AMSC (Nasdaq:AMSC), a global solutions provider serving wind and
power grid industry leaders, today announced that China's Supreme
People's Court has decided in favor of AMSC on the jurisdiction of
AMSC's two software copyright infringement cases against Sinovel
Wind Group, Ltd. (Sinovel) and Guotong Electric (Guotong). The
Supreme People's Court ruled that the cases will be heard as
copyright infringement cases separate from the commercial
arbitration claims. The cases will be heard independently in their
respective court systems.
These are two of the four legal cases that AMSC brought against
Sinovel in late 2011 regarding Sinovel's contractual breaches and
AMSC's discovery of intellectual property theft by Sinovel. AMSC is
also engaged in a commercial arbitration case and a trade secrets
case against Sinovel in China.
Background on Beijing Civil Case
In September 2011, AMSC filed a civil action with the Beijing
No. 1 Intermediate People's Court that alleges Sinovel's
unauthorized copying and use of portions of AMSC's wind turbine
control software developed for Sinovel's 1.5 MW wind turbines and
the binary code, or upper layer, of AMSC's software for its PM3000
power converters. In this case, AMSC is seeking a cease and desist
order and damages totaling US$6 million. In November 2011, Sinovel
filed a motion to remove this case from the Beijing No. 1
Intermediate People's Court and transfer the matter to the Beijing
Arbitration Commission. The court denied Sinovel's motion to remove
the case. Sinovel filed an appeal of that decision to the Beijing
Higher People's Court, and the Beijing Higher People's Court
supported the Beijing No. 1 Intermediate People's Court's ruling
and rejected Sinovel's appeal. Sinovel then filed an appeal of that
decision with China's Supreme People's Court. The Supreme People's
Court has ruled to uphold the Beijing Higher People's Court ruling
that the dispute shall be heard by the court. AMSC will now await a
hearing date from the Beijing No. 1 Intermediate People's
Court.
Background on Hainan Civil Case
In September 2011, AMSC also filed a copyright case against
Sinovel and Guotong Electric with the Hainan No. 1 Intermediate
People's Court. In this case, AMSC is seeking a cease and desist
order as well as damages totaling approximately US$200,000, making
this the smallest of AMSC's legal actions against Sinovel. In this
case, Sinovel filed a jurisdiction opposition motion in December
2011 requesting that the Hainan No. 1 Intermediate People's Court
dismiss AMSC's case against Sinovel, saying the case should be
governed by the Beijing Arbitration Commission pursuant to the
terms of component contracts between AMSC and Sinovel. Not only did
the court grant Sinovel's motion, but also it dismissed the cases
against both Sinovel and Guotong. AMSC appealed the dismissal to
the Hainan Higher People's Court, which on April 5, 2012 upheld the
decision of the Hainan No. 1 Intermediate People's Court. AMSC then
filed an appeal of that decision with China's Supreme People's
Court. The Supreme People's Court overturned the previous two
rulings made by the Hainan No. 1 Intermediate People's Court and
Hainan Higher People's Court and has ruled that the case will be
heard by the court. AMSC will now await a hearing date from Hainan
No. 1 Intermediate People's Court.
About AMSC (NASDAQ: AMSC)
AMSC generates the ideas, technologies and solutions that meet
the world's demand for smarter, cleaner ... better energy.
Through its Windtec™ Solutions, AMSC provides wind turbine
electronic controls and systems, designs and engineering services
that reduce the cost of wind energy. Through its Gridtec™
Solutions, AMSC provides the engineering planning services and
advanced grid systems that optimize network reliability, efficiency
and performance. The company's solutions are now powering gigawatts
of renewable energy globally and enhancing the performance and
reliability of power networks in more than a dozen countries.
Founded in 1987, AMSC is headquartered near Boston, Massachusetts
with operations in Asia, Australia, Europe and North America. For
more information, please visit http://www.amsc.com.
AMSC, Windtec and Gridtec are trademarks or registered
trademarks of American Superconductor Corporation. All other brand
names, product names, trademarks or service marks belong to their
respective holders.
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Any statements in this release
about future expectations, plans, prospects, and our beliefs
regarding the potential impact of the Supreme People's Court ruling
on AMSC's other pending cases against Sinovel and other
statements containing the words "believes," "anticipates," "plans,"
"expects," "will" and similar expressions, constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements represent management's current expectations and are
inherently uncertain.
