Two B.C. companies ordered to shut down on national security grounds | Hacker News Reader

Two B.C. companies ordered to shut down on national security grounds

vancouversun.com

101 pointsJumpCrisscross78 comments

Here's more useful background. Back in 2018, SkyCope, which makes drone detection and jamming devices, won an injunction against one of their founders who split off to found a competing company.[1] Later, two competing companies. He also founded Pegauni.[2] This seems to be a follow-on of that dispute.

Back in 2018, small drones were not much of a national security issue. Now, they are.

[1] https://vancouversun.com/news/local-news/vancouver-anti-dron...

[2] https://web.archive.org/web/20240202225640/https://pegauni.c...

They're not very subtle about what they are doing,

https://web.archive.org/web/20240105144551/https://pegauni.c... ("Customers")

- "Military/National Security Projects"

- "Macau Battleship"

- "Chinese National Parade"

- "Chinese Air Craft Carrier (No Pictures due to security reasons)"

- "National Security Beijing"

- "Military Base Security"

That background leaves out the fact that Skycope itself is literally owned by a (different) Chinese company, so I doubt this is a follow-on of that in any straightforward sense.

> [188] Skycope submits that it and its parent companies have suffered detriment by being forced into extensive litigation in China and that Bluvec and Lizheng’s entry into the market has harmed Skycope and Shengkong’s market position in China. ...

> [222] ... Similarly, there is no evidence that Skycope (including its parent, Shengkong) operates outside of Canada and China.

https://www.canlii.org/en/bc/bcsc/doc/2023/2023bcsc1288/2023...

I would like to know what gives the federal government power to do this -- and whether a court of law got involved.

When Stephen Harper tried to revoke citizenship without judicial oversight we have sacked him. I am not quite sure how I feel about this if a court was not involved but I can't find the source. I at least would feel rather uneasy if the gov could just say "this company shouldn't exist".

Edit: ah. Found it. https://www.canada.ca/en/innovation-science-economic-develop...

> In accordance with the Investment Canada Act, foreign investments are subject to review for national security concerns.

I guess that's ... okay. I would still have much more liked a court in the middle but I guess since this is specifically a foreign investment this is ok. The very act https://laws-lois.justice.gc.ca/eng/acts/i-21.8/FullText.htm... begins with:

> Recognizing that increased capital and technology benefits Canada, and recognizing the importance of protecting national security, the purposes of this Act are to provide for the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada and to provide for the review of investments in Canada by non-Canadians that could be injurious to national security.

> would still have much more liked a court in the middle

It’s an order to dissolve, not a dissolution per se. The accused can take it to court if they disagree.

> Decisions and orders of the Governor in Council, and decisions of the Minister, under this Part are final and binding and, except for judicial review under the Federal Courts Act, are not subject to appeal or to review by any court.

> except for judicial review under the Federal Courts Act

Not familiar with Canadian law. But isn’t this similar to national security challenges being required to be filed in D.C.?

Maybe USA prodded them.

Canada doesn’t seem to be getting the increasing hostility towards the west as quickly as their big brother to the south and that’s a bit of a security hole I’m sure the USA is keen to address.

Before I read the article I knew Chinese people were involved. It’s always the same story. Cultures. Oh dear.

Local details in this article: https://vancouversun.com/news/local-news/two-b-c-companies-o...

This article is much more informative than the current OP (Reuters); one vote for me that mods put up this one instead.

Changed to that from https://www.reuters.com/business/canada-orders-dissolution-t.... Thanks!

"Bluevec was the subject of a civil suit by competitor Vancouver-based SkyCope Technologies, which alleged Bluevec stole trade secrets through former SkyCope employees and gained a competitive advantage.

Last year, B.C. Supreme Court Justice Nitya Iyer ordered Jia, Bluevec and another Bluevec employee to pay $800,000 to SkyCope for misusing its confidential information and selling a direction-finding code to Chinese anti-drone company Beijing Lizheng Technology.

In court, Jia testified Lizheng was Bluevec’s biggest customer, but SkyCope alleged Jia was the owner of the Beijing company. Court records cited a decision on a separate case by a Beijing arbitration commission that found Jia was a shareholder in Lizheng and held shares in the company held in trust by other individuals."

TL; DR Founder appears to be a serial liar per court decisions in China and Canada. He stole anti-drone technology from a Canadian company (EDIT: stole Canadian technology from a Chinese-owned company operating in Canada) and gave it to China.

This much better and spells out clear reasons. Looks like industrial espionage. Done I don’t know the structure of the company can’t tell if it’s reasonable or not to shut down the whole company. Of course it could be, if they were set up intentionally to do just that with some stooges along the way.

