Dyson has accused German rival Bosch of having a mole within a high-security research and development department.
The engineering firm founded by Sir James Dyson filed proceedings at the High Court claiming a rogue employee at its facility in Malmesbury, Wiltshire, 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.