DJI Loses Lawsuit Over Classification as Chinese Military Company
A federal judge has rejected drone maker DJI's efforts to get off a Department of Defense list of Chinese military companies, citing the widespread military use of DJI drones in conflicts like the Russia-Ukraine war.
Court Rejects DJI's Challenge
U.S. District Judge Paul Friedman ruled Friday that the Department of Defense had provided "substantial evidence" that DJI contributes "to the Chinese defense industrial base." The decision upholds DJI's placement on the DoD's list of Chinese military companies, a designation the drone maker has been fighting since 2022.
DJI argued it was "not owned or controlled by the Chinese military" and that the DoD acknowledged the company makes "consumer and commercial drones, not military drones." However, Judge Friedman focused on the actual military applications of DJI's technology rather than the company's stated policies.
Military Use Evidence Cited
The judge pointed to widespread use of modified DJI drones in the Russia-Ukraine conflict as key evidence supporting the military classification. Friedman wrote that "Whether or not DJI's policies prohibit military use is irrelevant. That does not change the fact that DJI's technology has both substantial theoretical and actual military application."
This real-world military deployment of DJI consumer drones demonstrates how civilian drone technology can be readily adapted for warfare purposes, supporting the DoD's national security concerns about the Chinese company's products.
Growing Legal Challenges for DJI
The lawsuit loss compounds DJI's regulatory troubles in the United States. The company already faces placement on similar lists by the Department of Commerce and Treasury Department, creating barriers to U.S. business operations and investment.
More significantly, DJI faces a potential ban on drone sales starting in December unless a national security agency determines its products don't "pose an unacceptable risk to the national security of the United States." The company has told Reuters it's considering its legal options following the court decision.
Business Impact and Next Steps
DJI claimed in its lawsuit that the military company listing has caused "ongoing financial and reputational harm, including lost business." The classification makes it difficult for U.S. investors to fund the company and creates uncertainty for American customers considering DJI products.
While Judge Friedman rejected some of the DoD's other rationales for the listing, the core finding about military applications was sufficient to uphold the designation. DJI's response suggests the company may continue pursuing legal remedies despite this setback in federal court.