While the administrative action is opaque, the B.C. Supreme Court isn't, and they found Bluevec guilty of "misusing its confidential information and selling a direction-finding code to Chinese anti-drone company".

That, to me, doesn't "look like industrial espionage", but rather is pretty clear cut.

> That, to me, doesn't "look like industrial espionage", but rather is pretty clear cut.

If the article is to be believed, it's two chinese co-workers who transferred to canada and started two competing firms in canada. And one stole tech from the other. My advice is stop reading comments from 'China hawk' shills like JumpCrisscross but read the article.

'The two met when working in the Beijing office of Fortinet, a cybersecurity firm. Both transferred to Fortinet’s Vancouver office and became good friends. After Liu left the company in 2016 to form SkyCope and work on developing anti-drone technology, Jia joined him months later as SkyCope’s chief technology officer.'

The courts found that they sold the tech to a Chinese-owned company ("selling a direction-finding code to Chinese anti-drone company Beijing Lizheng Technology"). In the defence space, this is an issue of national security.

I've only made reference to the article, literally quoting it.

> TL; DR Founder appears to be a serial liar per court decisions in China and Canada. He stole anti-drone technology from a Canadian company and gave it to China.

You never stop with the anti-china propaganda.

It is one chinese guy stealing from another chinese guy.

> the anti-china propaganda

I am a China hawk. But nothing here implicates the CCP.

> It is one chinese guy stealing from another chinese guy

One, their ethnicity and even nationality are irrelevant.

Two, that was already adjudicated. This action is about one person--with adverse court records in two countries--stealing defence technology and "selling" it to a company he controls in China. The stealing was a civil matter. The exfiltration is a national-security one.

> I am a China hawk.

You are also 'american' too right?

> But nothing here implicates the CCP.

Yet you wrote: "He stole anti-drone technology from a Canadian company and gave it to China."

> One, their ethnicity and even nationality are irrelevant.

Sure it does. Why else would you have written : "... and gave it to China."

It's amazing how certain kinds of 'hellish flamebait' are allowed by dang.

> You are also 'american' too right

This happens in Canada.

> Why else would you have written : "... and gave it to China."

Because he gave it to China! If I transfer military technology from idk Russia to my American company, I gave that kit to America. Whether I’m American is irrelevant. (And that action per se doesn’t mean I coördinated with the CIA.)

Countries can use agents of backgrounds other than their dominant one. Not every Russian spy is of a Russian ethnicity.

> He stole anti-drone technology from a Canadian company and gave it to China.

No. SkyCope itself is owned by a Chinese company, Shenzhen Shengkong. Also, Bluevec did not "give" the anti-drone tech to "China". It sold it to a (different) Chinese company for $800,000.

> [182] The defendants’ submissions characterize the Bluvec Code as “rudimentary” and say it did not use anything other than technology that was commonly known in the industry. However, Dr. Pan admitted that, while he was still working at Skycope, he wrote direction-finding code for Mr. Jia that later became part of the Bluvec Code. Bluvec subsequently sold that direction-finding technology to Lizheng for $800,000.

> [222] ... Similarly, there is no evidence that Skycope (including its parent, Shengkong) operates outside of Canada and China.

https://www.canlii.org/en/bc/bcsc/doc/2023/2023bcsc1288/2023...

> SkyCope itself is owned by a Chinese company

Thanks. Edited.

Given Ottawa is using a national security law, it would appear there would be ring-fencing around SkyCope that these companies didn’t have. Curious if SkyCope has military customers in China like at least one of these companies allegedly did [1].

> Bluevec did not "give" the anti-drone tech to "China". It sold it to a (different) Chinese copmany

Don’t court records in China show the company he “sold” it to is controlled by him?

[1] https://web.archive.org/web/20240105144551/https://pegauni.c...

Just make all security tech open source, then there’s no issues!

I jest! (But kinda not?!)

It’s a shame a two companies that have been in business for over 2000 years were brought down by a court order

There aren't actually any companies that old. The closest (according to Wikipedia) is 金剛組 (Kongō Gumi), which was family-owned for over 1420 years, until its purchase by a conglomerate in 2006.

I read it as a double entendre joke about B.C.

Whether it's appropriate on HN is another matter.

I hope there’s more meat to the reason than a nebulous and unfalsifiable "rigorous scrutiny by Canada's national security and intelligence community".

A country can set whatever rules of engagement they want, but they ought to be transparent.

Beijing should not be involved in security tech. Seems sufficient to me

They should spell out what they did or do.

One can easily guess those metrics.

