 70%. Based on last year’s operating profit of 526 million yuan, this damage accounted for nearly 60%.

Currently, this astronomical compensation case has entered enforcement. Chuangshi disclosed that after receiving the appellate judgment, it attempted negotiations with Beijing Jingdiao on performance fulfillment but failed to reach an agreement. Subsequently, Shenzhen Chuangshi was listed as a person subject to enforcement.

According to the latest update on March 19, the applicant, Beijing Jingdiao, applied for property preservation, and Shenzhen Chuangshi’s two important subsidiaries—Yibin Chuangshi Machinery Co., Ltd. and Zhejiang Chuangshi Machinery Co., Ltd.—had their 100% equity frozen due to this lawsuit.

Regarding the appellate outcome and subsequent compensation payments, Daily Economic News reporters contacted Chuangshi multiple times via phone and email on March 31 and April 1 but received no response. Beijing Jingdiao explicitly declined interviews.

It should be noted that the cost of this lawsuit is far more than money. The Supreme Court required Shenzhen Chuangshi to destroy all drawings and technical documents containing the involved trade secrets and to notify shareholders, directors, supervisors, senior managers, and all employees via internal notices, requiring them to sign confidentiality and non-infringement commitments.

Moreover, the court explicitly stated that the cessation of infringement should last until the trade secrets become public knowledge.

Chuangshi’s main business is not bad: high revenue growth, overseas income up nearly 90% year-on-year

In fact, even without the involved trade secrets, Chuangshi’s performance remains strong, with its core business maintaining rapid growth in 2025.

As one of China’s leading enterprises in CNC machine tools, Chuangshi has a solid market foundation and brand influence in the 3C (computers, communications, consumer electronics) industry. In 2025, the global consumer electronics market entered a recovery cycle, and the rise of AI technology further stimulated a new wave of replacement.

Benefiting from this, the demand for Chuangshi’s core products—drilling and milling centers mainly used for processing structural parts of 3C products—remained strong, with annual revenue reaching 677M yuan, up 13.45%. Company executives stated in investor communications that, besides AI innovation, new materials like titanium alloys and foldable screens, as well as new form factors in mobile phones, increased demand for processing equipment, bringing clear incremental market needs for their drilling and milling machines.

If the 3C business is the “ballast stone” of Chuangshi, then overseas business has become the most dazzling “growth pole” in 2025. The annual report shows that overseas revenue reached 391 million yuan, an 88.26% increase year-on-year. This breakthrough is attributed to the company’s accelerated global strategy.

Image source: Annual report screenshot

It is understood that Chinese machine tool companies mainly export products. Chuangshi cited a report from the German Machine Tool Builders’ Association, indicating that in 2025, China’s machine tool exports surpassed Germany for the first time, with a 21.6% share of the global market, ranking first worldwide.

Chuangshi stated that its Vietnam production base officially started operation in 2025, marking a new stage from “product going abroad” to “capacity going abroad.” The company also established an overseas division, actively exploring markets in Vietnam, Indonesia, Turkey, Italy, Mexico, Brazil, and other countries, continuously expanding growth space, and utilizing global resources to serve customers more efficiently and with higher quality.

In addition to consolidating its advantages and expanding overseas, Chuangshi keenly seized the structural opportunities brought by emerging industries. The company actively laid out in new energy vehicles, AI liquid cooling, embodied robots, and low-altitude economy sectors, viewing them as future core growth points.

For example, in response to AI server cooling needs, the company launched combined product solutions including drilling and milling, vertical, and profile machining centers; for complex structural parts like joints and frames of embodied robots, it provides five-axis linkage machining centers and other high-end equipment.

Now, this more than six-year-long “lawsuit war” has come to an end. It leaves a lesson for Chinese manufacturing: relying on “poaching” as a shortcut may seem quick, but the cost is high. When an employee takes tens of thousands of drawings to switch jobs, or a company tries to “zero-cost” acquire R&D results worth billions, judicial rulings give a clear warning—the essence of competition in technology-intensive industries is not who “poaches” faster, but who can run farther within the rules.

Respect innovation achievements, revere legal boundaries—these are the true moat for enterprises.

Daily Economic News