I've been pondering how events are going to play out this next Friday, when the sentence is revealed for Sinovel in Federal Court for IP theft against AMSC..
First off, we should remember that this is a Federal Criminal Case where Sinovel was convicted in January. It's not a civil case brought by AMSC.. So that explains the lack of PR by the company.. They really are not privy to what the Feds are doing..
They are the victim, as well as a witness.. not the plaintiff..
But the Feds have already outlined the damages ($1.2 Billion) as well as the potential fine (4x damages), The fine would go into the Federal coffers, not AMSC.. BUT to achieve that huge fine, the damages need to be recognized..
Remember, Trump slapped $50 Billion in Tariffs on China SPECIFICALLY CITING IP THEFT.. It was NOT because of the Trade Deficit, which is a totally different matter.. This is about outright theft of US IP and Trump is FAR more pissed off about that, than he is about the deficit (who he blames on prior administrations and not the Chinese, who just took advantage of our p*ss-poor trade policies).
The Feds are going to fine Sinovel, and obviously the company cannot pay that fine.. But the Chinese Gov't CAN, and so can each of their manufacturers who want to sell their goods into the US. So guess where the potential $5 Billion Fine to the Federal Gov't is going to be paid out of?? Yep.. the IP theft related Tariffs...
And I strongly suspect that the actual damages will be paid to AMSC out of that same IP Theft Tariff "slush fund"..
And how can China argue against it? They have done nothing in their own courts to punish Sinovel.. In fact, they have acted to protect the company from US litigation, or even admitting the IP theft occurred.. And that is another issue to be negotiated.. to force Bejing to protect US IP assets in their OWN courts for ALL US companies, not just AMSC..
So effectively, it really doesn't matter if Sinovel goes bankrupt in the face of these damages. The US is penalizing $50 Billion of China exports to the US to INSURE that it gets it's fine money.. (which isn't chicken feed)..
So can the US Gov't claim that $5 Billion (actually $4.8 Billion) without compensating AMSC for the $1.2 Billion in damages it's based upon?
Not likely.. Call it a shakedown of Bejing (and I'm sure that the Chinese believe it is), but they created this problem and permitted the theft of IP from AMSC. I also believe, in order to save face, they do not want to permit Sinovel to go Bankrupt.. IT would be an admission of guilt on their part... A Chinese company driven into Bankruptcy because of a criminal conviction in a US Federal Court over IP theft? Nope..
So my logical analysis of the legalities here suggest that the full damages will be awarded to AMSC, and the Quadruple Federal fines (payable to the US Gov't) will be extracted from the IP theft related tariff "slush fund"..
IF Trump fails to act on AMSC's behalf, they immediately send a signal to every other US company that Trump will not prevent IP theft by China, and that they cannot expect to receive any compensation when it does occur.
And for me, personally, it would seriously undermine my support for Trump.. SERIOUSLY.. and not just because I'm placing a bet on an investment in AMSC.
The question I have is whether there are OTHER IP Theft related cases pending against Chinese companies in any Federal Courts? |
