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A former American Superconductor (AMSC) employee who admitted to selling wind turbine secrets to Sinovel was convicted on Sept. 23 for fraudulent data handling and distribution of trade secrets. Dejan Karabasevic was sentenced to 12 months in jail, two years of probation and fined 200,000 euros in damages.

Sinovel immediately denied all accusations of having bought AMSC's intellectual property.

With its sentence, the Klagenfurt district court in Austria concluded the first act of the industrial espionage thriller that is causing serious trouble for AMSC, whose once-biggest customer Sinovel allegedly stole the wind-power electronics software code developed by Windtec - AMSC's Austrian subsidiary - for its 1.5 MW turbines.

Karabasevic, a 38-year-old Serbian national, has admitted to downloading the latest version of AMSC's C12 wind turbine electronics software from his office laptop and subsequently copying parts of the code into the program version already in Sinovel's possession. He is alleged to have received 15,000 euros from Sinovel in compensation. In addition, AMSC claims Karabasevic had employment contracts with Sinovel and others worth well over $1 million for a five-year period until 2017.

According to his attorney, Karabasevic was unhappy about a change in job-related responsibilities. He resigned in March and later used his computer to access the software and furnish it to Sinovel.

"We then found a version of the software in Sinovel's installations in China in June that we had never sold to the firm," said a Windtec programmer, according to a court transcript.

After Karabasevic's arrest in July, the accused cooperated with the Austrian authorities to secure a reduced sentence.

AMSC specified the value of the stolen software as 7.5 million euros - the result of five years of work by 15 programmers. In addition the company claims that Sinovel, which accounted for more than 75% of the U.S. company's revenues last year, owes $250 million for contracted and received shipments. Austrian subsidiary Windtec had to write off 96 million euros and laid off 40 staff members at its Klagenfurt location.

The criminal proceeding is one of five lawsuits AMSC initiated as a result of the dispute with Sinovel. The option remains open for a separate civil suit against Karabasevic in Austria. On Sept. 15, the company announced it was seeking a cease-and-desist order against Sinovel to prevent infringement on its intellectual property.

Dan McGahn, AMSC's CEO's says Karabasevic's "admission of theft and collusion with Sinovel demonstrates the strength of our case."

In response, Sinovel denied all charges.

"The claims of the AMSC employee are completely false," Sinovel said in a statement. The company claims to "have never bought any business secrets or intellectual property rights from the AMSC employee. The claims by AMSC and its employee have seriously violated Sinovel's public image and business reputation."

Wiebke Herding is a freelance writer living in Brussels.

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