MP Materials has filed a lawsuit against USA Rare Earth, accusing the company of misappropriating trade secrets related to a specialized heat-resistant magnet technology known as grain boundary diffusion. The legal action, filed in June 2026, centers on allegations that a former MP Materials engineer transferred sensitive proprietary information to USA Rare Earth upon joining the rival firm.
MP Materials, which has benefited from substantial U.S. government support aimed at developing a domestic rare-earth supply chain, claims that at least eight key employees were recruited by USA Rare Earth. These employees allegedly possessed confidential knowledge about MP's proprietary processes rather than relying solely on pre-existing expertise. Among them is Kevin Elkins, who worked at MP from 2022 until 2024, including a role as senior engineer in the magnetics division, before accepting a position at USA Rare Earth, where he advanced to associate director and then director roles. MP asserts Elkins took critical information about the grain boundary diffusion technology with him, a charge USA Rare Earth refutes.
Grain boundary diffusion involves applying minute quantities of costly heavy rare earth elements to magnets, enhancing their resistance to heat without diminishing magnetic performance. This innovation is considered vital for high-performance applications in defense, energy, and technology sectors. MP Materials’ CEO has characterized their development efforts as akin to a "private-market Manhattan Project," emphasizing the secrecy maintained around the technology to avoid public disclosure.
USA Rare Earth has denied the accusations, labeling the lawsuit as without merit and maintaining that their research and development activities were conducted independently. The company argues that their magnet technology was developed without reliance on trade secrets from MP Materials.
The legal dispute highlights increasing competition and the complexities involved in establishing a secure and competitive rare-earth supply chain within the United States. Both companies are vying to advance domestic capabilities critical to national security and industrial supply, amid growing concerns about reliance on foreign sources for rare-earth elements used in advanced technologies. The outcome of the case may have significant implications for U.S. efforts to strengthen its rare-earth industry and safeguard intellectual property in a strategic economic sector.