July 9, 2018

Court fines Sinovel $1.5M for AMSC theft

Photo | Grant Welker
AMSC's former Devens offices. The company has downsized to a smaller facility in Ayer due to financial difficulties.

A Chinese wind turbine manufacturer has been fined $1.5 million by a U.S. federal court for stealing trade secrets from Ayer-based AMSC.

In its decision, the U.S. federal court in the Western District of Wisconsin ruled China-based Sinovel's theft of AMSC's intellectual property resulted in AMSC losing more than $550 million. The $1.5 million fine is the maximum statutory fine, the Department of Justice said in a press release Friday.

The ruling came just a few days after AMSC and Sinovel agreed to a $57.5 million settlement to settle the dispute. AMSC has already received $32.5 million, and is due another $25 million within 10 months from Friday's sentence.

Also included in the sentence is Sinovel paying $850,000 to additional victims.

After an 11-day jury trial in January, Sinovel was convicted on conspiracy to commit trade theft, theft of trade secrets and wire fraud.

Rather than pay AMSC more than $800 million in owed in products and services it received, Sinovel hatched a scheme to steal the company's wind turbine technology, resulting in the loss of 700 jobs and more than $1 billion in shareholder equity, said Acting Assistant Attorney General John P. Cronan of the Justice Department's Criminal Division.

The jury found Sinovel employees Zhao Haichun and Su Liying recruited an AMSC employee working in Austria to join Sinovel. That employee, Dajan Karabasevic, copied intellectual property from the AMSC computer system, including the source code for software used on wind turbines.

As part of the settlement between the two firms, AMSC will grant a non-exclusive license for certain AMSC intellectual property to be used only in Sinovel's doubly fed wind turbines. If Sinovel or its former chairman and shareholder Wenyuan Wei does not make the $25-million second payment, the license agreement will be terminated.

Various legal proceedings between the two companies will also be terminated, effectively ending a long-standing legal dispute.

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