(Yicai Global) Nov. 25 -- Guangdong Galanz Group, China's largest producer of microwave ovens, is taking legal action against a household appliance maker for allegedly infringing its trade secrets.

Guangdong Xinbao Electrical Appliances Holdings and its affiliates have illegally obtained, disclosed and used Galanz's trade secrets to make magnetrons, including copying a full set of product technologies, equipment and processes, Foshan-based Galanz said at an online seminar today.

In response to the allegations, Xinbao told Yicai Global that it does not make microwave ovens and is not involved in the production of magnetrons, the core component in such ovens that converts electricity into microwave energy.

Former Galanz employee Liu Yinbo set up a magnetron manufacturing company after he resigned in 2017 and started supplying Zhongshan Donlim Weili Electrical Appliances. Weili and Xinbao are affiliated companies, both of which are controlled by Guangdong businessman Guo Jiangang, according to details released by Galanz.

Galanz said it started notarizing the magnetron components in microwave ovens sold by Weili after it suspected infringement by Xinbao, and the results confirmed the suspicions. Galanz reported it to the public security authorities in July and submitted a civil lawsuit to the Guangzhou Intellectual Property Court in October.

Galanz and Xinbao are both headquartered in Shunde, Guangdong province. Galanz has long had a more than 50 percent share of China's microwave oven market, while Xinbao focuses on kettles and coffee machines. But as the two companies have expanded in recent years, there has been some product overlap.

The dispute has not yet had a significant impact on Xinbao's share price, which has climbed 161 percent this year. At today's close, the shares were little changed at CNY43.09 (USD6.55), down just 0.2 percent, giving Xinbao a market cap of CNY34.5 billion (USD5.25 billion). The benchmark Shanghai Composite Index fell 1.2 percent.

Editor: Tom Litting