I have two guesses. First is some financial tie to the Chinese military. Second is the Canadian government protecting its own offensive drone operations.

From another comment thread here:

Bluevec was the subject of a civil suit by competitor Vancouver-based SkyCope Technologies, which alleged Bluevec stole trade secrets through former SkyCope employees and gained a competitive advantage.

https://vancouversun.com/news/local-news/two-b-c-companies-o...

> should spell out what they did or do

Why? It's an administrative action.

If the companies want, they can disclose it or fight it in court, which would open the allegations to the public.

Because it completely destroys my faith and trust in the government. We cant follow the rules unless we know the fucking rules.

How does it hurt security to say it out loud? "CCP stealing anti drone tech = illegal" Are we just suppose to start up companies, wait for a weird investment that ends up being from the wrong person and blammo company destroyed?

Incase these idiots still don't understand why an entire convoy of random truckers can rise up to protest, let me say it in plain english: Since covid, this government has decided it can launch new/illegal "laws" immediately and without discussion at the drop of a hat. But it is completely fucktarded with them by not making any sense or doing it for normal everyday citizens: if chinese foreign interference is actually "bad" then why arent you clawing back all the real estate to sell cheaper to real citizens? Why just when it gets close to "national security" (which is really just smart use of radio equipment you dont even understand) is that you execute immediately without telling anyone why/how/what next/is it illegal to just use radios now?? please papa-gov use your words and stop hitting me...

Vet your investors? You know exactly what the rules are. They’re just not telling the public which rules were broken, nor do they have to.

The people involved undoubtedly know precisely what went wrong.

I’m gonna guess this one ain’t gonna be some kind of grey area.

> How does it hurt security to say it out loud?

It's not just security. When the IRS sends me a letter, I'd prefer that not be a matter of public record.

> wait for a weird investment that ends up being from the wrong person and blammo company destroyed

There is no non-military, non-law enforcement market for anti-drone technology. (Caveat: I don't know Canada's rules around shooting down objects in the airspace above your private property.) That makes it obviously a national-security manner.

If you're in that space, you don't take money from your country's adversaries. For Canada that includes China, Russia and North Korea. If this is confusing to someone, and it's really not, they should not start a business in this space.

> if chinese foreign interference is actually "bad" then why arent you clawing back all the real estate to sell cheaper to real citizens?

You really don't see the difference between anti-aircraft systems and condos?

> There is no non-military, non-law enforcement market for anti-drone technology.

Would you consider the counter-drone systems that are currently deployed over large fixed population gathering spaces, e.g. football stadiums, to be "law enforcement"? To me, they fall pretty squarely into the "private security" vertical.

These already-in-use systems don't involve any gun or missile fire — but rather, they work by a combination of targeted (microwave laser?) jamming; automated vulnerability-exploiting; and as a last resort, dispatching a very fast (but lightweight — so wouldn't hurt a person if it bumped into them) counter-drone to ram into and entangle itself with the incoming drone's propellers.

I think these systems intentionally avoid the obvious strategy (shooting at the drone), precisely so that they can be deployed legally by private companies.

---

...also, just to be silly: what would you consider a furture where they're selling anti-drone technology to drone companies, to enable e.g. delivery drones with some time to kill to go confuse their competitors' drones (and thereby slow down their competitors' drone deliveries?)

AFAICT, as unethical as it is, there's nothing illegal about that use-case. (It's not "harrassment" as there's no human involved; it's not "property defacement" because there's no damage being done; etc.)

> Would you consider the counter-drone systems that are currently deployed over large fixed population gathering spaces, e.g. football stadiums, to be "law enforcement"?

If they’re only jamming, no. Counter-drone actions, yes.

This company didn’t seem to do the latter. But the fact that they listed Chinese military customers on their website sort of gives the game away. (SkyCope is also Chinese owned. They appear to be continuing to operate. We can thus conclude this isn’t about ownership.)

What's the difference between a counter-drone tackling an attack drone, and a human bodyguard tackling a hitman? Human bodyguards are definitely "private security."

> What's the difference between a counter-drone tackling an attack drone, and a human bodyguard tackling a hitman?

Tackling someone doesn’t rain debris. We regulate airspaces for a reason.

> How does it hurt security to say it out loud? "CCP stealing anti drone tech = illegal" Are we just suppose to start up companies, wait for a weird investment that ends up being from the wrong person and blammo company destroyed?

They took a much more active role than just accepting CCP money according to the courts:

> Last year, B.C. Supreme Court Justice Nitya Iyer ordered Jia, Bluevec and another Bluevec employee to pay $800,000 to SkyCope for misusing its confidential information and selling a direction-finding code to Chinese anti-drone company Beijing Lizheng Technology.

