To a very considerable extent, the recent trajectory of world affairs has reshaped the way industrial competition plays out, particularly across Asia’s major manufacturing and technology hubs. Protectionist foreign security and trade policies and heightened geopolitical rivalry have brought about a business environment in which “battles” over innovation are no longer fought across borders, but between companies operating in the same domestic market. This dynamic is especially visible in Asian economies, where state-led industrial strategies intersect with private-sector competition. Industrial corporations often find themselves competing with each other for favorable market positions and for government support. Knowledge, know-how and proprietary technology often escape leading firms’ institutional control, dramatically increasing the value of intellectual property rights.
The exodus of highly skilled talent from leading established companies in pursuit of personal economic incentives, quicker innovation cycles and new opportunities present an interesting challenge for legal frameworks, whose traditional home vs. foreign focus increasingly shifts to cases of domestic knowledge transfer, blurring the lines between the departure of legitimate know-how and unfair competition. In Asia, where labor mobility within national innovation clusters has been central to rapid industrial upgrading, this shift is particularly consequential and raises the question of whether protectionist and IP-heavy policies may end up decreasing a country’s innovative capacity. This appears to be an issue not only in Western economies but increasingly across East Asia where concerns over copyright and intellectual property rights are significant.
A recent intellectual property-related lawsuit in the battery manufacturing industry, an area of heightened competition in Asia’s clean energy and electric vehicle supply chains, involved CATL, a major producer, and Hithium Energy Storage Technologies Co. CATL alleged that Hithium – founded in 2019 by Wu Zuyu, a former CATL executive – poached CATL’s employees and copied battery designs. According to the case, Wu reportedly worked on founding Hithium immediately after departing CATL in 2019, despite a two-year non-compete agreement meant to prevent him from working on ventures of a similar nature. According to the case, during the non-compete period, Wu represented to CATL repeatedly in writing that he was tending to his family.
In 2023, an arbitration commission ruled that Wu should pay 1 million-yuan (nearly 145,000 dollars) worth of damages to CATL. Wu agreed to the terms and settled through his wife. Hithium filed an application for an initial public offering (IPO) at the Hong Kong Stock Exchange (HKEX) in March 2025, and made a resubmission in late October 2025 after the first application lapsed due to regulatory challenges. Such inconsistencies have come into conflict with the exchange’s regulators, who wish to maintain the reputation of HKEX as a leading Asian financial hub in the eyes of investors, and undoubtably take issue with the fact that such information was not reflected in the company A1 filing.
In the U.S. autonomous vehicles industry, the dispute between Uber and Waymo, which was referred to by the Guardian as “blockbuster,” provides a further example. While this case unfolded in the United States, its implications resonate strongly in Asia, where similar autonomous driving and AI industries are rapidly emerging and the industry is closely watching Western legal precedent. Waymo alleged that Uber stole trade secrets by hiring Anthony Levandowski and replicating their predictive algorithms, which were based on more than 10,000 documents that Levandowski stole from Waymo. Uber ended up paying Waymo much less than the amount the latter sought in its lawsuit but the case highlighted the importance of protecting intellectual property and identifying copied vs. original technologies between competing firms.
These modern examples harken back to the landmark legal case of Cadence vs. Avant! from 1999 in the semiconductor software field. After four employees and a senior executive left Cadence Design Systems to form a new company (later named Avant! Corporation), they proceeded to drain the talent pool of Cadence. Many of their new programmers left Cadence with the critical source code the firm developed, creating one of the most prominent cases that sought to define exactly what intellectual property was and how to protect it. Asian semiconductor powerhouses, from Taiwan to South Korea and mainland China, face similar challenges today as talent circulates within dense regional ecosystems.
Given these examples, striking a balance between enforcing the protection of trade secrets and patents and encouraging innovation and competitiveness should be a priority for lawmakers. For Asian policymakers pursuing industrial self-sufficiency and technological leadership, this balance is particularly delicate. Legitimate cases notwithstanding, companies diverting funds from research and development to legal defense can curtail innovation. At the same time, highly publicized legal battles can foster a business environment in which risk-averse behavior increases, discouraging potential experimentation. Aggressive domestic litigation over non-compete clauses and trade secrets can discourage talented engineers and executives from founding startups, concentrating power in the hands of leading firms or conglomerates, a structure already prevalent in several Asian economies, which, in turn reduce the pressure placed on them to innovate.
Market leaders with secure streams of revenue and limited competition often have little incentive to pursue disruptive research and development initiatives. They prioritize existing business models and incremental growth instead. Of course, intellectual property rights are not the only reason for this. High barriers to entering a market, which include control over supply chains, processing facilities and requiring a business to be built up to an economy of scale, reduce the likelihood of challengers emerging, a pattern evident in capital-intensive Asian industries such as batteries, semiconductors and heavy manufacturing.
Add fears of legal consequences to these market conditions and the result may be a push for top talent to seek opportunities abroad, including within the wider Asia-Pacific region, where enforcing no-compete clauses may be challenging for firms. This can ultimately mean that policies designed to prioritize industrial development within national jurisdictions for the buildup of a country’s competitiveness on the global stage may produce the opposite of their desired effect. Countries can effectively lose the talent they are so desperately trying to hold on to.
As global competition increasingly plays out through national innovation ecosystems rather than across open borders, the governance of talent mobility within domestic markets becomes a strategic concern rather than a purely legal one. In Asia, where innovation ecosystems are tightly interwoven with national development strategies, this challenge carries long-term geopolitical and economic implications. If intellectual property regimes are enforced in ways that privilege incumbency over competition, domestic legal battles risk weakening the very industrial base they are meant to protect. The challenge for policymakers, therefore, lies in crafting frameworks that safeguard genuine trade secrets without suppressing entrepreneurial dynamism, ensuring that efforts to secure competitiveness do not devolve into attrition which is counterproductive to market development.
