Tuesday July 10, 2018

Chinese Wind Turbine Company Convicted of Stealing Trade Secrets

ASMC of Massachusetts won their court case against a Chinese wind turbine manufacturer in January and was awarded nearly $60 million in restitution payments. Sinovel Wind Group was convicted of conspiracy, theft of trade secrets and wire fraud by a federal jury for conspiring with former AMSC engineer Dejan Karabasevic to steal ASMC's source code for software crucial to regulating the flow of electricity from the turbines to the electrical grids. They were hit with an additional $1.5 million dollar fine, which is the maximum allowed by law, on July 6, 2018 in federal court.

ASMC which relied on Sinovel for 70% of their revenue was immediately fired from all contracts with the Chinese company after the theft of intellectual property. They had to shutter one field office and scale back operations in another. This loss of income caused the American company to fire 700 workers as their stock price tanked by 50% in one day. American prosecutors are touting this as a win because Sinovel's total assets dropped from $3.4 billion to $1 billion. I fail to see this rosy ending as Sinovel is still making wind turbines within China and ASMC lost $1.1 billion in value. That's like getting back $60 when someone steals $1,100 from you.

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During the trial, prosecutors provided evidence of how in 2011 a disgruntled AMSC engineer, Dejan Karabasevic, who was based in Austria, conspired with two Sinovel officials, Su Liying and Zhao Haichun, to steal AMSC’s copyrighted information and trade secrets to produce wind turbines and retrofit existing wind turbines. A jury learned that Karabasevic downloaded the source code for AMSC software needed to operate its wind turbines from a server located at AMSC’s Middleton office. Karabasevic, who lives in Serbia, and Su and Zhao, both of whom live in China, have been charged with the same crimes but their countries are not extraditing them to the U.S., O’Shea said.

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