There are a number of important factors that could materially
impact the value of our common stock or cause actual results to
differ materially from those indicated by such forward-looking
statements. Such factors include: We have experienced recurring
operating losses and recurring negative cash flows from operations
which raise substantial doubt about our ability to continue as a
going concern. This substantial doubt has resulted in a qualified
opinion from our auditors with an explanatory paragraph regarding
our ability to continue as a going concern. We believe this opinion
may have an adverse effect on our customer and supplier
relationships; our success in addressing the wind energy market is
dependent on the manufacturers that license our designs; we may not
realize all of the sales expected from our backlog of orders and
contracts; our business and operations would be adversely impacted
in the event of a failure or security breach of our information
technology infrastructure; our success is dependent upon attracting
and retaining qualified personnel and our inability to do so could
significantly damage our business and prospects; we rely upon
third-party suppliers for the components and subassemblies of many
of our Wind and Grid products, making us vulnerable to supply
shortages and price fluctuations, which could harm our business;
many of our revenue opportunities are dependent upon subcontractors
and other business collaborators; if we fail to implement our
business strategy successfully, our financial performance could be
harmed; problems with product quality or product performance may
cause us to incur warranty expenses and may damage our market
reputation and prevent us from achieving increased sales and market
share; new regulations related to conflict-free minerals may
force us to incur significant additional expenses; our
contracts with the U. S. government are subject to audit,
modification or termination by the U.S. government and include
certain other provisions in favor of the government; the continued
funding of such contracts remains subject to annual congressional
appropriation which, if not approved, could reduce our revenue and
lower or eliminate our profit; we may acquire additional
complementary businesses or technologies, which may require us to
incur substantial costs for which we may never realize the
anticipated benefits; many of our customers outside of the United
States are, either directly or indirectly, related to governmental
entities, and we could be adversely affected by violations of the
United States Foreign Corrupt Practices Act and similar worldwide
anti-bribery laws outside the United States; we have limited
experience in marketing and selling our superconductor products and
system-level solutions, and our failure to effectively market and
sell our products and solutions could lower our revenue and cash
flow; we have experienced recurring losses from operations and
negative operating cash flow; these factors raise substantial doubt
regarding our ability to continue as a going concern; we have a
history of operating losses, and we may incur additional losses in
the future; our operating results may fluctuate significantly from
quarter to quarter and may fall below expectations in any
particular fiscal quarter; we may require additional funding in the
future and may be unable to raise capital when needed; our debt
obligations include certain covenants and other events of default;.
Should we not comply with the covenants or incur an event of
default, we may be required to repay our debt obligations in cash,
which could have an adverse effect on our liquidity; if we fail to
maintain proper and effective internal controls over financial
reporting, our ability to produce accurate and timely financial
statements could be impaired and may lead investors and other users
to lose confidence in our financial data; we may be required to
issue performance bonds or provide letters of credit, which
restricts our ability to access any cash used as collateral for the
bonds or letters of credit; changes in exchange rates could
adversely affect our results from operations; growth of the wind
energy market depends largely on the availability and size of
government subsidies and economic incentives; we depend on sales to
customers in China and India, and global conditions could
negatively affect our operating results or limit our ability to
expand our operations outside of these countries; changes in
China's or India's political, social, regulatory and economic
environment may affect our financial performance; our products face
intense competition, which could limit our ability to acquire or
retain customers; our international operations are subject to risks
that we do not face in the United States, which could have an
adverse effect on our operating results; adverse changes in
domestic and global economic conditions could adversely affect our
operating results; we may be unable to adequately prevent
disclosure of trade secrets and other proprietary information; our
patents may not provide meaningful protection for our technology,
which could result in us losing some or all of our market position;
the commercial uses of superconductor products are limited today,
and a widespread commercial market for our products may not
develop; there are a number of technological challenges that must
be successfully addressed before our superconductor products can
gain widespread commercial acceptance, and our inability to address
such technological challenges could adversely affect our ability to
acquire customers for our products; we have not manufactured our
Amperium wire in commercial quantities, and a failure to
manufacture our Amperium wire in commercial quantities at
acceptable cost and quality levels would substantially limit our
future revenue and profit potential; third parties have or may
acquire patents that cover the materials, processes and
technologies we use or may use in the future to manufacture our
Amperium products, and our success depends on our ability to
license such patents or other proprietary rights; our technology
and products could infringe intellectual property rights of others,
which may require costly litigation and, if we are not successful,
could cause us to pay substantial damages and disrupt our business;
we have filed a demand for arbitration and other lawsuits against
our former largest customer, Sinovel, regarding amounts we contend
are overdue. We cannot be certain as to the outcome of these
proceedings; we have been named as a party to purported stockholder
class actions and stockholder derivative complaints, and we may be
named in additional litigation, all of which will require
significant management time and attention, result in significant
legal expenses and may result in an unfavorable outcome, which
could have a material adverse effect on our business, operating
results and financial condition; our 7% convertible note contains
warrants and provisions that could limit our ability to repay the
note in shares of common stock and should the note be repaid in
stock, shareholders could experience significant dilution; our
common stock has experienced, and may continue to experience,
significant market price and volume fluctuations, which may prevent
our stockholders from selling our common stock at a profit and
could lead to costly litigation against us that could divert our
management's attention. These and the important factors discussed
under the caption "Risk Factors" in Part 1. Item 1A of our Form
10-K for the fiscal year ended March 31, 2013, and our other
reports filed with the SEC, among others, could cause actual
results to differ materially from those indicated by
forward-looking statements made herein and presented elsewhere by
management from time to time. Any such forward-looking statements
represent management's estimates as of the date of this press
release. While we may elect to update such forward-looking
statements at some point in the future, we disclaim any obligation
to do so, even if subsequent events cause our views to change.
These forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date of
this press release.
CONTACT: AMSC Contact:
Kerry Farrell
Phone: 978-842-3247
Email: kerry.farrell@amsc.com
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