Government prevents Manchester University from licencing vision sensing technology to Chinese firm

This is the first time that the Government has used National Security and Investment Act to block a foreign deal

The Government has prohibited the University of Manchester from granting a Chinese firm a licence for its vision-sensing technology.

Kwasi Kwarteng, Secretary of State for Business, Energy, and Industrial Strategy, announced on Wednesday that he had issued a final order, blocking Manchester University from transferring intellectual property (IP) related to the Scamp-5 and Scamp-7 vision sensing technologies to Beijing Infinite Vision Technology Company Ltd.

The decision was made under the National Security and Investment Act 2021.

The Chinese firm would have been able to develop, test, produce, use and sell licenced products had it acquired the IP.

The technology may be employed in cameras, drones, and other surveillance devices in addition to 3D renderings. It allows cameras to process large numbers of photos more quickly.

According to the university's website, Scamp-5 and Scamp-7 vision sensors perform their own computations instead of outputting raw images, delivering "high-speed and low-power consumption" to support new embedded-vision applications in areas such as virtual reality, robotics, automotive, toys and surveillance.

"There is a potential that the technology could be used to build defence or technological capabilities, which may present a national security risk to the United Kingdom," Kwarteng said in the final order.

"Those risks would arise on the transfer of the intellectual property to the acquirer."

Beijing Infinite Vision Technology creates 3D rendering software used in animation, multimedia displays, and architectural design.

Manchester University said it has extensive internal processes in place to examine proposed overseas deals.

"These were followed in this case and, in line with the legislation, we voluntarily referred this agreement to the UK government."

The university said that it would follow the decision made by the Government.

This is the first time that the National Security and Investment (NSI) Act has been used to prohibit a foreign deal in the UK.

The Act, which came into effect in January, gives the Government extensive powers to extensive authority to block deals that could harm national security.

With 17 critical areas covered, the law is one of the most far-reaching in the world. As of the end of March, 17 deals had been called in under the newly enacted law, according to the Department for Business, Energy, and Industrial Strategy. Fourteen of them were still waiting for a final judgement, while three had received the Government's approval.

British lawmakers' have expressed growing concerns in recent months over technology partnerships with Chinese firms.

Earlier this year, Kwarteng ordered an investigation into the acquisition of Newport Wafer Fab, the biggest semiconductor manufacturing facility in the UK, by the Chinese firm Nexperia, on national security grounds.

Given that NWF has several contracts with the UK Government, including for defence-related projects, any potential acquisition is very sensitive.

The review might result in the Government blocking the deal, demanding corrections, or approving it.

Lawmakers have criticised the Government for being sluggish to take action on the NWF sale, especially at a time when other countries are developing their domestic semiconductor capabilities amidst the global chip shortage.

Boris Johnson said last year he did not want anti-China sentiments to push Chinese investment away from the UK.