The invincible Pentagon of United States did not expect that it would be accused in court one day.
On October 19, Chinese drone maker DJI said it had filed a lawsuit against the United States Department of Defense for its company's inclusion on the so-called "Chinese Military Enterprise" (CMC) sanctions list in Washington District Court.
DJI said it was completely wrong to designate the company as a "Chinese military enterprise" and that the designation caused significant financial losses to the company. DJI is the world's largest manufacturer of civilian and commercial drones, and its products are widely used in the police, firefighting, emergency response, commercial and entertainment sectors in United States and around the world, "neither owned nor controlled by the Chinese military."
This "Chinese military enterprise" sanctions list was compiled by the United States Congress in 2021 through legislation requiring the Department of Defense. So far in 2022, 73 Chinese companies have been included in the "blacklist". This means warning United States entities and companies that doing business with listed businesses poses a "national security risk." As tensions between China and the United States continue, the United States has used the list as a means to suppress Chinese companies.
After being "blacklisted", DJI has been trying to communicate with the Pentagon. For the past 16 months, however, the Pentagon has been playing deaf and dumb and has not responded in any way. In response, DJI said that it had "no choice but to seek relief in federal courts."
This prosecution is another powerful counterattack by DJI in the face of United States's unreasonable suppression, and uses legal means to defend its rights and interests.
Currently, DJI controls about 70% of the global drone market and about 75% of the United States consumer drone market. Data from scientific research institutes and institutions show that Chinese drones have a market share of 90% in United States law enforcement agencies, and as high as 92% in the field of emergency rescue. As of 2020, drones are used by government departments in all 50 states in the United States, 90% of which are manufactured by DJI.
Since 2017, the United States has begun a series of difficulties with DJI drones.
In 2017, the United States Department of Defense banned the use of DJI drone products by the US military on the grounds of so-called "data security risks". However, due to the lack of products with the same cost performance, this ban had to be lifted in 2018.
In 2018, the United States Department of the Army required all subordinate units to ban all DJI drone products, but subordinate units did not strictly enforce them.
May 2019: The United States Department of Homeland Security expressed concern about DJI drone data security and banned federal agencies from purchasing DJI drones.
In 2019, the United States Department of Commerce included DJI drones in the list of goods that need to significantly increase punitive tariffs, and DJI drones chose to increase prices to offset the losses, and sales are still unabated.
In 2020, the United States Department of Commerce announced that it would add a number of Chinese companies, including DJI, to the "Entity List" for export control on the grounds of "violating United States national security." This deprives DJI of technology and products from United States and United States companies.
In March 2022, United States design software Figma suddenly stopped working for DJI, causing DJI to be unable to retrieve its design drawings for a while.
However, since these repressive measures come from different departments such as the Department of Defense, the Department of Homeland Security, and the Ministry of Commerce, and do not have the overall legal effect, they do not actually completely prevent the sale and use of DJI drones in United States. DJI's market share in North America once reached 85%.
Administrative sanctions did not work, and the United States came up with a new trick. That is to suppress DJI through patent traps.
As mentioned earlier, as early as 2021, Textron, a military enterprise that produces helicopters in United States, sued DJI, claiming that the drones produced by DJI infringed two of the company's patents. The case was awarded $278.9 million by a federal jury in Waco, Texas, United States, on April 21, 2023.
The lawsuit involved two patents, one for "remote tracking control technology" filed by Textron in 2004 and approved in 2011; The other is "Aircraft Automatic Hover Control Technology," which Textron applied for in 2011 and was approved in 2015.
But in fact, in 2009, before Textron applied for a patent for "automatic hover control technology for aircraft," DJI had already developed and used this technology independently. At the same time, Textron itself has not produced civilian drone products related to these two technologies, which is completely malicious squatting, that is, the act of obtaining patents related to other people's technologies through malicious applications and conducting lawsuits or claims on this basis, with the purpose of hindering and excluding competitors and obtaining improper economic benefits or market advantages.
During the patent trial, Textron has always emphasized that DJI is a Chinese company and has been blacklisted by the United States for export control, in a vain attempt to use this information unrelated to the case to incite and exploit anti-Chinese sentiment to obtain a favorable verdict for itself.
In the process, DJI did not sit idly by, but actively fought back, filing a lawsuit against Textron in the United States, claiming that four of its patents were invalid.
In the end, the two parties reached a settlement and withdrew the lawsuit, and DJI recovered huge economic losses and maintained the dignity of Chinese companies.
One of the main purposes of United States DJI drone operation is to protect United States local drone industry.
However, United States actually has no supply chain for drones at all, and the cameras, gimbals, fuselages, and batteries needed for drones are all supplied by China. In the field of small civilian UAVs, United States actually cannot come up with alternative products that can get rid of Chinese technology.
For example, Texas has 966 drones registered with the state police, 879 of which are produced by DJI. A simple percentage calculation shows that DJI drones account for more than 90% of the Texas Police Department.
In addition to monopolizing the demand for United States police, according to statistics, DJI also occupies a monopoly position in the agricultural drone market, which is becoming more and more popular in United States.
In 2023, drones sprayed 3.7 million acres (about 1.49 million hectares) of land in 41 states in the United States, covering 50 crops. Among them, DJI drones occupy eighty percent of the market for United States agricultural drones, and most of the remaining market share has been replaced by other Chinese-made drones, with United States-made drones accounting for only a pitiful single digit.
Moreover, the United States Forest Fire Department, Coast Guard, Fire Department, Drug Enforcement Administration, etc. purchase DJI drones in large quantities every year.
Therefore, the level of UAV technology in United States cannot be compared with DJI. United States companies that have previously entered the UAV field have basically been eliminated from the market.
In order to resist Chinese-made drones, the House of Representatives of the United States Congress passed the "Countering Chinese Drones Act" in June this year, but due to many oppositions, the bill was not passed in the Senate.
Is it feasible for DJI to use legal means to protect its rights and interests? Theoretically, this is possible. Because in October this year, Hesai Technology, a Shanghai-based lidar manufacturer, used a lawsuit to finally force the Ministry of Defense to remove it from the "CMC sanctions list".
However, the United States' crackdown on China's high-tech products will not stop because it loses the lawsuit. At present, the United States Department of Defense has said that it will put Hesai back on the list on "national security" grounds. This is really a sin that is desired, and there is no excuse for it!
Therefore, we should have a clear understanding of United States' suppressive methods. No matter what means are used to counteract, the most important thing is that the iron still needs its own hardness, we need to continue to develop and expand ourselves, in the fierce competition to be independent, far ahead, in order to win the final victory in the competition.