While many people focused on the tariffs of 30% imposed by the United States on imported solar photovoltaic cells and modules last week, most missed the larger renewable energy news story that after an 11 day trial, last Wednesday a federal jury in Wisconsin convicted Chinese firm Sinovel of stealing wind technology, including the theft of trade secrets.
The Beijing based Sinovel is the largest wind turbine manufacturer in China and possibly the largest in the world, so when it is convicted of all charges in a criminal case of stealing trade secrets including copyrighted software to produce “wind turbines, and to retrofit existing wind turbines with [stolen] technology, without having to pay” for the software, products and services, such is significant.
And while the dollar amounts are staggering, .. in March 2011, Sinovel owed American Superconductor more than $100 Million USD for software, products, and services previously delivered, and had contracted to purchase more than an additional $700 Million USD of software, it is the conspiracy using the stolen proprietary information to produce Billions of dollars of new wind turbine products, including sold in the U.S., that is astounding.
The Grand Jury charges in this case read like something out of a Cold War spy novel. In furtherance of the conspiracy,
(a) On or about February 26, 2011, ZHAO HAICHUN [a Chinese national residing in China] emailed KARABASEVIC [a Serbian national who worked for AMSC Wintec through June 30, 2011] a contract offering a salary of 11 million renminbi (approximately $1.7 million USD) for KARABASEVIC to work for SINOVEL from May 2011 through June 2017, essentially doubling KARABASEVIC’s annual pay.
(b) On or about March 7, 2011, KARABASEVIC used the internet to access an AMSC computer in Middleton, Wisconsin to secretly copy the development folder for the PM3000 [proprietary software that is the Power Module], which included the PM3000 source code. .. ..
(k) On or about June 2, 2011, ZHAO HAICHUN, in a written Skype “chat,” reported to KARABASEVIC that he was at a wind turbine farm in Gansu, China, and had conducted a “voltage sag” test on twenty-one SINOVEL wind turbines to which the L VRT update had been copied. ZHAO HAICHUN noted that the test was successful and wrote to KARABASEVIC that it was “all because of you.” .. ..
(m) On or about October 25, 2011, SINOVEL and ZHAO HAICHUN copied and caused to be copied the software compiled from the stolen and modified AMSC PM3000 source code into a wind turbine in Charlestown, Massachusetts.
With apologies to John le Carré, you will enjoy reading the complete Grand Jury charges here.
Sentencing is set for June 4 and federal officials previously announced, that taking into consideration the grave financial damage done to the U.S. based American Superconductor and its successor, Sinovel faces fines of up to $4.8 Billion.
To appreciate the import of this much watched criminal case, in a statement released on the day of the guilty verdict, Commerce Secretary, Wilbur Ross said Chinese disrespect for “intellectual property rights, by commercial espionage” poses a direct threat to the U.S.
This trade secret theft decision is a big deal in terms of the increasing attention be paid by the U.S. government to intellectual property theft by Chinese interests and in responding the Chinese aggressive mercantilist policies, both of which portend dramatic shifts in the business of renewable energy and sustainability more broadly in the U.S. and across the globe that have become so intertwined with China.