The U.S. Department of Justice has charged a Chinese turbine manufacturer with stealing patented software from an American company for use in turbines erected in Fairhaven and three other Massachusetts towns.
The DOJ charged Sinovel Wind Group Thursday with stealing trade secrets from AMSC (American Superconductor), a Massachusetts-based company, and causing an alleged loss of more than $800 million to the company.
The software in question helps regulate the electricity flowing from a turbine into the electrical grid. According to the DOJ, Sinovel had been purchasing that software coded by AMSC until it abruptly stopped accepting shipments and canceled all its remaining orders in March 2011. According to AMSC, Sinovel was its biggest customer, owing the company $100 million for services rendered with contracts for $700 million more worth of services.
The DOJ indictment alleges three Sinovel employees successfully conspired to obtain the copyrighted software in order to produce wind turbines retrofitted with the stolen technology.
Turbines with the stolen software were later erected in four Massachusetts towns, including two purchased by Fairhaven Wind and erected at the Waste Water Treatment Plant on Arsene Street.
U.S. Attorney General John Vaudreuil said in a statement that the allegations in the indictment “describe a well-planned attack on American business by international defendants” and called the actions “nothing short of attempted corporate homicide.”
Sinovel could not be reached for comment.
In his statement, Vaudreuil also commended “the assistance provided by the owners and operators of the Massachusetts turbines” during the FBI’s two-year investigation.
A statement released by Fairhaven Wind said the company only became aware of the dispute between Sinovel and AMSC “after the turbines for Fairhaven were ordered.”
“Sinovel committed to deliver genuine AMSC software and components as part of the turbines supplied to Fairhaven Wind,” the statement read. “If this is determined not to be the case, Sinovel is obligated to make it right.”
According to a statement released by AMSC, “proprietary software code” was used in 1.5 megawatt turbines installed in Charlestown, Fairhaven and Scituate, but that “those parties and their contractors are not implicated in any way.”
In the statement, AMSC President and CEO Daniel McGahn said that the “fact that Sinovel has exported stolen American intellectual property from China back into the U.S. – 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 asked that President Barack Obama reevaluate the United States’ trade relationship with China, alleging that Sinovel’s canceled orders after the theft resulted in the company cutting nearly 60 percent of its global workforce.
Wednesday’s DOJ indictment of Sinovel is the latest in a long legal battle between the two companies. AMSC has sued Sinovel for more than $1.2 billion in Chinese courts. Also in Chinese courts, Sinovel has counter-sued AMSC seeking $200 million for breach of contract.
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