MP Materials filed a lawsuit against rival USA Rare Earth in a Texas court on May 22. The complaint accuses USA Rare Earth of stealing proprietary technology used to produce rare earth magnets.
The suit alleges USA Rare Earth hired a former MP Materials employee to acquire trade secrets. These secrets specifically involve a specialized grain boundary diffusion process.
MP Materials claims the hiring is part of a broader pattern of misappropriating trade secrets to accelerate development. The company currently operates as the only scaled rare earth producer in the United States.
This technology is critical for domestic supply chains supporting electric vehicles and defense systems. The lawsuit intensifies the rivalry between these two leading U.S. companies. Shares of both MP Materials and USA Rare Earth fell more than 3% following the news. USA Rare Earth has not yet issued a public response to the allegations.