The indictment by the US Department of Justice of Chinese WTG manufacturer Sinovel and two of its employees for the theft of AMSC's trade secrets, after an investigation by the Federal Bureau of Investigation, has prompted AMSC to request that the Obama administration and Congress re-evaluate the USA's trade relationship with China.
AMSC has requested that the Obama administration and Congress re-evaluate the USA’s trade relationship with China. The move follows the indictment by the US Department of Justice of Sinovel and two of its employees for the theft of AMSC’s trade secrets, after an investigation by the Federal Bureau of Investigation.
Sinovel is accused of the theft of Massachusetts-based AMSC’s proprietary software code and the use of that intellectual property in four 1.5 MW Sinovel turbines that have been installed in the Massachusetts towns of Charlestown, Fairhaven, and Scituate. Those parties and their contractors are not implicated in any way.
"We have worked with law enforcement to verify that these Sinovel-manufactured wind turbines contain AMSC’s stolen intellectual property," said Daniel P. McGahn, AMSC’s president and CEO. "The fact that Sinovel has exported stolen American intellectual property from China back into the United States – less than 40 miles from our global headquarters – shows not only a blatant disrespect for intellectual property but a disregard for international trade law. These criminal acts have led to significant financial harm to AMSC, its employees and their families as well as its shareholders. Over the past two years, more than 500 staff members worldwide have lost their jobs following Sinovel’s egregious and unlawful behaviour."
In September 2011, AMSC filed four legal actions against Sinovel in China alleging the illegal use of AMSC’s intellectual property and seeking more than $1 billion in deliveries and damages. At that time, AMSC also requested that Chinese police bring criminal action against Sinovel and some of Sinovel’s employees. Nearly two years later, AMSC believes that the Chinese police have yet to undertake an investigation and China’s civil courts have yet to begin substantive hearings of AMSC’s cases.
AMSC and Sinovel began working together in 2005, shortly after Sinovel’s founding. AMSC provided extensive wind turbine design and engineering services as well as power electronics and controls to Sinovel in the years that followed. By 2011, with the co-operation of AMSC, Sinovel was manufacturing thousands of wind turbines annually and had emerged as China’s largest and the world’s second largest wind turbine manufacturer.
In March 2011, Sinovel abruptly refused substantial shipments from AMSC, breaching multiple contracts. In June of 2011, AMSC discovered that Sinovel had gained access to and was actively using stolen AMSC trade secrets and intellectual property illicitly supplied by Dejan Karabasevic, an AMSC employee. Karabasevic confessed to the crime and to his collusion with Sinovel, and he was subsequently tried and imprisoned in Austria.
In addition to this confession, the evidence collected by law enforcement and AMSC includes hundreds of e-mails and messages between Karabasevic and senior-level Sinovel staff members. These messages, says AMSC, give a detailed account and timetable of the crime.