Micron Gets Help From US Patent Office in China Chips Battle

The patent war between Chinese chipmaker Yangtze Memory Technologies Co. and its American rival Micron Technology Inc. has become a flashpoint in US-China tech competition over national security concerns.

US Patent and Trademark Office Director John Squires issued an order in November requiring YMTC to justify why its patent challenges against Micron should proceed given the Chinese firm’s placement on a federal blacklist. He said the state-run company’s patent challenges may run contrary to the foreign policy interests of the US.

YMTC has until Nov. 24 to respond.

Squires’ order followed a memo he sent in October to Patent Trial and Appeal Board judges, warning that entities connected to foreign governments have “covertly financed or directed” patent challenges to undermine US technology leadership. The memo requires petitioners to identify the invested parties before cases can proceed, specifically citing YMTC as an example of a sanctioned entity in the chips industry.

China’s Commerce Ministry objected to the new policies, calling them discriminatory restrictions against Chinese firms while vowing to protect their rights. The dispute comes as YMTC and Micron have launched a legal offensive against each other, affiliates or federal agencies filing at least five lawsuits this year across Texas, California and DC, while challenging each other’s patents at least 31 times since 2024.

Semiconductors have become central to US-China competition as both countries seek chips dominance, prompting Washington to deploy export controls and tariffs while Beijing pours billions into manufacturers like YMTC. The Chinese computer-memory supplier has turned to US patent-validity challenges as part of its burgeoning competition with American chipmakers, a tactic viewed by the US as a national security threat.

US chipmakers’ patents consistently end up challenged by their Chinese counterparts in the PTAB, said Alfonso Garcia Chan of Cahill Gordon & Reindel LLP. Now the Trump administration is using the PTO to defend US patents against foreign entities, Chan said.

“What you see here is a reflection of the Chinese are right on the heels of and on many respects they could be ahead of the US in designing the chips,” Chan said. Squires is punching back with policy to say, “we don’t want to disadvantage our companies as much.”

Micron and YMTC didn’t respond to requests for comment.

Sham Marketing

The Biden Administration placed YMTC on the Department of Commerce’s Entity List in 2022, the same year that a policy group, China Tech Threat, called the company a “significant risk” to US national security or foreign policy interests.

YMTC later accused the blog, its parent company, and Micron of a “sham marketing” campaign designed to destroy its competition.

Meantime, YMTC has sought to benefit from a US patent system that’s become more receptive to validity challenges, said Chan. Until recently, courts were less sympathetic to patent owner’s rights, he said.

“This is not the first time that the Chinese manufacturers have gone after US companies in literally our backyard, our own courts,” Chan said. “They see it as an advantageous compared to in China.”

US courts are also better venues for receiving large damages,because China’s patent system can issue injunctions and resolve cases quickly, but doesn’t have experience issuing large awards.

Seen This Before

YMTC has hundreds of patents and filed an infringement suit against Micron in October. The Chinese firm convinced the Federal Circuit not to overturn a California judge’s order allowing it to review Micron’s source code in an earlier suit.

Richard S.J. Hung of Morrison & Foerster LLP said international patent disputes often emerge when foreign companies challenge established domestic competitors.

“We saw this with the rise of Japan Inc. in the 1990s and the South Korean chaebols in the 2000s,” Hung said in an email. “We see it now with the rise of Chinese state-promoted and state-owned enterprises.”

After decades of ebbs and flows in US-China relations, the first Trump administration became more adversarial with China, said Tom Kellogg, executive director of Georgetown Law’s Center for Asian Law. They now fit a “tit for tat” pattern, including the enactment of high tariffs and the pulling access to rare earths, he said.

“Some of the moves that the US makes to limit its access to the most advanced chips and to various AI technologies, that is considered a national security concern on the Chinese side,” Kellogg said.

The Threat

National security had been a focus for the PTO even before the current administration. The Invention Secrecy Act and other procedures allowed the agency to keep certain patent applications confidential to protect national security.

Squires and acting Director Coke Morgan Stewart before him moved to centralize inter partes review decisions. They also expanded the discretionary factors used to deny petitions without reaching the merits, including “compelling economic, public health or national security interests.”

That national security factor is important for foreign state-owned enterprises, which must now explain to Squires why their challenges should be instituted, Chan said. YMTC will have to address national security concerns and show how a review serves US interests.

“It’s going to be a challenge for Yangtze Memory Technologies because they are directly challenging Micron, which is the leader in memory in the United States,” Chan said.

Micron has taken steps to compete against YMTC with investments and its own litigation. Micron announced in August 2022 its plans to invest $40 billion by 2030 to build its US operations. The company alleged in an October suit that YMTC hired its former engineers and has actively worked to invalidate inventions among its more than 54,000 patents.

“There’s a significant national security interest in having a domestic US memory manufacturer, and Yangtze is directly challenging that ability from Micron with things like IPRs,” Chan said.