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Appeal of US ban on imports filed

An appeal has now been filed against the decision by the US International Trade Commission (ITC) banning Enercon E30 and E40 turbines from the United States. The appeal, filed in late December in the US Court of Appeals for the federal circuit, is on behalf of German wind turbine manufacturer Enercon GmbH and US wind plant developer New World Power Corp.

The ITC issued its ban after Kenetech Windpower filed a complaint in 1995 alleging that Enercon and New World were infringing its variable speed technology patent in the US by importing Enercon turbines. After about a year and a half the ITC finally ruled in favour of Kenetech, which had in the meantime filed for bankruptcy protection. The appeal of the ITC ruling, filed December 20, will probably not be heard until late May or early June, say Enercon's lawyers.

The possibility of a settlement or of the Enercon ban being lifted anytime soon seems even more complicated than before. Kenetech's variable speed patent is now owned by Trace Engineering Inc, of which Zond Corp and thus now Enron Corp is a sizeable -- but apparently minority -- financial backer. Trace has agreed to indemnify all of the liabilities connected to Kenetech's patent disputes beyond the first $25,000.

Separate lawsuit

It has not been clear at all how this affects the ITC ruling or the totally separate lawsuit filed by Kenetech alleging patent infringement by Enercon and New World. This was filed in the US District Court in San Jose four months before its complaint was filed at the ITC. The lawsuit has been brought to a halt by Kenetech's bankruptcy.

Enercon points out that ITC rulings are not usually binding on the US Court of Appeals for the federal circuit, where it has filed its appeal and where questions of alleged patent infringement are usually heard first. It also notes that, were Enercon already manufacturing turbines in the US, an ITC ruling would have no impact on the manufacturing activities or sales of those turbines. A court injunction would have to be obtained for a federal judge to stop such activities.

Never a sale

Enercon argues that the ITC has no jurisdiction over patent infringement or to ban a particular good from being imported. The ITC can only make such a ruling if there has been an actual import, or a "sale for importation," both of which Enercon hotly denies. Although there was some correspondence over a potential sale of turbines bound for a project in Texas, Enercon says there was never the "transfer of title" -- either orally or written -- required by commercial codes.

Enercon also says that no other country except the US allows non-judicial bodies such as the ITC to rule upon such matters, which it says is inconsistent with treaties of friendship between US and trading partners such as the EC or Japan.

Lastly, it notes that the European Patent Office has refused resolutely to grant a patent to any entity corresponding to the one held by Kenetech which the ITC rules that Enercon's technology infringes. And it says that the state of "prior art" suggests that many of the patents pending in European countries on variable speed technology will not be granted.

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