American Superconductor seeks $1.2 billion from Chinese firm

By Erin Ailworth, Globe Staff

American Superconductor Corp. is seeking more than $1.2 billion in damages and payments for contracted shipments from its once-largest customer, a Chinese wind turbine maker accused of stealing the Devens firm’s technology.

During a call with investors today, American Superconductor chief executive Daniel P. McGahn said the company has filed several law suits in China against Sinovel Wind Croup Co. of Beijing, alleging copyright infringement and theft of trade secrets.

Court and arbitration proceedings are expected to begin in the next few months, as the company tries to collect damages as well as nearly $70 million owed for past shipments ordered by Sinovel and $700 million in undelivered parts.

“We believe the strength of our cases is undeniable,” McGahn said.

American Superconductor, which makes control systems for wind turbines and other advanced technologies for utilities, began to suspect Sinovel of theft in June, following the Devens company’s discovery of an imperfect replica of its software in a Sinovel wind turbine in China. Months before the Chinese company had stopped accepting shipments of parts from American Superconductor, causing its revenues to plunge.

An investigation eventually led the company to an engineer at an American Superconductor subsidiary in Austria, who was later found guilty of stealing proprietary software and sentenced by Austrian authorities to a year in jail.

Sinovel could not be reached for comment toda. The Chinese company has explicitly denied stealing American Superconductor’s technology, and insists American Superconductor’s products had become sub-par and failed to meet requirements for China’s power grid. It has filed a counter-claim with the Beijing Arbitration Commission against American Superconductor, alleging breach of contract.

But today, McGahn told investors he believes his company has strong evidence against Sinovel, including “hundreds of emails between senior Sinovel staff members and our now incarcerated former employee,” and Chinese officials will rule in favor of American Superconductor.

“These messages give a detailed account of the timetable of the crime,” McGahn said. “They show that certain senior level Sinovel employees knew that this [intellectual property] was obtained illegally.”

Those details helped boost the company’s stock, which rose nearly 11 percent to close at $4.51 per share.