US DOJ files action requiring divestiture by Chinese Company of U.S. Company

The U.S. Department of Justice has filed a complaint against China based Suirui Group’s acquisition of California’s Jupiter Systems based on national security concerns.  According to the press release, this is the first time an action like this has been filed. The Press Release states: 

Yesterday, the United States filed a complaint under section 721 of the Defense Production Act of 1950 to enforce a presidential order prohibiting Suirui Group’s acquisition, through Suirui International, of California-based Jupiter Systems and compelling Suirui to divest from Jupiter Systems. On July 8, 2025, the President issued the Order based on his findings that the transaction “threatens to impair the national security of the United States.” This is the first such action ever filed in federal district court.

While foreign direct investment is important to the United States’ economy, foreign investment in certain companies and certain industries, particularly those involved in defense or critical infrastructure, can pose national security concerns. To address these concerns, the President has the authority to take such action for such time as the President considers appropriate to suspend or prohibit such a transaction that threatens to impair the national security of the United States. The Committee on Foreign Investment in the United States (CFIUS) is empowered to review and investigate such transactions.

According to the Complaint, in 2020, Suirui Group, a Chinese company, through its Hong Kong subsidiary Suirui International, acquired all of Jupiter Systems, which provides video communications hardware and software to commercial and U.S. Government customers. On July 8, 2025, the President issued an Order prohibiting the transaction and, among other things, requiring Suirui to divest all its interests in Jupiter Systems within 120 days. According to the Complaint, despite CFIUS granting two extensions of the divestment deadline, to Feb. 3, Suirui and Jupiter Systems have failed to comply with the Order. The United States thus filed this action to protect the country’s national security interests.

The Justice Department’s Civil Division, Federal Programs Branch is handling the matter.  The case is captioned United States v. Suirui Group Co., Ltd., et al., No. 26-cv-00369 (D.D.C.). . . .

Will the US Government, California and Health Insurers Produce Treatments for Covid-19 for the World?

Neil Wilkof wrote on the IPKat blog today that the Israeli government has essentially issued permits under Israeli law to import generic versions of a drug into Israel for the purpose of treating Covid-19 infected patients despite patents covering that drug in Israel.  Neil notes that there is a dwindling supply of the drug and that the Israeli government is acting quickly to acquire supply.  

Notably, one issue that exists is the production of useful treatments for coronavirus.  Prior to the pandemic, there was already a concern with the lack of production of many generic drugs.  The State of California as well as health insurers are looking into manufacturing generics.  Moreover, the U.S. Congress has legislation before it concerning the federal government’s ability to have generics manufactured on its behalf or to manufacture those generics itself. (Here's a nice list of the US FDA's actions concerning the virus.) Additionally, on Tuesday of this week, President Trump invoked the Defense Production Act.  This Act apparently allows the federal government to direct, to an extent, private industry concerning the production and pricing of items necessary for national defense, in part.  It will be interesting to see if President Trump uses this power to push the manufacture of treatments for coronavirus for the United States, and hopefully, the world, and if California and Congress move fast to produce and incentivize more potential treatments. (If they did, this could lead to the development of much stronger US based generic manufacturing.)