UK Blocks China Licensing Sensor Tech From Manchester University

Tom Jowitt,

Chinese firm blocked from licensing British vision technology developed by Manchester University, under national security grounds

The United Kingdom continues to demonstrate its intent to protect technology and research developed in this country, from China.

Secretary of State 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 tech) developed by the University of Manchester, to block it being licensed to Beijing Infinite Vision Technology Co Ltd.

The move comes the heads of the FBI and MI5 earlier this month issued an unprecedented warning about China to UK business leaders.

MI5 director general, Ken McCallum, and Christopher Wray, the FBI director

China concerns

Speaking in London earlier this month, Christopher Wray, the FBI director, stood alongside the MI5 director general, Ken McCallum, and they warned about long-standing concerns about economic espionage and hacking operations by China, as well as the Chinese government’s efforts to stifle dissent abroad.

FBI’s Wray told the audience the Chinese government was “set on stealing your technology, whatever it is that makes your industry tick, and using it to undercut 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 ban on widely used Hikvision and Dahua surveillance tech in UK over human rights and surveillance concerns.

Beijing Infinite Vision Technology meanwhile is based in Beijing, and says it specialises in “the cutting-edge 3D rendering technologies to deliver realistic still image, animation and virtual reality for residential cultural and commercial projects.”

Government order

“The University of Manchester and the Acquirer (Beijing Infinite Vision Technology) have entered into a licence agreement that enables the Acquirer to use intellectual property relating to SCAMP-5 and SCAMP-7 vision sensing technology to develop, test and verify, manufacture, use, and sell licenced products,” the government order stated.

This constituted a trigger event under section 9 of the National Security and Investment Act 2021, which came into force January this year.

The Secretary of State considers that:

  • the technology set out in the licence agreement has dual-use applications;
  • there is potential that the technology could be used to build defence or technological capabilities which may present national security risk to the United Kingdom; and
  • those risks would arise on the transfer of the intellectual property to the Acquirer.

Essentially the UK believes this technology could also be used in military applications, or may present a national security risk to the United Kingdom.

“The Secretary of State considers that the final order is necessary and proportionate to mitigate the risk to national security,” the order stated.

Kwasi Kwarteng confirmed the UK’s decision on Twitter.

National security reviews

The National Security and Investment Act 2021 gives UK authorities the ability to block or limit corporate transactions on national security grounds.

And it is fair to say the UK has begun using national security laws to examine an increasing number of deals of late, where foreign buyers seek to acquire British tech or British companies.

Last year the UK government ordered an in-depth national security investigation, over Nvidia’s proposed $54 billion purchase of ARM Holdings.

Nvidia’s attempt to acquire UK-based ARM eventually collapsed in February this year.

The government is also considering a block on the sale of Newport Wafer Fab (NWF), the UK’s largest largest chip producer, to Dutch chip firm Nexperia.

In May this year a national security review of the deal began, and earlier this month the government delayed its decision, to allow it more time to scrutinise the Newport Wafer Fab purchase.

Meanwhile a national security investigation of a French billionaire’s stake in telecoms giant BT is also underway.

The issue began in June last year, when BT confirmed to Silicon UK that a major French telecoms firm (Altice) had purchased a 12.1 percent stake in the former British telecoms incumbent.

The acquiring vehicle was Altice UK, which is wholly owned by Patrick Drahi – a French-Israeli telecoms billionaire, who is also the founder and head of Altice Europe, the second largest telecoms firm in France.

In December 2021 Altice UK acquired another 6 percent, raising its total BT stake from 12.1 percent to 18 percent.

The UK government at the time bluntly warned all parties involved that it was monitoring the situation. It stated it would intervene if necessary to protect BT, which has built most of the UK’s critical fibre network.

BT meanwhile reportedly bolstered its takeover defences in December by hiring boutique advisory group Robey Warshaw.

In May this year the UK government confirmed a national security review into Altice UK stake in BT.