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China's Sinovel Indicted In The United States For Stealing AMSC Trade Secrets

Stocks in this article: AMSC

In March 2011, the Chinese company abruptly refused substantial shipments from AMSC, breaching multiple contracts. In June of 2011, AMSC discovered that Sinovel had gained access to and was actively using stolen AMSC trade secrets and intellectual property illicitly supplied by Dejan Karabasevic, an AMSC employee. Karabasevic confessed to the crime and to his collusion with Sinovel, and he was subsequently imprisoned in Austria.

In addition to this confession, the evidence collected by law enforcement and AMSC includes hundreds of e-mails and messages between Karabasevic and senior-level Sinovel staff members. These messages give a detailed account and timetable of the crime. They demonstrate that Sinovel sought this stolen intellectual property, the conspirators knew that this intellectual property was obtained illegally, and also were aware of the damages that the theft would likely inflict on AMSC.

The evidence includes contracts, personally authorized by Sinovel's then chairman and CEO and current director, Han Junliang, promising to pay Karabasevic in excess of $1.5 million (approx. 11 million RMB). In addition, law enforcement has obtained the e-mails containing the actual intellectual property transfer as well as evidence from multiple wind farms in both China and the United States demonstrating that Sinovel has been utilizing the stolen software to upgrade its wind turbines.

"Our case against Sinovel is incredibly clear-cut and the evidence is very damning," said John Powell, Vice President and General Counsel, AMSC. "We would like to again advise wind farm developers around the world that any wind turbines that are purchased from Sinovel may very well contain stolen intellectual property from AMSC. We will continue to seek justice on a global basis."

Government Support

AMSC has received strong support from officials within various branches of the U.S. and E.U. governments. The list of supporters includes former Secretary of State Hillary Clinton, current Secretary of State John Kerry and Vice President Joe Biden from the United States, U.S. Ambassador to Austria, William Eacho, former U.S. Trade Representative Ambassador Ron Kirk, Deputy Secretary of Commerce Rebecca Blank, Former Secretary of Commerce and current Ambassador to China, Gary Locke, U.S. Intellectual Property Enforcement Coordinator Victoria Espinel, Senator Elizabeth Warren, Congresswoman Niki Tsongas, as well as Karel De Gucht, E.U. Commissioner for Trade, Daniel Caspary, Majority Speaker in the European Parliament on Trade and Othmar Karas, Vice-President of the European Parliament.

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