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Wednesday, April 18, 2012

Massachusetts Firm Turns To Chinese Courts Over Stolen Technology

The Director of the National Security Agency is calling China’s industrial espionage campaign “the greatest transfer of wealth in history.”

And apparently it’s getting worse.

We’ve heard the concern of American businesses who partner with Chinese firms to build things only to find themselves pushed out of the partnership when the Chinese companies steal the American technology that made the building possible.

In March 2011, Massachusetts-based wind turbine designer American Superconductor Corporation lost its biggest customer, Chinese manufacturing partner Sinovel, and two-thirds of its $315 million revenue when Sinovel started using stolen copies of American Superconductor’s technology to make its own turbines, effectively cutting American Superconductor out entirely.

After announcing the loss, American Superconductor’s stock market value decreased by 40 percent in one day and 84 percent by the following September.

American Superconductor is now suing Sinovel in Chinese court for a total of $1.2 billion in damages for breach of contract, copyright infringement, and theft of trade secrets.

In a press release the company writes:

In total, AMSC is seeking to recover from Sinovel more than $1.2 billion for contracted shipments and damages in these cases, which stem from Sinovel’s contractual breaches and AMSC’s discovery of intellectual property theft by Sinovel employees.


  • Michael Riley, reporter for Bloomberg

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  • http://www.facebook.com/sean.gallaty Sean Patrick Gallaty

    Guess what?  This has been going on forever.  Americans being greedy and stupid, continue to deal with the chinese who are corrupt and sneaky.

  • Tncanoeguy

    Is the global marketplace – at least regarding trade with China – doing more harm than good?  Good luck in that Chinese court. 

  • Thomas O’Brien

    Be careful who you outsource to, especially if the government owns most of it. 

  • Brothersower88

    It is not a matter of outsourcing… Alleged Chinese hackers have stolen top secrete government documents as well.

    Why would anyone pay for the R&D to innovate when you can pay hundreds of college age people pennies to try every way possible to break codes and firewalls.

    If your design is linked to the internet, you better have defenses military grade or higher put in place to keep them safe.

    Welcome to the Age of the Geek!

    • Brothersower88

      PS Giving your R&D to people who cannot be held accountable is asking for trouble. 

      Its like going to a huge city and giving your wallet to a stranger (company in a foreign country) for safe keeping.  The stranger can be honorable or walk off… 

      If you gave your wallet to someone in your church, office, school, etc. (company in your home country), you at least have a better chance to hold them accountable because you are in the same community.

  • http://www.facebook.com/people/Deborah-Strumsky/687163122 Deborah Strumsky

    All the multinational firms see is low labor costs in China, and they ignore all the other risks  and problems such as poor quality control and the ubiquitous theft of company intellectual property.
    Any firm that does not perform a full risk analysis of shifting production to China, frankly they are asking to be victims of IP theft.

  • http://profile.yahoo.com/TA7GUUX55EWAZ7KG73KUS4OWFU Vic Mar

    There are lessons to be learned in this partnership turned sour. Why the US company put itself in such a vulnerable position 
     in the first place  is a source of amazement. As a rephrased adage says: “Desirous of one-half kilo, the whole kilo was lost.”

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