US Lawmakers Broaden China Tech Blacklist Amid Patent Spat
China's technology sector faces renewed pressure in the United States. Lawmakers there are seeking to broaden the scope of products subject to a trade blacklist. Concurrently, Lenovo Group has become involved in a patent dispute concerning memory devices.
The Communications and Technology Transparency Act, presented by the US House Energy and Commerce Committee, seeks to expand the Federal Communications Commission's (FCC) Covered List. This change would shift the category from "communications equipment or service" to the wider "information and communications technology or service" (ICTS). Products on this list are legally prohibited from import, marketing, or sale as new items within the US.
The FCC previously restricted several Chinese made items, including drones and robots, under its framework for designated "foreign adversaries." And separately, the US International Trade Commission announced a Section 337 investigation into specific DDR5 memory modules and their associated products. These include servers, computing systems, and storage systems. This action followed a patent infringement complaint lodged by Netlist, a company based in California.
A Section 337 investigation represents a significant legal instrument in the US for managing intellectual property disputes. Such an investigation can result in a product's complete exclusion from the American market. Lenovo, along with Micron Technology, Hewlett Packard Enterprise, and Super Micro Computer, were identified as respondents in this investigation. Netlist seeks a limited exclusion order and cease and desist orders over the alleged infringement.
The proposed US bill, introduced by congressmen Frank Pallone and Brett Guthrie, also seeks to streamline the process for barring products from the market. It also aims to clarify what constitutes malicious technology or equipment. The legislation mandates that the Covered List be updated at least once every six months, a change from the existing stipulation for "periodically update."
Dai Menghao, a partner with offices in Shanghai and Beijing at the law firm King & Wood, specialises in export controls and sanctions. But he stated that the proposed legislation intends to render enforcement of the FCC Covered List more systematic and precise. He suggested the bipartisan proposal's timing carried symbolic weight before the US midterm elections in November.
The bill also emerges amidst a meeting between US President Donald Trump and Chinese President Xi Jinping, where trade and technology tensions form part of the wider context. The proposal followed less than two weeks after the FCC finalised updates to its equipment authorisation rules. These updates tightened restrictions on devices containing certain hardware components made by entities already on the Covered List, yet did not target optical transceivers.
This FCC decision had eased market concerns. According to a report by Reuters in Aug., Washington had been considering measures to block new Chinese optical transceiver models. However, the new bill could potentially bring those products back into consideration. Optical transceivers, which employ photonic technology to convert electrical and optical signals, see widespread application in data centres.
Under US Commerce Department regulations cited in the bill, ICTS encompasses products for processing, storage, retrieval, or communication of information or data via electronic means, including photonic technologies. So a broader definition would not automatically subject all Chinese made ICTS products to restrictions. Equipment or services would still need to be supplied by an entity controlled by a US designated "foreign adversary." This category currently comprises China, Russia, Iran, and North Korea.
According to the South China Morning Post, Huawei Technologies, ZTE, Hikvision, Dahua Technology, and Hytera were among the initial Chinese companies placed on the Covered List when it was established in 2021.
US lawmakers propose expanding the FCC's Covered List to include a broader range of "information and communications technology or service" products.
This expansion would prohibit the import, marketing, and sale of new products on the list in the US.
Lenovo Group, Micron Technology, Hewlett Packard Enterprise, and Super Micro Computer are respondents in a patent infringement investigation by Netlist.
The proposed bill aims to streamline product barring processes and clarify criteria for "malicious technology."
The bill also requires the Covered List to be updated every six months, and coincides with a meeting between the US and Chinese Presidents.
Source: SCMP
