"Files trace betrayal of a prized China-Mass. partnership; Software theft jolted Mass. firm" by Erin Ailworth | Globe Staff, July 10, 2013
On a Thursday evening three Junes ago, Dejan Karabasevic desperately needed to contact his former wife. Karabasevic, a top engineer in American Superconductor Corp.’s offices in Klagenfurt, Austria, had been summoned to work, then confronted by police, who suspected him of selling his company’s proprietary software to a Chinese wind turbine maker.
The questioning lasted past midnight. When he finally reached his former wife, he instructed her to delete all the e-mails in his Google account. But authorities stopped her before she could.
The e-mails proved the basis for Karabasevic’s subsequent arrest and conviction in an Austrian court on charges of revealing trade secrets. His case marked what would be the opening round of a two-year fight by the Devens-based technology firm known as AMSC to defend its intellectual property rights — even as it lost millions of dollars and laid off hundreds of workers as the result of the software theft.
It would also open a window on the sometimes tawdry world of economic espionage between companies battling for preeminence in emerging energy markets.
The saga — pieced together with court records, financial filings, and interviews — took private and federal investigators from a wind farm in China to corporate offices in Austria and Middleton, Wis., and ultimately back to Massachusetts.
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Here, less than 40 miles from the headquarters of AMSC, FBI agents found a key piece of evidence that helped persuade a federal grand jury recently to indict Sinovel Wind Group Co. of Beijing, two of its employees, and Karabasevic on charges of conspiracy, wire fraud, and the theft of trade secrets.
The giveaway: a bit of pirated software found in a Sinovel-made turbine in Charlestown. Authorities believe the Chinese manufacturer stole the software from the Devens company, installed it in Sinovel turbines, and then sold the illegally equipped turbines in the United States at a profit....
The indictment underscores one of the most contentious issues in Sino-American relations, the protection of the intellectual property of companies doing business in China. How this criminal case — as well as four suits that AMSC filed against Sinovel in Chinese courts — plays out could influence relations between the two countries for years to come.
“It’s important because a lot of people lost their jobs all over the country,” said Timothy O’Shea, an assistant US attorney in the Western District of Wisconsin, where the indictment was filed. “It’s important to protect intellectual property so that people have an incentive to innovate and invest.”
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AMSC hired private investigators, who quickly narrowed the list of suspects to the handful of employees who had access to the stolen software code....
Despite what investigators say is strong evidence against Sinovel, there will be no easy end to AMSC’s drama. The legal case against Sinovel, its employees, and Karabasevic will be difficult to pursue. The United States has no extradition treaty with China, and Karabasevic, after serving a year in Austrian jail, has returned to Serbia, which also has no US extradition treaty....
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"Chinese firm charged with stealing tech from Mass. company" by Erin Ailworth | Globe Staff, June 27, 2013
A federal grand jury, acting in a case that could have implications for US-China relations, indicted a Chinese wind turbine maker Thursday on charges that it stole key technology from a Massachusetts company.
The criminal charges escalate a two-year battle playing out in Chinese courts between American Superconductor Corp., which does business as AMSC, and Sinovel Wind Group Co. of Beijing, one of the largest wind turbine makers in the world. It may also add fuel to one of the biggest sources of tension between the United States and China: the theft of intellectual property from US companies.
“The allegations in this indictment describe a well-planned attack on an American business by international defendants – nothing short of attempted corporate homicide,” said John W. Vaudreuil, US attorney for the Western District of Wisconsin, who sought the indictment....
The US criminal case, ironically, stems from Sinovel’s sale of four turbines to Massachusetts customers — each turbine operating with the allegedly stolen software, according to the indictment. State records show that at least one of the turbines, at the Massachusetts Water Resources Authority’s DeLauri Sewer Pump Station in Charlestown, was purchased using $4.7 million in stimulus funds.
Following the indictment Thursday, AMSC called on the Obama administration and Congress to “re-evaluate the US trade relationship with China,” given that companies in China are “brazenly stealing trade secrets.”
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The US Department of Justice has made a concerted effort to crack down on intellectual property theft in recent years, creating a strategic plan and a task force in 2010 aimed at addressing intellectual property crimes here and abroad....
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"The criminal charges brought against a Chinese wind turbine maker last week are another sign of the US government’s increasing efforts to protect intellectual property rights of American companies doing business in China and a warning shot to Chinese firms seeking to expand internationally, legal and trade specialists said....
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