Chinese company banned from licensing British vision technology developed by University of Manchester, for reasons of national security
The UK continues to demonstrate its commitment to protect the technology and research developed in this country from within China.
State Secretary for Business, Energy and Industrial Strategy, Kwasi Kwarteng used a national security law to prevent intellectual property, known as SCAMP-5 and SCAMP-7 (essentially robot vision technology), developed by the University of Manchester, to prevent it from being licensed to Beijing Infinite Vision Technology Co Ltd.
This move comes as the heads of the FBI and MI5 issued an unprecedented warning about China to British business leaders earlier this month.
MI5 Director General, Ken McCallum, and Christopher Wray, the FBI Director
China is concerned
Speaking in London earlier this month, Christopher Wray, the FBI director, stood next to MI5 Director General Ken McCallum, warning of long-term concerns about China’s economic espionage and hacking operations, as well as attempts by the Chinese government. to differences of opinion abroad.
The FBI’s Wray told the public that the Chinese government was “determined to steal your technology, whatever it is that drives your industry, and use it to undermine your business and dominate your market.”
It comes after years of concern about China’s activities.
Recently, a cross-party group of MPs and Lords called for a ban on widely used Hikvision and Dahua surveillance technology in the UK over human rights and surveillance concerns.
Beijing Infinite Vision Technology, meanwhile, is based in Beijing and says it specializes in “the advanced 3D rendering technologies to deliver realistic still images, animations and virtual reality for residential cultural and commercial projects.”
“The University of Manchester and the acquirer (Beijing Infinite Vision Technology) have entered into a licensing agreement that enables the acquirer to use intellectual property related to SCAMP-5 and SCAMP-7 vision detection technology to develop, test and verify, produce, use, and sell licensed products,” the government order stated:.
This was a trigger event under Section 9 of the National Security and Investment Act 2021, which came into effect January this year.
The Secretary of State considers that:
the technology set forth in the license agreement has dual-use applications; there is a possibility that the technology could be used to build defense or technological capabilities that could pose a national security risk to the UK; and those risks would arise in the transfer of the intellectual property to the Acquirer.
In essence, the UK believes that this technology could also be used in military applications, or could pose a national security risk to the UK.
“The Secretary of State believes that the final order is necessary and proportionate to mitigate the risk to national security,” the order said.
Kwasi Kwarteng confirmed the UK’s decision on Twitter.
Tonight I have issued a final injunction under the National Security and Investment Act, preventing the acquisition of intellectual property by Beijing Infinite Vision Technology Company of the University of Manchester.
— Kwasi Quarteng (@KwasiQuarteng) July 20, 2022
National safety assessments
The National Security and Investment Act 2021 gives UK authorities the ability to block or restrict business transactions on grounds of national security.
And it’s fair to say that of late the UK has started using national security laws to investigate an increasing number of deals, with foreign buyers looking to take over British technology or British companies.
Last year, the UK government ordered an in-depth national security investigation following Nvidia’s proposed purchase of ARM Holdings for $54 billion.
Nvidia’s attempt to acquire UK-based ARM finally failed in February this year.
The government is also considering a ban on the sale of Newport Wafer Fab (NWF), the UK’s largest chip maker, to Dutch chip company Nexperia.
A national security review of the deal began in May this year, and earlier this month the government postponed its decision to give it more time to investigate the Newport Wafer Fab purchase.
Meanwhile, a national security investigation is also underway into a French billionaire’s stake in telecom giant BT.
The issue started in June last year, when BT confirmed to Silicon UK that a major French telecommunications company (Altice) had bought a 12.1 percent stake in the former British telecommunications company.
The acquiring vehicle was Altice UK, which is wholly owned by Patrick Drahi – a Franco-Israeli telecom billionaire, who is also the founder and head of Altice Europe, the second largest telecom company in France.
In December 2021, Altice UK acquired a further 6 percent, increasing its total stake in BT from 12.1 percent to 18 percent.
The then British government bluntly warned all parties involved that it was monitoring the situation. It stated that it would intervene if necessary to protect BT, which has built most of the UK’s critical fiber network.
Meanwhile, BT reportedly strengthened its defense against takeovers in December by hiring the advisory group Robey Warshaw.
In May this year, the UK government confirmed a national security inquiry into Altice’s UK share of BT.