Policy & Market


Update: AMSC to appeal Chinese court's Sinovel case ruling

US wind technology group AMSC plans to appeal against a Chinese court's decision to throw out the first of its cases to be heard against Sinovel over alleged intellectual property (IP) infringement.

The Hainan No 1 Intermediate People’s Court notified Sinovel – China's largest turbine manufacturer – on 2 February that it had rejected the case.

AMSC claims the outcome is "not altogether unexpected" and says the Hainan case is in any event the smallest of its actions underway in China against Sinovel.

Sinovel had filed an objection to the court’s jurisdiction over the matter, and according to a statement from AMSC this was behind the case being dismissed.

The case is one of three civil lawsuits being brought by AMSC against Sinovel – formerly its biggest customer.

The legal barrage centres on AMSC's claims that Sinovel stole coding required for its software for low-voltage ride through (LVRT) technology used in wind turbines. A former AMSC employee in Austria has already been jailed for IP theft from the US company.

It has filed another copyright infringement case in the Beijing No 1 Intermediate People’s Court and a trade secrets case in the Beijing Higher People’s Court.

AMSC is also pursuing Sinovel at the Beijing Arbitration Commission, where it is seeking nearly $70m in compensation for past shipments and asking the court to enforce contracts in place.

None of the other cases have started. The Beijing Arbitration Commission was due to open its hearing last month, but it was postponed at the last minute due to a family bereavement involving a legal official.

The court in southern Hainan province had alerted Sinovel in October last year that it was required to be a third party in a case brought by AMSC against Dalian Guotong – a power converter maker part-owned by Sinovel – and Huaneng Hainan Power Company (HHPC), a subsidiary of China Huaneng Group, one of the country's "big five" utilities.

AMSC wanted them to cease using the allegedly stolen software in their products. The Hainan court has also rejected the action brought against the other two companies.

In its statement, Sinovel warns that the decision is not final and AMSC has 10 days to appeal the ruling.

AMSC confirms it will appeal and continue its efforts to get a "cease and desist" order and about $200,000 in damages.

The US company says: "In December 2011, Sinovel filed a jurisdiction opposition motion requesting its dismissal by the Hainan Province No 1 Intermediate People’s Court, saying the case should be governed by the Beijing Arbitration Commission.

"On February 3, 2012, AMSC received the civil ruling from the court, which granted Sinovel’s motion and dismissed the entire case."

AMSC chief executive Dan McGahn says: "We are starting to see motion from the Chinese courts, and proceedings are getting underway as expected.

"The Hainan court’s dismissal of our smallest case is not altogether unexpected, and we are appealing the ruling. We continue to have confidence in all of our cases and expect that our legal actions will yield a positive outcome.”

AMSC is seeking a total of more than $1.2bn in damages via the three civil lawsuits and the arbitration process.

Note: Update adds statement from AMSC over plans to appeal