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US Charges Chinese Wind Company with Stealing Trade Secrets

Thursday, 27 Jun 2013 | 9:05 PM ET
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Chinese wind turbine maker Sinovel Wind Group Co and two of its employees were charged with stealing trade secrets from U.S.-based AMSC by the Department of Justice (DoJ) on Thursday.

A federal grand jury in the Western District of Wisconsin returned an indictment leveling theft charges on Sinovel, two of its employees and a former employee of AMSC, a Devens, Massachusetts-based company that provided wind turbine design, engineering services and power electronics and controls to Sinovel. Authorities said the theft allegedly cost AMSC $800 million.

Sinovel officials were not immediately available for comment.

In 2011, AMSC, which mainly supplies electrical systems used in wind turbines, filed several lawsuits in China against Sinovel alleging the illegal use of AMSC's intellectual property.

(Read More: China Trade Data Underscores Growth Worries)

AMSC, which was formerly known as American Superconductor Corp, said at the time it wanted to recover more than $1.2 billion in damages.

"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," AMSC Chief Executive Officer Daniel McGahn said.

China Must Increase Trade Secret Protection: USTR
Demetrios Marantis, Acting U.S. Trade Representative says China must step up its enforcement of trade secrets and take more action on criminal and civil side.

AMSC called on President Barack Obama's administration and Congress to re-evaluate the U.S. trade relationship with China.

AMSC said that, over the past two years, more than 500 staff worldwide have lost their jobs following Sinovel's "egregious and unlawful behavior."

(Read More: US Presses China to Stop Growing Trade Secret Theft)

The defendants indicted include Su Liying, the deputy director of Sinovel's Research and Development Department, Zhao Haichun, a technology manager for Sinovel and Dejan Karabasevic, a former AMSC employee.

Sinovel, once AMSC's largest customer, contracted with an AMSC employee in Austria to get the software designed for Sinovel's turbines.

(Read More: White House Mobilizes to Stop Theft of Trade Secrets)

"The Sinovel case is a classic example of the growing insider threat facing our nation's corporations and their intellectual property," said FBI Executive Assistant Director Richard McFeely. AMSC shares were up as much as 7 percent in extended trading.

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