The parties predict a two to three week trial, according to the US district court for the Western District of Wisconsin, AMSC chief executive Dan McGahn said Tuesday on the company’s fiscal third quarter conference call.

Last 9 December, the court held an arraignment hearing in the high-profile case that could have ramifications for US commercial relations with its largest trading partner China.

In June 2013, a federal grand jury in Wisconsin returned an indictment charging Sinovel Wind Group in China, two employees there, its US subsidiary and a former employee of AMSC’s Windtech unit in Austria with one count each of conspiracy to commit trade secret theft, theft of trade secrets and wire fraud.

“The allegations in this indictment describe a well-planned attack on an American business by international defendants – nothing short of attempted corporate homicide,” US Attorney for the Western District of Wisconsin John W. Vaudreuil said at the time.

Those actions caused AMSC an alleged loss of more than $800m, according to the US Justice Department. Under US law, the charges carry a maximum penalty twice the alleged loss for each of the three counts in the indictment – a potential $4.8bn or more.

If convicted, the individuals named at the time of the indictment each face a maximum penalty of 35 years in prison – five years on the conspiracy charge, 10 years for theft of a trade secret and 20 years for wire fraud.

They were Su Liying, deputy director of Sinovel’s R&D department; Zhao Haichun, a technology manager for Sinovel, and Dejan Karabasevic, the former Windtec employee.

According to the indictment, AMSC developed and sold software and equipment to regulate electricity flow from wind turbines to grids, which it considered to be trade secrets and propriety information.

The software that runs the PM3000, a part of AMSC’s turbine electrical control system, was developed by the company in Wisconsin and stored on a computer at its office there. The PM3000 also works with other products including AMSC’s low voltage ride through (LVRT) software.

Sinovel had been buying software and equipment from AMSC for wind turbines that it manufactured, sold and serviced.

The indictment states that Sinovel owed AMSC more than $100m in products and services previously delivered and had entered into contracts to purchase more than $700m in products and services in the future.

It alleges that the defendants conspired to obtain AMSC’s copyrighted information and trade secrets in order to produce turbines and to retrofit existing ones with LVRT technology, without having to pay the Massachusetts-based firm for previously delivered products and services – thereby cheating AMSC out of more than $800m.

The indictment alleges that Sinovel, through Su and Zhao recruited Karabasevic to leave Windtec and join Sinovel, and to secretly copy IP from the AMSC computer system. The defendants are charged with stealing PM3000 source code from AMSC on 7 March 2011 and transmitting it by downloading it from an AMSC computer in Wisconsin to a computer in Austria.

Following that theft, Sinovel commissioned several turbines in Massachusetts and allegedly copied into them software compiled from the software stolen from AMSC.   

China court proceedings

Meanwhile, AMSC continues to pursue civil litigation against Sinovel in China. It has four legal actions against Sinovel for the theft and use of its IP, and one other for Sinovel’s alleged breach of its contractual obligations.

Three of these cases are in the civil court system and the breach of contract case is in arbitration.

AMSC is seeking $453m from Sinovel in the trade secrets case, which has been transferred to a newly established court in Beijing that is dedicated to intellectual property cases, McGahn says.

AMSC is appealing rulings in two other civil cases involving copyright issues.

Lastly, McGahn said AMSC’s $720m arbitration case against Sinovel is in the “early technical review phase.” It is being heard by the Beijing Arbitration Commission.

“They attempted to kill the company. That strategy has clearly failed. As you can see, our company is only getting stronger. We can’t give up on this issue. I personally will never give up,” he told analysts on the conference call.

Q3 results

AMSC reported improved financial results in its fiscal third quarter ending 31 December with a $3m net loss, or 22 cents per share, versus a $6.4m loss, or 72 cents, a year earlier.

Revenue was up 21% to $25.8m, driven by record wind turbine electrical control system (ECS) shipments to licensee Inox in India.