Saturday, June 29, 2013

Chinese Firm Is Charged in Theft of Turbine Software

The indictment by a federal grand jury in Madison, Wis., outlined actions that the Chinese firm, Sinovel, took against AMSC, formerly the American Superconductor Corporation, and represents the latest skirmish in a series of trade disputes between the United States and China involving renewable energy.

AMSC said the theft in 2011 led to the loss of 500 jobs and cited the damages as lost sales and trade secrets.

The two Chinese executives are in China, and the former employee, who was working for AMSC in Austria, has returned home to Serbia, according to John W. Vaudreuil, the United States attorney. He said that the United States did not have extradition treaties with either nation, but the accused could be arrested if they traveled to a country with which the United States does have an extradition treaty.

Sinovel will face a trial here, he said, and could face fines equal to twice the damages, plus restitution to AMSC.

The employee, Dejan Karabasevic, 40, served a brief prison term in Austria related to the case, Mr. Vaudreuil said. According to the indictment, after Mr. Karabasevic quit AMSC, he was offered a lucrative contract to work for a Chinese turbine blade factory, apparently to disguise the nature of the payment to him.

The indictment is a small vindication for AMSC, which has been pursuing claims against Sinovel, a former customer, in China. AMSC says that after Sinovel stole the software, it refused delivery of merchandise it had ordered, worth more than $700 million. It is seeking $70 million in arbitration in that case. It is also suing in China for $450 million for infringement of trade secrets.

Matthew J. Jacobs, a lawyer at Vinson & Elkins, which represents Sinovel, said that he had no immediate comment. When AMSC filed for arbitration in Beijing, Sinovel filed a counterclaim for $58 million, accusing it of breach of contract.

The indictment named the executives as Su Liying, 36, deputy director of research and development at Sinovel, and Zhao Haichun, 33, a technology manager. It also says that Sinovel even exported to the Boston area a computer with stolen software that had been paid for with stimulus money.

In response to the indictment, AMSC asked the Obama administration and Congress to “re-evaluate the U.S. trade relationship with China.”

Daniel P. McGahn, the president and chief executive, said in a statement, “We have worked with law enforcement to verify that these Sinovel-manufactured wind turbines contain AMSC’s stolen intellectual property.”

“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,” he said.

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