US bans exports to Chinese firm amid IP litigation
The US Department of Commerce (DoC) today implemented an export ban against Fujian Jinhua Integrated Circuit Company, a Chinese manufacturer of integrated circuits, due to national security concerns.
In an announcement made yesterday, October 29, the DoC said Jinhua has nearly completed additional production capacity for dynamic random access memory (DRAM) integrated circuits that probably originates from US technology. The production threatens the long-term economic viability of domestic suppliers of what are essential components of US military systems, the DoC added.
The move comes amid a patent dispute between Jinhua and US semiconductor company Micron Technology, as well as a wider trade dispute between the US and China.
By being placed on the Entity List of the Export Administration Regulations (EAR), Jinhua is now seen as being a threat to US security or foreign policy. A licence will be required for all exports, but such licence applications will be reviewed with a presumption of denial, the DoC said.
“When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security,” Secretary of Commerce Wilbur Ross said. “Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems.”
In December 2017, Micron Technology sued Jinhua and Taiwan-based United Microelectronics Corporation (UMC) at the US District Court for the Northern District of California. The semiconductor company claimed that UMC stole Micron’s trade secrets covering DRAM technology and gave them to Jinhua.
According to Micron’s lawsuit in California, the DRAM integrated circuits industry has more than $50 billion in annual revenues worldwide.
In July, Micron reported that the Fuzhou Intermediate People's Court, Fujian Province, China, had granted a preliminary injunction against two Chinese Micron subsidiaries in patent infringement cases filed by UMC and Jinhua. The injunction stopped the manufacture, sale and import of certain DRAM modules in China.
The companies filed the patent infringement claims against Micron in retaliation for criminal indictments brought by Taiwan authorities against UMC and three of its employees, and the civil lawsuit filed in California, the statement added.
The DoC’s move is just the latest in a diplomatic spat between the US and China, which dates to at least August 2017 when the Office of the US Trade Representative launched an investigation into China’s tech transfer and IP practices.
Just last month, the US Department of Justice unsealed charges against a Chinese Ministry of State Security operative for economic espionage and stealing trade secrets from US aviation companies.
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