DJI Loses Lawsuit Against U.S. Department of Defense Over Inclusion in "Chinese Military-Related Companies" List—The Complex Reality of Military Use of Drone Technology

1) What Happened (Brief Summary)

On September 26, 2025, U.S. time, the federal court in Washington D.C. (Judge Paul L. Friedman) dismissed DJI's lawsuit seeking removal from the Department of Defense's (DoD) "Chinese Military Company" list. The court acknowledged that the DoD's determination that DJI "contributes to China's defense industrial base" had "reasonable grounds," thereby granting broad discretion to administrative decisions related to national defense and security. DJI expressed disappointment and is considering its legal options.Reuters

2) Key Points of the Judgment: What Was the "Decisive Factor"?

While the judge found some of the DoD's arguments, such as "DJI being directly owned and controlled by the Communist Party," insufficient, the following points were emphasized:

• Institutional support from the Chinese government (designation as a "National Enterprise Technology Center" and tax/financial incentives)

• Certain equity involvement by the state-owned enterprise, Chengtong

• Contribution to "military-civil fusion" based on dual-use (civil-military) nature
  Considering these, it was concluded that labeling as a "Chinese Military Company" is permissible within the scope of Section 1260H (criteria based on the NDAA).The Verge
  
  

3) What is the 1260H List: The Real Impact of the "Legal Label"

The 1260H list does not impose an immediate total ban, but it results in a "heavy labeling" that brings extensive disadvantages such as restrictions on U.S. government contracts and funding, avoidance of transactions by private companies, and brand damage. DJI's business in the U.S. is already facing strong headwinds, with reports of inventory shortages and distribution disruptions.The Verge

4) The December "Import and New Product" Phase: FCC Covered List and the Possibility of Automatic Activation

Alongside the ruling, attention is focused on the "end-of-year deadline" related to NDAA 2025. If security reviews by the relevant authorities are not completed by December 23, DJI (and Autel) will automatically be subject to the FCC's Covered List, effectively halting the certification and introduction of new products.While it is not a total ban at this point, the inability to introduce "new models" has an impact close to that of a market freeze.UAV CoachReuters

5) Impact on Industries and Users: Government, Municipalities, Surveying, Video Production, Disaster Response

• Public Sector (Police, Fire Departments, Municipalities): Procurement restrictions at the state and county levels may expand, potentially leading to accelerated plans for securing maintenance parts and replacing aircraft.

• Industrial Sector (Surveying, Inspection): Simultaneous occurrences of pilot shortages and equipment shortages are likely. Replacing high-performance LiDAR and thermal infrared-equipped models involves high costs and learning curves.

• Media and Video Production: While the operation of existing machines is possible for the time being, the absence of new "video-specialized machines" could lead to a competitive disadvantage in production.

• Supply Chain: Localized price surges and the influx of inferior products may occur due to customs decisions and retail order suppression.Reuters

6) Judicial Implications: More Discretion Than "Thoroughness" in Evidence Evaluation

This ruling highlights that even if the "black-and-white" proof regarding ownership structure is weak, there is significant administrative discretion in the security domain. The judge pointed out errors in some of the DoD's claims (such as confusion over industrial parks), but opened the "door" to broad discretion in labeling under the name of national security.The Verge

7) Comparative Cases: Hesai, and the "Reversal" Memory of Xiaomi

Lidar giant Hesai is also contesting a similar designation, and the disputes are continuing in succession. However, in the past, smartphone giant Xiaomi overturned the Treasury Department's investment ban designation, sothe possibility of reversal in the appeals courtcannot be completely ruled out.Reuters

8) Reactions on Social Media: How the Community Perceived It

Breaking News

• "DJI's Lawsuit Dismissed by Federal Court" (Reuters' X post spreads)X (formerly Twitter)

• Engadget also shares the headline on X.X (formerly Twitter)

Typical Voices in the Drone Enthusiast Community (Reddit)

"Na DJI is suing the DOD… Everyone knows that DJI is not (Communist Party members)"
(Original text including grammatical roughness)Reddit

"DJI sought removal from the list, but the judge supported the DoD's decision"
(News thread summary)Reddit

Overview

• Proponents (Supporters of Strengthened Regulations): Emphasizing state subsidies and military-civil fusion. "Potential security risks and unfair subsidy competition should be corrected."

• Opponents (Field Users): Concerned about operational costs and difficulty in finding alternatives. "Field operations are exhausted by political decisions without 'proof' of security."

• Middle Ground: Viewing the year-end FCC Covered List outcome as "live ammunition,"the halt of new product certification = cooling of actual demandis seen as the biggest risk.UAV Coach

9) DJI's Perspective and Future Scenarios

DJI expressed dissatisfaction, stating that "many of the DoD's claims were dismissed, yet the designation was maintained on a single basis," and is considering future legal actions. While there is a risk of appeal dismissal, there remains a slight possibility of partial correction through rehearing on the thickness of evidence and interpretation of applicable provisions. On the business front, if reviews are not completed by the end of the year, DJI is likely to strengthen its product strategy for markets outside North America, such as China and the EU, in preparation for thescenario of new model certification suspension.The VergeReuters

10) Practical Advice for Readers (For Japanese Operators and Companies)

• Short Term: The impact on domestic use of existing machines is limited. However, pay attention to the ripple effects on global inventory and prices.

• Medium Term: With potential fluctuations in international prices of accessories and maintenance parts due to U.S. developments at the end of the year, advance maintenance planning is advised.

• Long Term: Diversify risks by adopting a multi-vendor approach (DJI + non-DJI) and supporting open standards (RTK, payload, mission planning software).

• Procurement: For government and municipal projects, confirm the presence of NDAA/Blue UAS compliance requirements before bidding.

Powered by Froala Editor