During the Track Record Period, the Petitioner had filed patent invalidation proceedings against 25 patents (the "Disputed Patents").
Business · p. 182
However, following examination of materials submitted by the Petitioner, the Patent Re-examination Department declared 20 patents invalid and two patents partially invalid primarily on the basis of lack of inventiveness.
Business · p. 183
for two of such patents, the Patent Re-examination Department’s decision declaring the patents invalid was upheld by the Beijing Intellectual Property Court at first instance, following which we filed appeals to the Supreme People’s Court, and such appeals remained pending as of the Latest Practicable Date
Approximately 10.6% of these projects were subject to obligations arising from the relevant open-source software licenses, which require that if we modify certain software components, the modified source code must also be open sourced.
Business · p. 160
Accordingly, such partial software open-source obligations will not result in negative impact on our research and development, production, or business operations, nor will they lead to the leakage of our technological secrets or impairment of our intellectual property rights.
For example, we were involved in a copyright infringement proceeding commenced by PTC Inc. in 2024 in relation to the alleged unauthorized use of certain industrial design software.
Business · p. 164
In August 2026, the Chongqing High People’s Court rendered its final judgment, ordering us to pay economic damages of approximately RMB9.6 million and litigation costs and other expenses of approximately RMB0.5 million.
During the Track Record Period and up to the date of this document, we were involved in an aggregate of 71 SEP-related disputes with 12 SEP holders, of which 62 had been settled in relation to nine SEP holders.
Business · p. 167
Such preliminary injunction took effect and remained in force as of the Latest Practicable Date.
Business · p. 169
As of December 31, 2023, 2024 and 2025 and April 30, 2026, the provisions made for SEP-related disputes amounted to RMB2,390.2 million, RMB900.9 million, RMB1,030.9 million and RMB1,224.9 million, respectively.
Our PRC Legal Advisor is of the view that the Group has lawful ownership of, or valid rights to use, and is not subject to any pledge, mortgage, security or other material restrictions of, such patents and software copyrights.
Business · p. 155
These intellectual properties were developed by Mr. Zhu in the course of his employment with us and constitute service inventions and service works under applicable laws, with title vesting in the Group and no co-inventorship arising between Mr. Zhu and the Group.
According to our PRC legal advisers, we lawfully own all patents, trademarks, copyrights and domain names registered and have obtained complete ownership certificates.
During the Track Record Period and up to the Latest Practicable Date, we confirm that we have utilized open-source software in the PRC in compliance with the relevant license terms as follows: (a) our use is limited to compression, development, database and debugging tools as auxiliary development tools, without any modification, resale, lease or secondary distribution
We were involved in certain intellectual property protection and infringement claims during the Track Record Period and all such proceedings had been fully settled as of the Latest Practicable Date.
As advised by our PRC Legal Advisor, during the Track Record Period and up to the Latest Practicable Date, we had complied with all PRC applicable intellectual property laws and regulations in all material respects.
Business · p. 156
As of June 30, 2026, we had 246 registered patents, 46 trademarks, 21 software copyrights, 161 integrated circuit layout design rights and one domain name registered in the PRC.
Between 2020 and 2022, we were involved in patent proceedings in the U.S. and China with VARTA Microbattery GmbH (“VARTA”) in relation to certain historical models of partially sealed metal-casing button batteries (the “Patent Proceedings”).
Business · p. 197
As advised by the Company’s U.S. Legal Advisor, on the basis that (i) the relevant settlement arrangements were entered into to resolve the Patent Proceedings, pursuant to which the parties mutually released each other from past claims and liabilities and covenanted not to sue; (ii) the related proceedings have been dismissed with prejudice or otherwise withdrawn; and (iii) we have not received any further claim, demand or proceeding from VARTA since the settlement and up to the Latest Practicable Date, the Patent Proceedings have been fully and finally resolved, and the likelihood of any re-opening of such historical claims by VARTA against us is low.
In January 2025, Razor USA LLC and Shane Chen filed a complaint with the ITC under Section 337 of the Tariff Act of 1930 against multiple respondents, including Golabs, alleging that certain GOTRAX branded electric balance bikes (the “Relevant Products”), infringed U.S. Reissue Patent Nos. RE46,964 and RE49,608 (collectively, the “Asserted Utility Patents”) and U.S. Design Patent No. D739,906 (the “Asserted Design Patent” and, together with the Asserted Utility Patents, the “Asserted Patents”).
Business · p. 180
As of December 2025, the complainant withdrew its design patent infringement allegations. The settlement conference was not held and the case remains under review by the ITC as of the Latest Practicable Date.
