Monday, February 6, 2012

Chinese court dismisses one of AMSC vs. Sinovel cases

By Rodney H. Brown

Devens-based AMSC will see one its cases against former partner Sinovel Wind Group Co. Ltd. decided in arbitration, as a Chinese court has thrown out its civil complaint.

AMSC (Nasdaq: AMSC) announced in a release Monday that the Hainan Province Number 1 Intermediate People’s Court has granted Sinovel’s motion for dismissal of a copyright infringement complaint from AMSC against it and Dalian Guotong Electric Co. Ltd., a company related to Sinovel. On Friday, Feb. 3, AMSC was given notice that the court had dismissed the entire case.

Daniel P. McGahn, AMSC president and CEO, said in the release that the dismissal was “not altogether unexpected, and we are appealing the ruling.”

The court cases date back to September 2011, when AMSC filed both criminal charges and civil complaints against Sinovel over alleged theft of AMSC’s intellectual property about its wind turbines, stemming from a corporate espionage case.

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 2011, “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.