> We cant follow the rules unless we know the fraking rules.

This is extraordinarily correct.

> How does it hurt security to say it out loud?

Comparing Gov NatSec claims against known facts teaches us something over and over and over again: Govs lie.

Specifically, directors & spokesbots of LEO, IC and NatSec agencies

have no history of telling the public meaningful truths by default.

--- Not just federal but state and local LEO, etc. ex: Cops say strangers will kidnap my kids. 50 years of FBI stats say kids are safer than ever.

> Are we just suppose to start up companies, wait for a weird investment that ends up being from the wrong person and blammo company destroyed?

It is standard practice for startups that work in proximity to the national security sector to vet their investors such that this is not an issue. Everyone knows the rules and the risks.

Sounds like the kind of thing someone who wants to obey the letter of the law but break the spirit of the law would say

> hope there’s more meat to the reason than a nebulous and unfalsifiable

"...ministry spokeswoman said it cannot provide more details citing confidentiality provisions in the Investment Canada Act, the legislation that allows for a national security review of any foreign investment into the Canada, regardless of its value" [1].

Presumably the companies can disclose. But "Bluevec has not yet responded to a request for comment about the federal order of dissolution."

[1] https://vancouversun.com/news/local-news/two-b-c-companies-o...

30 seconds of digging indicates the drone company sold anti-drone tech to China. Seems like an obvious no-no for a Canadian company, no?

This gives a good clue as to what was going on:

Sounds like Bluevec was taking direct investment from China, and relaying trade secrets of a Canadian company working in the defence industry to a foreign adversary.

> ... relaying trade secrets of a Canadian company working in the defence industry to a foreign adversary ...

SkyCope itself is owned by a Chinese company, Shenzhen Shengkong. Bluevec is, if anything, the more "Canadian" of the two companies.

> [222] ... Similarly, there is no evidence that Skycope (including its parent, Shengkong) operates outside of Canada and China.

https://www.canlii.org/en/bc/bcsc/doc/2023/2023bcsc1288/2023...

This is about selling the trade secrets to "Chinese anti-drone company Beijing Lizheng Technology".

One could ask: Why is the US not a decade ahead of the rest if the world in weaponizing small drones and deploying countermeasures to them?

The answer is a few letter: ATF & FAA.

If the original intent and clear meaning of the 2nd Amendment to the United States Constitution had been honored, armed drones and countermeasures to them would be common in the USA.

If the US looses a war in the next 20 years, it will be the fault of the ATF & FAA.

Yes, let's add citizens terrorizing each other with drones to the list of problems we have.

That's the price of the second amendment!

My understanding of military tech is that it is fairly hard to determine where the current state of the art is due to just how classified it all is.

How can you claim this with confidence?

There are reports from Ukraine that US supplied drones (both civilian and military) have not been effective — and this from a country that has been able to put drones made of cardboard to good use!

> reports from Ukraine that US supplied drones (both civilian and military) have not been effective

Source? To my knowledge, we’re not sending anything newer than the Iraq War to Ukraine. That means decent missiles but crappy drones.

There have been several such reports this year; here’s one I quickly found with a web search: https://www.businessinsider.com/us-drones-glitching-getting-...

US is sending all sorts of gear, not just dusty stuff from the back of the shelf. Sure, there would be reapers, but also modern stuff from switchblade drones (in use since 2010) to Phoenix Ghost (designed a couple of years ago).

one way this war has been calamitous for Russia as it has shown NATO how unprepared they are for Russian electronic countermeasures. Let’s see if NATO can learn and adapt in time.

> To my knowledge, we’re not sending anything newer than the Iraq War to Ukraine.

Not sure what specific drones have been sent, but we're definitely sending stuff newer than the Iraq War; heck, Ukraine has received the newly-developed GLSDB before US forces got it for other-than-testing use.

> heck, Ukraine has received the newly-developed GLSDB

And in real combat it turns out that the Russians have easily suppressed them with GPS jamming. Also the steerable artillery.

It’s useful to the US to learn this before they try to depend on it in combat themselves. They’re going to have to switch to vision.

Why would slow, large aircraft be able to operate in a theater with massive amounts of uncontested advanced anti-aircraft weaponry present?

US doctrine involves SEAD and immediately obtaining overwhelming air superiority, not being confined to the ground or artillery duels.

Look no further than day 1 and 2 of Desert Storm - Ukraine hasn't mounted an operation even remotely resembling the scale or complexity (and can't.)

Yes, that is US doctrine, but Iraq and Russia are hardly comparable.

