DYSON has accused German rival Bosch of planting a mole in its high-security research and development department in Wiltshire.
The engineering firm, founded by Sir James Dyson, filed proceedings at the High Court claiming a rogue employee at its facility in Malmesbury, was handing company secrets to Bosch for a period of as much as two years.
The alleged spy, who is reportedly Chinese, was one of 100 engineers working on Dyson digital motors, which are key to the firm's cordless technology and Airblade hand dryer.
Dyson - famed for its bagless vacuum cleaner - claims secrets were also passed to Bosch's Chinese motor manufacturer and Bosch's vice president Dr Wolfgang Hirschburger was aware of the engineer's employment.
Bosch Group, which has its UK headquarters in Middlesex and develops automotive and industrial technology, consumer goods, and building technology, declined to comment.
Dyson claims that Bosch paid the mole through an unincorporated "business" created specifically for this purpose.
The engineering firm said it has confronted Bosch with evidence of wrongdoing but it has refused to return the technology nor promised not to use the technology for its benefit.
Mark Taylor, Dyson research and development director, said: "We have spent over 15 years and GBP100 million developing high-speed brushless motors, which power our vacuum cleaners and Airblade hand dryers. We are demanding the immediate return of our intellectual property."
Bosch later released a statement in response to the allegations.
It said: "Dyson employed an individual with a pre-existing consultancy agreement with Bosch Lawn and Garden Limited in relation to garden products, and not vacuum cleaners or hand dryers as Dyson implies.
"Bosch has sought to establish the full details of what occurred, including attempting to establish from Dyson what, if any, confidential information supposedly passed between Bosch and Dyson. Bosch regrets that Dyson has chosen to issue legal proceedings and a press statement at this stage, but will continue to act in the appropriate way."
Dyson said it invests more than £1.5m a week in research and development and employs more than 750 engineers at its Malmesbury headquarters.
Its Dyson digital motors spin at up to 104,000 revolutions per minute - five times faster than an F1 race car.
In 2010, French courts ruled that TTI's Dirt Devil had unfairly copied Dyson's overall look, while the Dyson Air Multiplier fan has seen around 500 infringements in over 30 countries over the past two years.
Dyson, which employs nearly 4,000 people worldwide, sold the equivalent of a vacuum cleaner every 30 seconds in the UK last year.