The world’s largest commercial drone manufacturer is taking on the Defense Department in a courtroom “Clash of the Titans” over a 2022 decision to put Shenzhen DJI Innovation Technology Co. — better known as DJI — on the Pentagon’s list of restricted companies that have links to China’s military and its Communist government.

On Oct. 18, DJI filed a federal lawsuit in the U.S. District Court for District of Columbia to have the designation overturned, insisting their company is neither owned nor controlled by the Chinese military and builds drones only for the consumer and commercial market.

The Guangdong company claims an eye-popping 90% of the global consumer market — and more than three-fourths of the U.S. commercial drone market — and is widely used by U.S. police departments, first responders and corporate clients.

“After attempting to engage with the [Defense Department] for more than 16 months, DJI determined it had no alternative other than to seek relief in federal court,” DJI officials said Tuesday in a statement to The Washington Times. “DJI is not owned or controlled by the Chinese military, and the [Defense Department] itself acknowledges that DJI makes consumer and commercial drones, not military drones.”

On Tuesday, Maj. Gen. Pat Ryder, a Pentagon spokesman, said he was aware of the DJI lawsuit but couldn’t comment on ongoing litigation.

The question of how to deal with Chinese tech and manufacturing exporters has proven difficult for the U.S. government to address. Critics say Chinese-owned companies such as DJI and TikTok under Chinese security laws must cooperate with the Communist authorities in Beijing and thus should be considered effectively an arm of the government.

A number of top Chinese companies are already on the list for suspected ties to China’s military, including the memory chip maker YMTC and CNOOC, China’s third-largest energy company. The Commerce Department said in September it has begun seeking public comments on whether to impose restrictions on Chinese-built drones that would effectively ban them in the U.S.

The Biden administration added DJI to its list of restricted Chinese government-controlled companies at the end of January. DJI representatives said the Pentagon responded to attempts to address their concerns only after the legal challenge was announced. The Defense Department provided the company with a copy of a November 2023 internal report detailing why DJI was added to the list.

In its lawsuit, the company said the Pentagon report “contains a scattershot set of claims that are wholly inadequate to support DJI’s designation. Among numerous deficiencies, the report applies the wrong legal standard, confuses individuals with common Chinese names, and relies on stale alleged facts and attenuated connections that fall far short of demonstrating that DJI is a ’Chinese Military Company.’”

The Pentagon restriction is only one of the headaches facing DJI in the U.S. market. In September, the House of Representatives voted to bar any of the company’s new drones from operating in the United States, sparking a flood of complaints from American farm, manufacturing and other groups saying an outright ban could cripple many of their operations given DJI’s dominance of the market.

“For years, the U.S. government has known that DJI presents unacceptable economic and national security risks, but no one was willing to take the necessary steps to remove Communist Chinese spy drones from our skies,” Rep. Elise Stefanik, New York Republican, said in a statement after the House passed her Countering CCP Drones Act. “It is strategically irresponsible to allow Communist China to be our drone factory,” Ms. Stefanik said.

The measure faces an uncertain future in the Senate.

DJI has enlisted some high-powered D.C. legal talent in its lawsuit. The company is being represented in court by Loretta Lynch, who served as attorney general during the Obama administration. Ms. Stefanik accused Ms. Lynch of turning her back on her own country and “selling out” to Communist China.

“Not only is her lawsuit full of factual errors, it is also an obvious effort by DJI to distract from [the U.S. Customs and Border Protection’s] recent halting of DJI imports due to Uyghur slave labor concerns and a futile attempt to disrupt the momentum behind my unanimously-passed Countering CCP Drones Act,” Ms. Stefanik said. “DJI’s time in the United States is rightfully coming to an end and Loretta Lynch’s sham lawsuit is not going to save them.”

The company’s dominance of the drone market isn’t in dispute. According to the research firm Drone Industry Insights, DJI manufactures 76.8% of all the drones in the U.S. Their next biggest competitor is Intel with 3.7% of the U.S. market.

But DJI said the Pentagon’s decision to add the company to the list of businesses controlled by the Beijing government unfairly tarred it as a national security threat and caused “significant and ongoing harm to the company.”

“Some customers canceled contracts to purchase DJI products, while many more expressed concern about further business dealings with the company,” the company said in the lawsuit. “The designation stigmatized the company and its employees, including the over 150 employees working in the United States.”

The lawsuit acknowledges that the company’s drones are used by both hobbyists and public safety agencies. DJI insists it doesn’t design its products with an eye toward the military market nor permit them to be used for combat operations.

However, some international customers apparently didn’t get that message. In May, Ukraine’s Ministry of Defense announced they had purchased 4,200 DJI Mavic 3 drones for about $26.5 million. 

“Drones have evolved into an essential component of modern warfare. They strengthen our defense capabilities, increasing military operations’ effectiveness. Therefore, the procurement of drones is one of the main tasks of the Ministry of Defense,” Deputy Defense Minister Dmytro Klimenkov said after the deal was made. “Our troops must be provided with everything necessary in a timely manner to have the ability to respond to any threats from the enemy.”

The explosive growth of the drone industry in the U.S. and around the world has caused problems for military base security for several years. Officials at Langley Air Force Base near Norfolk, Va. are in the market for special anti-drone nets to protect their tactical aircraft - including F-22 Raptor stealth fighters — from prying surveillance eyes in the sky.

Pentagon officials said the base had been targeted by swarms of uncrewed aerial systems, including a period of two weeks in December 2023 when a dozen or more drones regularly overflew the airfield.

“They didn’t appear to exhibit any hostile intent [but] it’s something that we have kept our eyes on,” Defense Department spokeswoman Sabrina Singh told reporters.

Military officials say there’s not much they can do to curb private drone use. U.S. law doesn’t allow the military to shoot down drones near a base like Langley unless they pose an imminent threat. The government is also wary of using electronic means to disable drones for fear it could interfere with commercial air traffic or emergency services communications.

Sen. Jerry Moran, a Kansas Republican, said the reports of unidentified aircraft hovering over a U.S. military base for more than two weeks was not just concerning but “an affront to our national security.”

“As drone technology continues to evolve, the tactics used against the United States grow more alarming each day. This violation of our airspace highlights the threat of below-the-threshold activity that hostile actors can pose to our nation,” Sen. Moran said in a statement. “I am working on legislation to provide the Department of Defense with the necessary authorities to engage drones or unidentified aircraft that breach our military airspace before it is too late to respond.”

• Mike Glenn can be reached at mglenn@washingtontimes.com.