Federal Court Dismisses YMTC Lawsuit Against Micron Over Spyware Allegations

A federal court has dismissed a lawsuit filed by Chinese chipmaker Yangtze Memory Technologies Co. (YMTC) against Micron Technology, determining that allegations regarding YMTC’s memory chips containing "spyware" were classified as political speech rather than commercial false advertising. The ruling was issued by US District Judge Carl Nichols on August 14, concluding a legal battle that began when YMTC filed suit in June 2025. The central issue was whether a competitor's claim that a product poses a national security threat constitutes a business attack or a political opinion. Judge Nichols ruled in favor of the latter.

YMTC's lawsuit targeted both Micron and DCI Group, a public affairs firm, alleging violations of the federal Lanham Act, which prohibits false advertising and unfair competition. The dispute centered on claims made through the China Tech Threat website between 2021 and 2022, which linked YMTC’s technology to military espionage and criminal activities—claims that YMTC has strongly denied.

The company asserted that the campaign caused significant financial harm, claiming millions in losses due to reputational damage and disrupted business relationships with electronics manufacturers both in the US and internationally. Micron countered that the lawsuit was an attempt to suppress legitimate political advocacy, asserting its right to free speech.

The Lanham Act is typically used by companies to address false claims made by competitors in the marketplace, but it only applies to commercial speech. Political commentary, policy advocacy, and public debate about national security are not covered under this statute. Judge Nichols concluded that the statements regarding YMTC's chips were part of a broader political discussion concerning Chinese technology firms and US national security, without ruling on the truth of the claims.

This lawsuit is part of a larger context, as YMTC and Micron have been engaged in patent disputes since November 2023, when YMTC accused Micron of infringing on its 3D NAND flash memory patents. These legal proceedings are ongoing and are expected to extend into 2025 and 2026.

YMTC was added to the US Entity List in late 2022, which imposed restrictions on its access to technology and altered the competitive landscape for memory chip manufacturers on both sides of the Pacific. The court's ruling establishes that framing a competitor's products as national security threats, when communicated through advocacy rather than direct advertising, is protected political speech.

For Micron, this dismissal alleviates legal uncertainties and affirms its ability to participate in discussions regarding semiconductor supply chain security. However, the ongoing patent infringement claims from YMTC regarding 3D NAND flash memory indicate that the legal challenges between the two companies are far from resolved.