Canaan hits firms with US$14 million lawsuit claiming patent infringements

Nasdaq-listed Canaan has filed a 90-million-yuan (US$14.1 million) lawsuit against two companies for alleged patent infringement, the company said.

The Beijing-based Bitcoin mining hardware manufacturer is suing Shenzhen Gaorui Electronic Technology Co and Sichuan-based Biyinmei in a court in Chengdu, capital of southwestern Sichuan Province.

Canaan claims that Gaorui has used its key patents to make Bitcoin mining chips and hardware without its permission and that Biyinmei sold the products.

The two companies' use of the patented technologies resulted in economic loss to Canaan, the company alleged in a statement. It said the involved patents were approved by China National Intellectual Property Administration.

Gaorui, founded in 2016, deals in assembly and sale of servers and computers, and technical development and sale of electronic components and integrated circuits. It was not available for comment on Friday.

In September, US-based AGMH and Gaorui signed a deal for chip research and mining machine manufacture to sell products valued over US$100 million, according to media reports.

China has cracked down on Bitcoin mining and cryptocurrency trading. But the business of chip design and mining hardware sales is still lucrative globally due to a rebounding Bitcoin price, analysts said.

Canaan's shares closed 1.98 percent higher at US$9.29 on Thursday.