Chinese wind turbine maker found guilty of stealing US trade secrets, causing $1b in losses

A Wisconsin jury convicted Beijing-based Sinovel Wind Group of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud after an 11-day trial.
A Wisconsin jury convicted Beijing-based Sinovel Wind Group of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud after an 11-day trial.PHOTO: REUTERS

WASHINGTON (AFP, REUTERS) - Sinovel, one of China's leading wind turbine makers, was found guilty on Wednesday (Jan 24) of stealing proprietary technology from US firm AMSC, causing ASMC US$800 million (S$1 billion) in losses, the Justice Department said.

A Wisconsin jury convicted Beijing-based Sinovel Wind Group of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud after an 11-day trial.

The conviction exposes Beijing-based Sinovel to hundreds of millions of dollars in potential fines, according to the Justice Department. It is scheduled to be sentenced on June 4.

The court heard that in 2011, Sinovel recruited Mr Dejan Karabasevic, an Austria-based AMSC employee, who stole source code from AMSC computers that formed the basis of its technology for regulating the flow of electricity from wind turbines to electrical grids.

At the time, AMSC, formerly known as American Superconductor Inc, was selling its technology to Sinovel.

Obtaining that code allowed Sinovel to drop its orders to the US company as it took the technology for its own, causing AMSC an estimated US$800 million in losses.

Losing Sinovel orders plunged AMSC into "severe financial hardship", as the company's market value fell by US$1 billion and it was forced to cut 700 jobs, more than half of its global workforce.

"Sinovel nearly destroyed an American company by stealing its intellectual property," said Acting Assistant Attorney-General John Cronan.

"As today's jury verdict demonstrates, this type of conduct, by any corporation - anywhere - is a crime, and won't be tolerated."

The conviction comes as the United States studies possible intellectual property action against China. US Commerce Secretary Wilbur Ross said on Wednesday that China's tech ambitions represent a direct threat that is being implemented by disrespect for "intellectual property rights, by commercial espionage".

The US government has repeatedly warned of Chinese companies, both private and government-related, seeking to steal US trade secrets and technology.

Last week, a Chinese software developer was sentenced to five years in prison for stealing computer source code from IBM to hand over to a Chinese government agency.

Charges are pending against Mr Karabasevic, who lives in Serbia, and two individuals who live in China and worked for Sinovel at the time. The two individuals are deputy director of research and development department Su Liying, and and technology manager Zhao Haichun, according to court records.