US Convicts Chinese Tech Firm Of Stealing US Trade Secrets

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Anders Hagstrom Justice Reporter
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The United States convicted a Chinese tech firm Wednesday of stealing trade secrets from a U.S. wind turbine firm, causing the Chinese firm’s stock to plummet.

Sinovel, the Chinese firm, severely damaged U.S. turbine firm AMSC when it stole trade secrets regarding the transfer of electricity from turbines to the power grid, the Department of Justice (DOJ) announced Wednesday. A Wisconsin jury convicted the Beijing-based company, and its stock fell by 4 percent soon afterward.

“Sinovel nearly destroyed an American company by stealing its intellectual property,” said Acting Assistant Attorney General Cronan. “As today’s jury verdict demonstrates, this type of conduct, by any corporation – anywhere – is a crime, and won’t be tolerated. The Department is dedicated to helping foster innovation and growth in our economy by deterring and punishing intellectual property theft from American companies.”

Sinovel released a statement saying it was “taking measures to protect the company’s interests, and will turn to legal means to safeguard the company’s legal rights and protect the rights of its minority holders,” according to CNNMoney.

Sinovel signed an $800 million service contract with AMSC in 2011, but sought to steal the firm’s copyrighted secrets rather than honor the contract. Sinovel convinced an AMSC employee to turn over the firm’s source code, allowing the Chinese company to manufacture and retrofit wind turbines without AMSC’s help. It then cut ties and refused to pay AMSC its $800 million.

ASMC lost more than $1 billion in shareholder equity and nearly 700 jobs, roughly half of its global workforce. The case specifically charged Sinovel employees Su Liying and Zhao Haichun, along with AMSC employee Dejan Karabasevic. The two Chinese men convinced Krabasevic to download the copyrighted source code and join Sinovel in March 2011. While they have been convicted, none live in the U.S. and it’s unclear whether they will be extradited.

“Today’s verdict sends a strong and clear message that the theft of ideas and ingenuity is not a business dispute; it’s a crime and will be prosecuted as such,” U.S. Attorney Scott Blader said Thursday. “Sinovel’s illegal actions caused devastating harm to AMSC. I commend the efforts of the investigation and prosecution team, and reaffirm the commitment of this office to protect American commerce and prosecute those who would seek to steal intellectual property.”

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