The world’s two largest bitcoin mining hardware makers are once again embroiled in an intellectual property dispute.
Chinese IP trade media IPEconomy reported on Wednesday that Bitmain filed a lawsuit with the Beijing IP Court on April 7 against MicroBT, alleging the Shenzhen-based bitcoin miner maker and founder Yang Zuoxing, a former chief chip designer at Bitmain, of stealing corporate secrets.
Bitmain already sued MicroBT and Yang in 2017 for infringing a patent that Bitmain had been awarded for its technology used in designing an application-specific integrated circuit (ASIC) for bitcoin mining. But the case was dismissed by the Beijing IP Court in 2018, which also revoked Bitmain’s authorized patent altogether.
But it seems Bitmain still hasn’t given up, with the new civil case demanding a damage claim of as much as 99 million yuan, or $15 million, from MicroBT.
The new case again puts the spotlight to the long-time rivalry between the two firms, as MicroBT’s growth since 2019 has significantly eroded Bitmain’s dominance in the bitcoin mining hardware market.
According to IPEconomy, the Beijing IP Court notified Bitmain that it has received the complaint and will proceed accordingly. It’s unclear when the first hearing will be scheduled.
Per the report, Bitmain has accused Yang of stealing corporate secrets after he completed the research and development for Bitmain’s once flagship mining equipment the AntMiner S7 and S9 in May 2016. Bitmain further argued that Yang founded MicroBT to launch a rival product in July before he officially left Bitmain.
Yet Yang’s recount of the history, outlined in a 2018 profile published by CoinDesk, tells a different story.
Friends to foes
The history of the feud dates back to 2014 when Yang joined ASICMiner, a bitcoin mining hardware maker founded in 2012 by Jiang Xinyu – also known as Friedcat on bitcointalk.org.
Shortly after Friedcat’s mysterious disappearance in early 2015, Yang said he joined Bitmain after having presented his full-custom chip design technology to Micree Zhan, Bitmain’s co-founder and chairman.
But Yang said he was on a part-time gig designing chips for Bitmain’s S7 in Shanghai as he didn’t initially fit in with Bitmain’s “working environment” and “didn’t feel respected.”
Bitmain rolled out the S7 in August 2015 and Yang said he subsequently had several rounds of equity negotiations while designing the S9, which was launched a year later.
Per Yang’s recount, the talks didn’t go well. Although Bitmain’s other co-founder, Jihan Wu, was willing to offer two percent of equity, Zhan was said to only comfortable with 0.5 percent.
As the talks fell through, Yang said he ended his contract with Bitmain in June 2016 and launched MicroBT a month later. Nonetheless, the success of the AntMiner S7 and S9 brought Bitmain some $1 billion in net profits during the 2017 bull market, with millions of units sold in one year.
The dispute also brought to the fore some of Yang’s recent legal troubles. Bitmain’s second lawsuit comes months after the Shenzhen prosecutor released Yang from a criminal charge, which was believed to be reported by Bitmain.
Yang was arrested in December 2019 by the police in Shenzhen under a charge of embezzlement but was released on parole at least as of August 2020, per an IPO filing to the Shanghai Stock Exchange by a MicroBT supplier, whose main revenue came from testing chips for the manufacturer.
The arrest came at the back of MicroBT’s growth period in 2019. Per the supplier’s IPO filing, MicroBT’s revenues grew from $62 million in 2017, to $230 million in 2018 and $626 million in 2019.
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