Despite a judge siding with DJI on nearly everything, the Pentagon designation stands – which means DJI is now headed to the appeals court.

In short, the Department of Defense (DoD) put DJI on a list calling them a “Chinese Military Company.” DJI says that’s not true, so it’s taking the government to court. News broke this week that DJI is filing an appeal with the the United States Court of Appeals for the D.C. Circuit. That challenges a lower court’s decision that upheld the DoD’s controversial designation of the drone manufacturer as a “Chinese Military Company” – even though the court rejected most of the Pentagon’s core allegations against the company.

The District of Columbia District Court ruling in DJI v. U.S. Department of Defense presents a mixed outcome for the world’s largest consumer drone manufacturer. While the designation itself remains in place, the court found no evidence supporting the DoD’s central claims that DJI is owned by, controlled by or affiliated with the Chinese government or military.

According to court documents, the judge dismissed allegations that DJI has ties to the Chinese Communist Party, connections to China’s Ministry of Industry and Information Technology or links to any military-civil fusion enterprise zone.

The court upheld only two narrow findings as not “arbitrary and capricious,” which are:

National Enterprise Technology Center Status: DJI holds NETC recognition, which China grants to companies with “industry-leading technological innovation capabilities.” This status is widely awarded across multiple industries, including to major U.S. companies in food, apparel and automotive sectors. The court found this insufficient to demonstrate military connections.

Dual-Use Technology: The court acknowledged that DJI products have “substantial dual-use applications” – a characteristic shared by countless commercial off-the-shelf technologies that could theoretically be repurposed for military use. This finding does not indicate actual Chinese military use of DJI products.

“We respect the Court’s process but are disappointed that the designation remains in place despite findings that reject the core of the DoD’s allegations,” said Adam Welsh, spokesperson for DJI, in a prepared statement. “We will continue to defend the integrity of our company as the findings reaffirm what we have maintained all along — that DJI operates independently, has no government or military affiliation, and is committed to the responsible development of drone technology.”

The “Chinese Military Company” designation, originally imposed under Section 1260H of the National Defense Authorization Act, has significant implications for DJI’s business operations in the United States, despite the company maintaining no military contracts or products.

DJI has consistently positioned itself as an opponent of military use of its technology. The company claims that it was the first drone manufacturer to publicly denounce combat use of its products and has implemented policies explicitly prohibiting such applications. For example, DJI issued a statement in April 2022 that it would suspend all its business activities in both Russian and Ukraine, clearly a move to distance itself from the war. (To be clear, drones are heavily used in the Russo-Ukrainian War, though the drones have not been acquired directly through DJI, but rather independently purchased or even home-built).

Additionally, DJI maintains it has never manufactured military equipment or marketed drones for combat purposes.

The appeal to the D.C. Circuit Court represents DJI’s continued legal battle to clear its name in the U.S. market, where the company faces increasing regulatory scrutiny despite dominating both the consumer and commercial drone sectors globally.

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