Thursday, September 15, 2011

Corporate spying case leads AMSC to file charges against Sinovel

By Rodney Brown

American Superconductor Corp. is filing both criminal charges and civil complaints against its one-time largest customer, China’s Sinovel Wind Group Co. Ltd. over alleged theft of AMSC’s intellectual property about its wind turbines, stemming from a corporate espionage case.

According to a release from AMSC (Nasdaq: AMSC), “Sinovel illegally obtained and used AMSC’s intellectual property to upgrade its 1.5 megawatt wind turbines in the field to meet proposed Chinese grid codes.” The charges come after an investigation by AMSC and law enforcement, the release stated, although it did not identify in the release which law enforcement agencies were involved. Devens-based AMSC said it is looking for unspecified monetary damages and for Sinovel to cease infringing on its IP.

In a filing with the U.S. Securities and Exchange Commission, AMSC said that the criminal investigation was conducted by “Austrian authorities regarding the actions of a former employee” of AMSC’s Windtec subsidiary. In July, “the former employee was arrested in Austria and is currently awaiting trial on charges of economic espionage and fraudulent manipulation of data,” the filing stated.

In April, AMSC announced that Sinovel Wind Group had refused to accept contracted shipments of 1.5-megawatt and 3-megawatt wind turbine core electrical components and spare parts. American Superconductor also said at the time it believed Sinovel planned to reduce its level of inventory before accepting further shipments. That led to significant job cuts at AMSC — approximately 30 percent of its global workforce.

American Superconductor announced it would buy Austria-based Windtec Systemtechnik GmbH in November of 2006 for approximately $12.4 million in stock.