They make drones by the millions, it doesn't matter how many $200,000 gold plated hangar babies we have, they'll be swamped by the end of the first month, and we won't be able to replace them.

Hangar Queen.... Not hangar baby... Ugh

Which shouldn't necessarily instil confidence, as that technology isn't distributed and if a government was to become corrupted/captured and tyrannical, then the government would exclusively have access to that latest tech.

It is foolish to assume they aren’t. They’ve been flying the things since the 80s

This thread is a weird place for you to soapbox. This is about two companies in Canada. Not only that, but it's about intelligence / security concerns, not airspace regulations.

  >Why is the US not a decade ahead

your implication runs foul there.

carry a big stick, but never pull it all out. just enough to win the stick-measuring contest.

The pitcher doesn't throw past 50% in warm-ups for a reason.

You know who benefits from the "idea" of an "incompetent" U.S military?

Us. Our intentional false projection of insecurity is just another layer of obfuscation.

A swarm of drones in any city could be neutralized within seconds if warranted.

You severely underestimate the power of the most powerful nation of the planet.

Hopefully. But where military tech trickles down to consumers, and consumers can't have any fun with drone thanks to the FAA, we don't have the drone ecosystem that it would take to win that contest. The US military draws from the US, so it can't go to the civilians and ask for drone operators and mechanics and engineers if there's not a vibrant drone ecosystem. How many high schoolers in the US are playing with drones to become future drone company owners? Manufacturing them, designing new ones, fixing existing ones. I want to believe but the FAA rules are just so stifling that it's just not there.

Chilling effect, sure.

But between youtube, cheap IR cameras, 10k-Neuron-Net running on a raspberry pi, github open source swarming algos, extremely cheap 3'D printing, hap-hazard innocuous chemicals, and a global ubiquitous surveillance state...

A "sufficiently motivated citizen" could literally walk down the street, encounter an altercation, and snap their fingers, and have their opponent 'neutralized' within seconds, all with off the shelf hardware and open source software, right now.

These people exist, but do we really want to stir them?

It's a very chilling effect. Instead of American football driving things, it should be drone piloting. We should reorganize our culture around drone flying, in order to be more competitive during world war 3 that we find ourselves in. We should have a national league of drone pilots, and every high school in the country should be fielding teams to find the best pilots across the country to the level of the Superbowl.

all moot. em jamming. best you get is line of sight, if that isnt countered too with constant retro-reflective detecting IR jamming directional beams(ie. any remote with a convex lense)

it will certainly be interesting. this is why we are Ukraine, to figure it out now.

But you don't need line of sight for the whole squad of operators if you can put up a repeater that the operator's signals can go through.

The FCC killed the hobby and in the process, made us fight with one hand behind our backs. Still, the future of autonomous drones means maybe we won't have human operators for the swarm so maybe it's moot.

The Houthis have shown that with the proliferation of advanced cheap drones we're starting to enter a period like the 18th century where random rebels can compete militarily with nation states. The ATF and FAA don't know how to handle that. Meanwhile, U.S adversaries are taking advantage of that paralysis.

You may not work for the military-industrial complex, but I do.

The US is over a decade ahead in deploying countermeasures to small drones. Systems like T-HEL were deployed over two years ago to an unspecified combat zone for field tests. There is a multi-layered approach to countermeasures including detection, jamming, and kinetic and energy attacks.

The US doesn't really have a program to weaponize small drones because it does not need one. You do not need a DJI phantom with a VOG-17 grenade on it being piloted by a soldier within artillery range of the enemy when you have operators at Creech and Holloman shooting hellfires at targets halfway around the globe.

Where jamming systems like Russia's Breakwater has been seen, repeatedly, on drone footage being observed and attacked by small drones, US systems like MFEW-AL are so effective that they are almost impossible to test in the US due to the coordination needed to ensure that cellphone coverage for the entirety of Kern County, CA or Clark County, NV isn't annihilated by its output.

Detection is also where coming capabilities will eclipse the rest of the world. DARPA has several programs to develop and commercialize detection techniques that are very impressive including Moving Target Recognition and Target Recognition and Adaption in Contested Environments, where multi-spectrum systems orbiting overhead will automatically detect, recognize, categorize, and alert persons and other systems in the area of a flying drone (or moving tank or truck) from 60,000 feet (or from SPAAAACE, in the future).

The vision is that automated surveillance hits get pushed out to systems on the ground, jammers activate, kill systems switch to "auto", and ELINT systems hunt for the transmitter so that target tasking can happen and a hellfire or artillery round deployed.

It's going to take time to design, build, test, and deploy those systems but they're coming and for all practical purposes nobody else (excluding Israel) has even started.

It's very exciting.

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