Chinese genetic firm Novogene sues US over military designation

By Reuters News17 hours ago Updated

By David Shepardson

WASHINGTON, Nov 4 (Reuters) - Chinese genetic sequencing firm Novogene 688315.SS sued the Pentagon late Tuesday in US District Court in Washington over its inclusion on a US list of companies allegedly ‌aiding Beijing's military.

In June, the Defense Department added Novogene, Chinese e-commerce giant Alibaba 9988.HK, internet search provider Baidu 9888.HK and automakers BYD 002594.SZ and NIO 9866.HK and others to its list of "Chinese military companies" that prohibits the Defense Department from contracting directly with the firms.

Novogene noted its US unit employs about 180 people at its Sacramento office and at sequencing centers in Sacramento,

California, and Beaverton, Oregon. "Novogene does not design, develop, or market products for military use," the company's lawsuit said. The company called the designation unlawful and said it has resulted in "serious, irreparable, and unwarranted economic, reputational, and other harm."

The Pentagon did not immediately respond to a request for comment.

The designation does not impose formal sanctions but starting in 2027 restricts purchases of their products or services by the Pentagon through third parties.

A number of Chinese firms have sued the Pentagon over the designations. Last week, a US judge granted Alibaba Group Holding's request for a preliminary injunction, ordering the US government not to deny Pentagon contracts after the company sued over its designation.

Last month, two subsidiaries of BYD sued the Pentagon over a federal law banning any Pentagon contractors from hiring lobbyists that also work with blacklisted firms, arguing that it breached BYD's First Amendment rights.

In August, DJI, the world's largest drone maker, appealed its inclusion on the blacklist with the court finding ⁠merit in its argument that unclassified records did not support the conclusion that the company contributed to the Chinese defense industrial base.

The appeals court ordered the lower court to reconsider its decision to reject DJI's bid to be removed from the ⁠Pentagon list and the case is ongoing. In August, biotech firm WuXi AppTec Co 603259.SS also won a preliminary injunction from a US federal court, which blocked its inclusion on the list. WuXi said the Pentagon designation was politically motivated.