Sinovel Wind Charged With Stealing - ...

Sinovel Wind Charged With Stealing - Feds

Posted in the Fairhaven Forum

Jack Kelly

Jamestown, RI

#1 Jun 27, 2013
Feds Charge Sinovel Wind -Stealing - 4 in Ma. Charlestown, Scituate and 2 in Fairhaven
http://www.boston.com/businessupdates/2013/06...

By Erin Ailworth, Globe Staff

In a case that could have implications for US-China relations, a federal grand jury indicted Chinese wind turbine maker for stealing key technology from a Massachusetts firm.

The criminal charges — trade secret theft and criminal copyright infringment — escalate a two-year legal battle playing out in China between American Superconductor Corp. of Devens, which does business as AMSC, and Sinovel Wind Group Co. of Beijing, one of the largest wind turbine makers in the world. It may also add to one of the biggest sources of tension between the United States and China: the theft of intellectual property from American companies.

“The ongoing cases in China serve as a test for whether American corporations can depend on Chinese courts to address corporate espionage of intellectual property adequately,” said Mark Wu, an assistant professor at Harvard Law School.“Today’s indictment increases the pressure for Chinese authorities to act. If they don’t, the Justice Department is making clear that it will.”

AMSC makes software that controls the operation of wind turbines and Sinovel was once its biggest customer, accounting for nearly 80 percent of its revenues. In March 2011, Sinovel suddenly stopped accepting shipments from AMSC, canceling contracts and devastating the Devens company, which has since cut nearly 60 percent of its global workforce.

Three months later, AMSC believes it discovered why: it found a replica of its software operating in a Sinovel turbine in China. The company later sued Sinovel for more than $1.2 billion in Chinese courts.

The US criminal case, ironically, stems from four 1.5-megawatt turbines Sinovel sold to Massachusetts customers in — each operating with the allegedly stolen software, according to the indictment. State records show that at least one of the turbines, at the Massachusetts Water Resources Authority’s DeLauri Sewer Pump Station in Charlestown, was purchased using $4.7 million in stimulus funds.

“This clearly demonstrates that the rights of foreign businesses in China are not currently protected,“ AMSC chief executive Daniel P. McGahn said in statement.“Given that it is clear that a crime has been committed, the Chinese now have an opportunity to demonstrate that they respect intellectual property and take trade secret theft seriously.”

Sinovel could not be immediately reached Thursday, but has previously denied wrongdoing. Sinovel has \counter-sued AMSC in China, seeking $200 million for breach of contract and other claims.

According to the indictment, filed in Wisconsin where AMSC develops its wind turbine control software, Sinovel sold turbines to customers in Charlestown, Fairhaven, and Scituate that contained the stolen software.

The US Department of Justice has made a concerted effort to crack down on intellectual property theft in recent years, creating a strategic plan and a taskforce in 2010 aimed at addressing in intellectual property crimes here and abroad.

Last year, for example, the government brought charges against a Chinese company controlled by the Chinese government for attempting to steal trade secrets for a valuable white pigment used in paper, plastics, and paint from E.I. du Pont de Nemours & Co., of Wilmington, Del.

In China, AMSC has filed four cases against Sinovel, all which are winding their way through the Chinese legal system and could take months to years to resolve. The company is also investigating other international markets where Sinovel sells its turbines, including Brazil.

Erin Ailworth can be reached at [email protected] Follow her on Twitter @ailworth.
Jack Kelly

Jamestown, RI

#2 Jun 28, 2013
Feds charge Chinese firm with stealing technology of Mass. company AMSC - Boston.com

Erin Ailworth reports in the Boston Globe.

The US criminal case, ironically, stems from four 1.5-megawatt turbines Sinovel sold to Massachusetts customers in [ Fairhaven, Scituate and Charlestown] each operating with the allegedly stolen software, according to the indictment. State records show that at least one of the turbines, at the Massachusetts Water Resources Authority’s DeLauri Sewer Pump Station in Charlestown, was purchased using $4.7 million in stimulus funds.

According to the indictment, filed in Wisconsin where AMSC develops its wind turbine control software, Sinovel sold turbines to customers in Charlestown, Fairhaven, and Scituate that contained the stolen software.

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