US Energy Company is the Victim of Intellectual Property Theft

In mid-2013 Beijing-based wind turbine manufacturer and exporter Sinovel Wind Group Co. Ltd. (Sinovel) was charged with theft of intellectual property from US energy technology company AMSC, formerly American Superconductor Inc.

Sinovel purchased software from AMSC that helped to regulate the flow of electricity from wind turbines into a power grid.  In 2011, with the help of a former AMSC employee, Sinovel reportedly stole part of AMSC’s software code and fitted it to its existing wind turbines.  After stealing the code, Sinovel then refused to pay AMSC for $800 million worth of products and services the company had pledged to buy.

In January 2018 Sinovel was convicted in a US District Court of various charges, including conspiracy, theft of trade secrets, and wire fraud.  According to media sources, AMSC sought roughly US $1.2 billion in damages from Sinovel in Chinese courts, alleging that Sinovel fitted the illegally-obtained code to more than 1,000 wind turbines.  Sinovel may face hundreds of millions of dollars in potential fines imposed by US authorities.

The conviction comes during a time when the US is making an effort to curtail intellectual property theft, particularly focusing on Chinese manufacturers.  Some sources estimate that the US loses up to $600 billion annually to various types of property theft, including pirated goods, patent infringements, counterfeit products, and stolen technologies.  

If you have current or prospective business ventures in China, give Smith Brandon International a call.  We have helped many companies evaluate potential business partners in China and have experience and resources in China we can put to work for you. With our background and experience, Smith Brandon International can help you understand what to expect when conducting business abroad and can help you identify potential risks or obstacles in your professional endeavors.

‍