Foxconn International Holdings, the world's biggest contract mobile-telephone maker, said two subsidiaries had sued BYD in Hong Kong, alleging its mainland competitor had been given confidential information by former Foxconn employees.
BYD, the mainland's largest maker of rechargeable batteries, plans to spin off its handset business this year, posing a serious threat to Foxconn's market leadership.
Shenzhen Futaihon Precision Industry and Hong Fu Jin Precision Industry (Shenzhen), both Foxconn units, jointly filed the lawsuit against BYD and its subsidiaries in the High Court, claiming they knowingly and intentionally procured confidential data from former employees.
'We have a strong conviction to protect our intellectual property and trade secrets as well as customers' confidential information,' Foxconn chairman Samuel Chin Wai-leung said.
He denied he was concerned about the expansion of BYD's handset division once it achieved a separate listing in Hong Kong.
'Competition will make us stronger,' said Mr Chin. 'We still have fabulous relationships with all of our customers and we are not losing ground to BYD.'
A BYD spokesperson said the company 'intended to vigorously defend the allegations'.