Beijing Higher People's Court Rejects Sinovel's Appeal
AMSC, a global solutions provider serving wind and power grid industry leaders, issued several updates regarding its litigation with Sinovel Wind Group, Ltd (Sinovel).
In the trade secret infringement case, the Beijing Higher People's Court upheld AMSC's position by rejecting Sinovel's appeal to transfer the case to the Beijing Arbitration Commission. Additionally, the first substantive hearing in the Beijing copyright infringement case took place at the Beijing No. 1 Intermediate People's Court. Finally, in the U.S. Department of Justice's case against Sinovel, members of its senior management team, and AMSC's former employee, the United States District Court for the Western District of Wisconsin upheld an earlier ruling that the service of summons of the criminal complaint was valid.
Trade Secret Infringement Case
The trade secret infringement case, filed in September 2011, alleges Sinovel's and certain of its employees' unauthorized use of portions of the Company's wind turbine control software source code developed for Sinovel's 1.5 MW wind turbines. In July 2012, Sinovel filed a jurisdiction opposition motion to remove this case from the Beijing No. 1 Intermediate People's Court and to transfer the matter to the Beijing Arbitration Commission. In February 2014, the Beijing No.1 Intermediate People's Court rejected Sinovel's motion in light of China Supreme People's Court January 2014 rulings in favor of AMSC on similar jurisdictional issues in the two civil copyright infringement cases discussed below. Sinovel appealed the Beijing No. 1 Intermediate People's Court decision to the Beijing Higher People's Court in March 2014. The Beijing Higher People's Court upheld the Beijing No. 1 Intermediate People's Court's ruling that the dispute will be heard by the Beijing Courts separate from the commercial arbitration claims. AMSC is seeking approximately US$450 million in monetary damages in the trade secret infringement case.
Copyright Infringement Cases
AMSC's two software copyright infringement cases, one in Beijing and one in Hainan, went through comparable appeals on similar jurisdictional grounds as the trade secret infringement case. AMSC's case in Beijing is against Sinovel; its case in Hainan is against Sinovel and Guotong Electric Co Ltd (Guotong). In February 2014, China's Supreme People's Court decided in favor of AMSC on the jurisdiction of both software copyright infringement cases. Similar to the trade secret infringement case, Sinovel filed motions to remove the cases from the Beijing and Hainan courts and transfer the cases to the Beijing Arbitration Commission. In those cases, the Supreme People's Court ruled that the cases will be heard as copyright infringement cases separate from the commercial arbitration claims. On September 15, 2014, the Beijing No. 1 Intermediate People's Court held its first substantive hearing in the Beijing case. At the hearing, the parties presented evidence, reviewed claims, and answered questions from the court. The Hainan case is expected to be heard in the Hainan court system. AMSC is seeking approximately US$6 million in monetary damages in the Beijing copyright infringement case and US$200,000 in monetary damages in the Hainan copyright infringement case.
U.S. Department of Justice Case
In June 2013, Sinovel, members of its senior management team, and AMSC's former employee were indicted by a Grand Jury for the theft of AMSC's trade secrets. Sinovel challenged the jurisdiction of the service of summons, contending that the government's service attempt was inadequate, and as a result, that the U.S. government lacks jurisdiction to proceed. In May of 2014, a magistrate judge rejected Sinovel's challenge. Sinovel appealed the decision and in September 2014, the District Judge upheld the decision of the magistrate judge. Sinovel immediately appealed this ruling to the United States Court of Appeals for the Seventh Circuit.