Hong Kong company sues Nashua firm over GTAT suit allegations


A Chinese company wants Advanced Renewable Energy Co. to return a $9.5 million deposit because the Nashua-based firm allegedly did not inform it of its intellectual property battle with Merrimack-based GT Advanced Technology.The suit, filed last week in U.S. District Court in Concord by Hong Kong Juno International Company Ltd., moves a nasty local battle between two companies founded by entrepreneur Kedar Gupta into the federal and international arenas.ARC agreed in July 2011 to provide Hong Kong Juno with a furnace so that its subsidiary, Anhui Kanglan Optoelectronics Co., could produce sapphire crystals used to make LED cells, according to the lawsuitTwo months earlier, in May 2011, GTAT filed suit in Hillsborough County Superior Court against ARC over that very technology.GTAT's suit, filed by subsidiaries GT Crystal Systems and GT Solar Hong Kong, charged that ARC had obtained the technology from Chandra Khattak, who used to work at Crystal Systems Inc., a Massachusetts firm that GT Solar -- GTAT's predecessor firm -- acquired.Gupta co-founded GT Solar in 1994 and led the company as CEO until retiring in 2006. He founded ARC Energy the following year, while he still held a substantial stake in GT Solar.At that time, GT Solar's sole focus was on developing and distributing equipment to make solar cells, but that changed in July 2010 when GT Solar acquired Crystal Systems. The acquisition put Gupta's former company in direct competition with his new company, ARC Energy.In July 2011, Gupta and ARC countersued, claiming that its technology is different from and superior to Crystal Systems', and that GT Solar was making "knowingly false and defamatory statements" in an attempt to "destroy ARC Energy," as well as to retaliate against Khattak for demanding stock options.The New Hampshire suits are still in the discovery stage.In its federal suit, Hong Kong Juno says it was not aware of the legal auctions when it signed its contract, it said presupposed that ARC had the right to the technology to meet specifications."ARC owed a duty to disclose and failed to disclose that it was not the intellectual property owner of the technology and actively concealed a lawsuit that seeks, among other things, to prevent ARC from using the intellectual property," says the suit. Because of the suit, Hong Kong Juno says, it had "reasonable grounds for insecurity with respect to whether ARC can perform its contractual obligations."In addition to asking for its money back, with interest, Hong Kong Juno asks the court to rule that "ARC has engaged in fraud sufficient to render the contract void."ARC would not comment on the suit, said its attorney Dan Lyman, except to say that the allegations were "completely groundless." -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW
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