(Updates with comment from analyst in third paragraph.)
Feb. 6 (Bloomberg) -- American Superconductor Corp., a maker of wind-turbine parts, will appeal a decision by a Chinese court to dismiss a lawsuit against Sinovel Wind Group Co., which was once its largest customer.
A court in Hainan Province dismissed American Superconductor’s claim for $200,000 in damages related to copyright infringement, the smallest among the three civil suits seeking more than $1.2 billion from Sinovel, the Devens, Massachusetts-based company said today in a statement.
Investors in American Superconductor are skeptical that provincial courts in China will rule against China’s largest wind-turbine company, said Craig Irwin, an analyst at Wedbush Securities Inc. in New York who has a “neutral” rating on the shares.
“It’s no surprise that Sinovel is getting what they want at these lower courts,” Irwin said today in an interview. “Things may improve with the court in Beijing.”
The Hainan court dismissed the suit after Sinovel said it should be heard instead by the Beijing Arbitration Commission.
American Superconductor said the dismissal was “not altogether unexpected” and the company is appealing the ruling.
American Superconductor contends that Sinovel is illegally using its intellectual property and is seeking damages. A former American Superconductor employee pleaded guilty to charges including economic espionage in an Austrian court in September and said Sinovel paid him to pass proprietary information to the Chinese company.
Sinovel stopped accepting or paying for contracted shipments from American Superconductor March 31.
Investors don’t expect a ruling that will help the company’s top line anytime soon, Irwin said
American Superconductor fell 4.9 percent to $5.50 at 10:36 a.m. in New York. Before today, the shares had dropped 80 percent in the past year.
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