Genesis infringement and 380 million yuan punitive damages: an unethical risk related to performance betting | Meijing Hot Commentary

Every Commentator | Du Hengfeng

Editor | Zhang Jinhe Huang Sheng Xiang Jianglin Proofreading | Cheng Peng

On the evening of March 31, the Growth Enterprise Market listed company Genesis released its 2025 annual report. In 2025, the company achieved total revenue of 5.32 billion yuan, a year-on-year increase of 15.53%; but net profit attributable to shareholders was only 143 million yuan, a decrease of 39.63% year-on-year, mainly due to provisions for compensation related to subsidiary litigation cases. One such case is the Beijing Jingdiao vs. Tian Mou, and the Shenzhen Genesis case, with Shenzhen Genesis being the core subsidiary of Genesis.

In December 2025, Genesis received the second-instance judgment in the intellectual property dispute case with Beijing Jingdiao, which ordered Tian Mou and Shenzhen Genesis to jointly compensate Beijing Jingdiao for economic losses and reasonable expenses totaling about 380 million yuan. Currently, the court has frozen some bank accounts of Shenzhen Genesis and its subsidiaries Yibin Genesis and Zhejiang Genesis, which are 100% owned.

Reviewing the legal documents, a meticulously planned intellectual property “theft case” has been made public. The key figure, Tian Moumou, served at Beijing Jingdiao for 14 years, reaching the position of senior designer in the product design department, and signed a “Confidentiality Agreement for Employees.” However, a month before preparing to leave Beijing Jingdiao, he began to systematically and deliberately carry out large-scale theft of confidential information. For example, he downloaded files from the company server database 162 times, copied files to a shared computer 70k times, and illegally stole over 37k CNC machine design drawings and technical documents.

After leaving Beijing Jingdiao on March 26, 2017, Tian Moumou joined Shenzhen Genesis on the 30th of the same month, only four days later. He even used the pseudonym “Mou Xin” to serve as Vice General Manager of the Glass Machine Project. Before Tian’s employment, Shenzhen Genesis had no infringing glass machine products; half a year after he joined, he applied for patents under Shenzhen Genesis’s name, and soon Shenzhen Genesis made a significant breakthrough in the glass machine field. Even after the Beijing Mentougou Court issued a criminal judgment in July 2019 finding Tian Moumou guilty of infringing trade secrets, Genesis continued to develop complete machines of specific models of glass machines, and its official website still displayed infringing products.

The Civil Code states: “Intentionally infringing on others’ intellectual property rights, where the circumstances are serious, the infringing party may be subject to punitive damages.” The Anti-Unfair Competition Law stipulates that punitive damages are set at “more than one time but less than five times the compensation amount.” The behavior of Shenzhen Genesis was deemed “serious” in this regard.

I noticed a particularly dramatic detail: based on the sales volume, price, and profit margin of the infringing products, the court estimated the compensation base from April 23, 2019, to March 24, 2023, to be 161 million yuan. Tripling this amount results in 645 million yuan, and adding previous periods’ compensation totals to 677 million yuan, far exceeding Beijing Jingdiao’s claim of 380 million yuan. Therefore, the court fully supported Beijing Jingdiao’s claim.

Shenzhen Genesis’s conduct is egregious, and such severe punishment is justified. But for legally aware companies, why would they risk such enormous financial and reputational damage by stealing others’ intellectual property? I believe the key driving force behind this is aggressive performance gambling.

Looking back to late 2015, Genesis’s predecessor, Jinsheng Intelligent, completed its acquisition of Shenzhen Genesis. From 2015 to 2017, Shenzhen Genesis significantly exceeded its performance commitments, with net profit reaching 540 million yuan in 2017—almost twice the promised amount. However, in 2018, due to a sharp decline in sales of core main products—high-speed drilling machining centers—Shenzhen Genesis’s net profit plummeted to 284 million yuan. To expand new revenue sources, Shenzhen Genesis planned a 1.5 billion yuan construction investment. To finance this project, Shenzhen Genesis made performance commitments to a 500 million yuan convertible bond investor, promising net profits of no less than 400 million yuan, 440 million yuan, and 480 million yuan for 2019-2021, respectively. Meanwhile, Shenzhen Genesis also completed multiple equity financings.

Whether due to the need for convertible bond conversions or the valuation growth expectations of investors, Shenzhen Genesis had to meet these performance commitments or demonstrate sufficient growth potential. In reality, in 2019 and 2020, Shenzhen Genesis experienced continued poor performance, with net profits of 271 million yuan and 229 million yuan, respectively. Under the pressure of poor performance and heavy financing stress, there was enough motivation to violate business ethics and earn illicit gains. This is also an important background for why Tian Moumou’s infringement continued even after being sentenced.

Talent poaching is a shortcut for companies to enhance technological capabilities, but it should not include stealing others’ technology. The punitive damages imposed on Genesis have become a landmark case in the field of intellectual property—those who maliciously infringe others’ rights will face penalties far exceeding actual damages. “Injuring the muscles and bones” and “bankruptcy” are not empty words but real deterrents.

Cover image source: Visual China