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DJI, the company that makes roughly every other commercial drone sold in the US, is locked in a legal battle over whether the Pentagon can label it a Chinese military company. A federal appeals court is now reviewing that designation.
The D.C. Circuit heard oral arguments on February 6, 2026, after DJI appealed a lower court’s ruling from September 2025. As of April 2026, the appeal remains unresolved.
How DJI ended up on the Pentagon’s list
The Department of Defense added DJI to its Section 1260H list in a January 2024 update. That list is essentially a roster of companies the Pentagon considers to be Chinese military companies, and landing on it carries real consequences: it discourages US government agencies and contractors from doing business with the named firms.
DJI challenged the designation in court, arguing it has no ties to China’s military apparatus. The company has consistently denied being owned or controlled by the Chinese Communist Party.
On September 26, 2025, US District Judge Paul Friedman delivered a split decision. He upheld DJI’s placement on the list, but rejected most of the DoD’s supporting allegations. The court found that the Pentagon had presented “substantial evidence” linking DJI to China’s defense capabilities, primarily through two arguments: the company’s status as a National Enterprise Technology Center (NETC) and the dual-use potential of its products.
But the court also found the evidence lacking on some of the bigger claims. Judge Friedman determined there was insufficient proof that DJI is actually owned or controlled by the CCP, or that the company has direct ties to China’s military.
The appeal and what’s at stake
DJI filed its appeal with the D.C. Circuit around October 14, 2025. The central question before the appellate court is whether the remaining evidence, primarily the NETC designation and dual-use concerns, is enough to justify keeping DJI on the list after the other allegations were dismissed.
DJI commands over 50% of US commercial drone sales. Its products are used by everyone from filmmakers and farmers to first responders and construction crews. The Section 1260H designation doesn’t technically ban DJI products, but it creates a chilling effect: federal agencies steer clear, defense contractors avoid the brand, and the stigma bleeds into the broader market.
A broader regulatory question
The case also matters well beyond the drone aisle. The Section 1260H list has become one of Washington’s go-to tools for pressuring Chinese tech companies, sitting alongside export controls, entity list designations, and investment restrictions.
How the D.C. Circuit rules will signal something important about the evidentiary bar the Pentagon needs to clear when designating companies. If the court decides that NETC status and dual-use potential are sufficient, the DoD effectively gets a broad mandate to flag any Chinese company whose products could conceivably serve military purposes. If the court demands more direct evidence of military ties, ownership, or control, it narrows the Pentagon’s reach and gives future designees a clearer path to challenge their listings.
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English (US) ·