China Supreme Court Ruling Favors AMSC in Two Sinovel Suits

American Superconductor Corp. (AMSC) said two copyright-infringement cases brought in China will be heard in court after the country’s Supreme People’s Court rejected efforts to move the disputes to arbitration.

The cases are among four suits AMSC filed in 2011 against Sinovel Wind Group Co. (601558), the Chinese wind-turbine maker that was once its largest customer, the Devens, Massachusetts-based supplier of wind-power components said in a statement today. AMSC shares surged the most in 18 months.

AMSC is seeking a total of more than $1.2 billion in damages in Chinese courts, alleging that Sinovel violated sales contracts and stole its technology. Sinovel accounted for 70 percent of the company’s sales in 2009 and stopped accepting AMSC shipments in March 2011.

“The ruling by the Supreme People’s Court marks an important milestone for our cases against Sinovel’s theft of AMSC’s intellectual property,” Chief Executive Officer Daniel McGahn said in an e-mailed statement. Sinovel had sought to move the two cases to arbitration and the ruling today sent them both back to lower courts.

A former AMSC employee in Austria was sentenced to a year in jail after pleading guilty in September 2011 to criminal charges including economic espionage for obtaining software and source code for Sinovel. U.S. prosecutors charged Beijing-based Sinovel, two of its executives and the employee in U.S. courts in June with stealing trade secrets.

“I look at this as positive, but you’ve got to keep it in perspective,” Carter Driscoll, an analyst at Ascendiant Capital Markets LLC in Irvine, California, said in an interview today. “There’s no guarantee of any positive outcome. It could be a number of months before it even hits the docket. As strong as the evidence appears to be in favor of AMSC, there’s no dollars changing hands, and this doesn’t change the fundamental position of a very challenging wind market globally.”

AMSC jumped 14 percent to $2.07 at the close in New York.

To contact the reporter on this story: Justin Doom in New York at jdoom1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.