As of the Latest Practicable Date, we were involved in certain patent infringement proceedings initiated by Micron Technology, Inc. (“Micron”), one of our top suppliers during the Track Record Period, alleging that, inter alia, certain NAND flash memory dies and SSD products sold by us and other named defendants in Germany, France and the United Kingdom infringe certain European patents of the claimant (the “IP Proceedings”), where Yangtze Memory Technologie Co., Ltd. (“YMTC”), our another top supplier during the Track Record Period, is the manufacturer of the litigation-related memory dies that are incorporated into the accused products sold by us.
Risk Factors · p. 53
On July 14, 2026, Micron filed a Statement of Claim before the Local Division Mannheim of the Unified Patent Court (“UPC”) (docket no. UPC_CFI_2556/2026) alleging that, inter alia, certain NAND flash memory dies and SSD products sold by Lexar Europe B.V. (“Lexar Europe”), one of the named defendants and a subsidiary of the Company, and other named defendants in Germany and France infringe European patent EP 2745295B1 (“EP’295”).
Business · p. 216
it is noted that solely based on the Statement of Claim, Micron has provisionally estimated the value of the action to be EUR 2,000,000 and EUR 1,000,000 in relation to the Micron UPC Europe Lawsuit and the Micron Munich Lawsuit, respectively.
According to the freedom-to-operate (“FTO”) search and analysis conducted by our IP counsel on our Core Product and key products in China and U.S., our Directors and our IP counsel believe that (i) we can implement the product technology of all of Core Product and key products in China and U.S. without any material risk of patent infringement; (ii) given that we do not have plan to commercialize our Core Product in Australia as of the Latest Practicable Date, our Directors are of the view that the FTO search and analysis in China and the U.S. should be sufficient to prevent potential risks in relation to the infringements of IP rights.
As advised by our PRC Legal Advisor, we have been in compliance with all applicable intellectual property laws and regulations in all material respects during the Track Record Period and up to the Latest Practicable Date.
We fully comply with the intellectual property laws, rules and regulations, and make use of such rules, laws and regulations to protect our intellectual property.
As advised by our PRC Legal Adviser, under the relevant agreements and statement, although our rights are non-exclusive, we have rights to use the Vision Perception Algorithm, source code and SDK software.
Business · p. 175
As further advised by our PRC Legal Adviser, there is no material legal impediment to our Group's use of the Vision Perception Algorithm and the related source code.
In certain less important jurisdictions, the registration process remains ongoing due to time-consuming administrative procedures.
Business · p. 189
For the remaining jurisdictions, namely Italy and Spain, the transfer is expected to be completed by the fourth quarter of 2026.
Business · p. 189
Dr. Yin remains recorded as a co-owner of certain patent rights of the Core Products in certain jurisdictions solely because those patents are registered in jurisdictions outside the PRC, for which the registration of the transfer is pending completion as described above.
Moreover, based on the results of the Freedom-to-Operate (“FTO”) analysis, our IP Legal Adviser and Directors are of the opinion that, in relation to the chemical molecular structures currently being developed for our Core Products, no third-party patents exist in the PRC or the U.S. that would reasonably be expected to impede the commercialization of such products, and that we have not infringed any valid and enforceable patents or other intellectual property rights of any third party.
On March 27, 2026, Shanghai Jiayin Biotechnology Co., Ltd.(上海嘉因生物科技有限公司) (the “Shanghai Jiayin”) filed a lawsuit with the Intermediate People's Court of Suzhou Municipality, Jiangsu Province (the “Suzhou Court”), alleging that the inclusion of the words “嘉因” and “嘉因生物” in the enterprise name of Hangzhou Jiayin constitutes trademark infringement and unfair competition, and seeking damages of RMB60.0 million.
Business · p. 207
On July 13, 2026, we submitted an objection to jurisdiction to the Suzhou Court, requesting that the case be transferred to the Intermediate People's Court of Hangzhou Municipality for trial.
Business · p. 207
Our PRC legal adviser with respect to intellectual property laws in the PRC is of the view that the infringement claims asserted by Shanghai Jiayin are without merit, and that the risk of our being required to pay RMB60.0 million in damages in connection with such alleged infringement is remote.
Based on the FTO Analysis, our Directors are of the view that there are no valid and enforceable patents of any third party in China and the U.S. covering the amino acid sequences or indications currently under development of our Core Products and we have not infringed any valid and enforceable patents or other IP rights of any third parties.
Business · p. 212
No valid claims of third party patents in the U.S. and the PRC that are infringed by FT-002 or FT-003 have been identified.