Friday, January 27, 2012

American Superconductor Sues Former Chinese Customer for Theft of Trade Secrets (AMSC)

We haven't had much on AMSC since the news that Sinovel was refusing to take delivery, here's the latest.
From E&E Publishing:
A case of software piracy with a mystery writer's twist has opened the newest rift between the United States and China over intellectual property protection, in a dispute with vital stakes for a leading American wind turbine component vendor.

American Superconductor (AMSC) expects to begin a breach of contract suit this month in the Beijing Arbitration Commission against Sinovel, China's largest wind turbine manufacturer, seeking a total of $790 million to cover current and contracted shipments of wind turbine components and software. AMSC stunned shareholders on April 5 with the announcement that Sinovel -- by far its largest customer -- was refusing delivery of AMSC products and canceling contracts for future deliveries.

The U.S. company has also filed a $453 million trade secrets infringement case against Sinovel in China and criminal charges there, as well, after a former AMSC manager in Austria was convicted last September of stealing AMSC's proprietary software and delivering it to Sinovel. Sinovel alleges performance failures by AMSC in a $58 million counterclaim.

The case is a new hot spot in the tension over the security of American companies' industrial know-how, patents and intellectual property in Chinese markets. "The failure of Chinese companies to respect western intellectual property rights has been one of the greatest sources of strain in the relationship" between the United States and China, said Leo Schwartz, head of China Strategies LLC, a Pittsburgh consulting firm....MORE
This case will show where the Chinese government comes down on the IP issues, it's a pretty big deal.