AMSC, Chinese firm agree to $57.5M settlement over IP theft
Photo | Grant Welker
AMSC's former Devens offices. The company has downsized to a smaller facility in Ayer due to financial difficulties.
Ayer wind turbine controls manufacturer AMSC has reached a $57.5-million settlement with China-based Sinovel to settle disputes over Sinovel’s stealing of trade secrets.
Per the agreement, Sinovel will pay AMSC $32.5 million by the end of Thursday, and another installment of $25 million within 10 months after a U.S. federal court delivers the first sentences against Sinovel, which is expected Friday.
In January, a federal court found Sinovel guilty of stealing trade secrets, which AMSC said had cost the company more than $1 billion in market value and 70 percent of its workforce.
Also part of the agreement is AMSC’s Austrian subsidiary granting Sinovel a non-exclusive license for certain AMSC intellectual property to be used solely in Sinovel’s doubly fed wind turbines. If Sinovel or its former chairman and shareholder Wenyuan Wei does not make the $25-million second payment, the license agreement will be terminated.
Various legal proceedings between the two companies will also be terminated, effectively ending a long-standing legal dispute.
In a statement, AMSC CEO Daniel McGahn said the company had valued a previous partnership with Sinovel, which he heralded as an example of Sino-U.S. cooperation in the renewable energy industry.
McGahn has publicly expressed support for President Donald Trump and the administration’s hardline stance on global trade, including protecting American companies from intellectual property theft. The AMSC case against Sinovel started in 2013 during the Barack Obama Administration, but McGahn said Trump is the first president to get proactive and aggressive against the stealing of trade secrets.
“This closes a challenging chapter for AMSC,” he said.
Since the agreement was announced Tuesday, AMSC’s stock has dropped by more than 15 percent at the start of Thursday trading.
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