Novogene, US subsidiary sue Pentagon over military-ties listing

Chinese gene sequencing company Novogene and its US subsidiary have sued the US Department of Defense, seeking for removal from a list of companies the Pentagon says have ties to China's military.

The companies filed the lawsuit on Nov 3 in the US District Court for the District of Columbia. They said the Pentagon gave them no advance notice or chance to respond before adding Novogene to the list on June 8, Singapore's Lianhe Zaobao reported.

In its June notice, the Pentagon alleged that China's State-owned assets regulator indirectly owned Novogene and that the company had indirect ties to the Ministry of Industry and Information Technology and the People's Liberation Army.

The Shanghai-listed company disputed the claims. "Novogene is an independent, publicly listed enterprise with no state ownership or control," it said in a June statement. The company also denied any military affiliation and said it had contacted US authorities to seek its removal from the list.

Novogene said the designation had harmed its business and reputation. Its US subsidiary employs about 180 people and operates sequencing centers in Sacramento, California, and Beaverton, Oregon, Reuters reported, citing the lawsuit.

The companies argued that the Pentagon lacked sufficient evidence to back its decision and had violated the US Administrative Procedure Act and their right to due process under the Fifth Amendment. They asked the court to set aside the designation, bar the government from enforcing it and award them legal fees and costs, Lianhe Zaobao reported.

US law generally bars the Pentagon from awarding or renewing contracts with companies on the list. From June 30, 2027, the restrictions will also apply to certain goods and services the Pentagon buys from those companies through third parties.

WuXi AppTec, another Chinese biotechnology company added to the list in June, secured a preliminary injunction in August, blocking the US Defense Department from enforcing its designation as a Chinese military company under Section 1260H while litigation continued.