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Chinese Wind Turbine Maker Fined $1.5 Million

The company was fined for stealing trade secrets from a Massachusetts-based technology company.

A wind turbine of Sinovel Wind Group at an offshore wind farm near Nantong city, east of China’s Jiangsu province, in December 2011.
A wind turbine of Sinovel Wind Group at an offshore wind farm near Nantong city, east of China’s Jiangsu province, in December 2011.

MADISON, Wis. (AP) — A federal judge in Wisconsin fined a Chinese wind turbine manufacturer Friday for stealing trade secrets from a Massachusetts-based technology company, wrapping up an investigation that spanned three countries.

U.S. District Judge James Peterson fined Sinovel Wind Group $1.5 million and placed the company on probation for a year. Prosecutors charged the company with conspiracy, theft of trade secrets and wire fraud in 2013. A jury in Madison convicted Sinovel in January following an 11-day trial. The $1.5 million fine is the maximum amount Peterson could have levied.

"This case is about protecting American ideas and ingenuity," said Scott C. Blader, the U.S. attorney for the Western District of Wisconsin. "The devastation Sinovel's illegal actions caused to AMSC and its employees will not be tolerated."

Sinovel attorney Alex Akerman didn't immediately reply to an email seeking comment.

According to court documents, Sinovel had contracted with AMSC, an energy technology company in Ayer, Massachusetts, to purchase software regulating the flow of electricity from turbines to the electrical grid for more than $800 million. Sinoval wanted to use the software to retrofit existing turbines in China to comply with grid requirements and make new turbines more efficient.

Sinovel stopped paying for the software in March 2011. AMSC field workers in China discovered unauthorized versions of the software on Sinovel turbines three months later.

The source code was stored on a computer in AMSC's office in Middleton, Wisconsin. Investigators uncovered email and Skype conversations that show that Austria-based AMSC employee Dejan Karabasevic downloaded the source code from the Middleton office in March 2011, provided the code to Sinovel and traveled to China to adapt the software for use in Sinovel turbines.

Sinovel had offered Karabasevic a six-year contract worth $1.7 million days before he downloaded the code, according to court documents.

As a result of the theft, AMSC's revenues fell, its market value dropped from about $1.6 billion to about $200 million and the company was forced to eliminate nearly 700 jobs, more than half of its global workforce, prosecutors said in a news release.

Peterson found AMSC's losses from the theft exceeded $550 million. Sinovel has agreed to pay AMSC $57.5 million in restitution.

President Donald Trump's administration and China's leadership imposed tens of billions of dollars in tariffs on each other's goods Friday, bringing the world's two biggest economies to the brink of a trade war. In announcing the U.S. tariffs, Trump said he was fulfilling a campaign pledge to crack down on what he contends are China's unfair trade practices and its efforts to undermine U.S. technology and intellectual property.

The Sinovel case began more than three years before Trump took office in January 2017.

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