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Business: Trade body reviews patent decision

New twist in US technology row.

Victory could be short-lived for General Electric (GE), which won the first round of its patent dispute with Mitsubishi Heavy Industries (MHI) over wind turbine technology in the United States. The full US International Trade Commission (ITC) has now decided to review an ITC judge's preliminary decision, issued in August. If it overturns the preliminary decision, imports of MHI's 2.4 MW turbine to the US would no longer be illegal. The turbine is a competitor to GE's 2.5 MW model, to be introduced to the American market in 2010.

ITC Judge Carl Charneski, in his preliminary decision, ruled that the MHI 2.4 MW turbine violates three of GE's patents - for control of variable speed drives and for two types of low-voltage ride-through (LVRT) technology, used to keep generators online during momentary dips in grid voltage. Furthermore, MHI and Mitsubishi Power Systems Americas are illegally importing and selling a turbine that violates GE's patents, according to the ruling. Charneski also found, however, that GE is not using one of the LVRT patents in wind turbines in the US, so Mitsubishi is allegedly breaking import laws for only the other two.

Charneski further found that GE had not named a co-inventor of the earlier 985 LVRT patent, a breach of patent laws. The newly named co-inventor, Thomas Wilkins, is a California-based engineer who did not work for GE when the patent was applied for in 2003 (Windpower Monthly, October 2009).

Wilkins appeared as a factual witness for MHI at the ITC trial in May. Both Mitsubishi and the ITC Office of Unfair Import Investigations, which represents the public interest, have argued that the ITC should throw the case out because Wilkins is not named as a "co-complainant" with GE.

Appeals court

Charneski's preliminary ruling could now be completely overturned or altered. The five-member ITC is to rule by December 7. If it finds in favour of GE, President Barack Obama's White House then has 60 days to review the case. During that two-month period, MHI's 2.4 MW turbines could only be imported once a bond has been posted with US Customs. MHI's legal recourse, if it loses the ITC case, would likely be to pursue it in the US Appeals Court, which legal experts say could take one to two years.

Hundreds of millions of dollars are at stake. GE has earned money on its wind technology patents in the US - including the intellectual property in dispute - by licensing them for $25,000 per installed megawatt. MHI could choose to buy a licence or reconfigure its 2.4 MW machine, specifically the MWT92 and MWT95 models and a later model known as EPSS. The 985 LVRT patent at the core of the dispute does not expire until January 2023.

Roger Taylor, Mitsubishi's lead patent lawyer in the case, welcomes the ITC's decision: "The (preliminary ruling) contained a number of errors, and this decision indicates that the commission agrees that it needs a closer look." GE, commenting publicly on the case for the first time, says it will continue to vigorously protect its technology, stressing that strong intellectual property rights promote investment, foster innovation and encourage commercial deployment.

GE has invested billions of dollars in its wind technology, says Vic Abate, head of GE's wind division, adding that protecting the investment is a strategy that makes sense.

GE regularly licences its technology, licensing a suite of its rights to competitors in the US for as much as $25,000 per installed megawatt.

On hold

Meantime, the GE lawsuit against MHI in the federal court in Texas, for alleged violation of the same patents, has been held until the ITC case is resolved. The three major US wind farms that use the Mitsubishi 2.4 units are in Texas and, while the ITC cannot order MHI to pay compensation, GE is seeking royalties and "triple damages" from MHI and two of its subsidiaries through the US District Court in Corpus Christi.

Mitsubishi is also in a joint venture to make blades in Mexico, in Ciudad Juarez just across the Texas border. And the company has said that it will soon confirm its plans for a $105 million manufacturing plant in the US or Canada that would double its global wind turbine production capability.

The highly political patent case is being covered by the US business press, and the states of Arkansas and Oregon are taking a growing interest in wind power development. Two senators, the Democrats Blanche Lincoln from Arkansas and Ron Wyden of Oregon, have written to the ITC asking it to review its preliminary decision, citing public interest and "our nation's increased reliance on electricity from wind, the projected shortage of turbines, and what we understand to be the disparate views by (Charneski and ITC staff)".

In question

ITC commissioners are asking GE, MHI and the ITC staff for briefings on various aspects of how broadly GE's patents should be interpreted and on whether the ITC should address the issue of inventorship "to determine whether GE has standing to assert the 985 patent". Specifically, the commissioners are asking for arguments on two technical issues: does one disputed claim of the 985 patent mean that power is shunted both away from the inverter and the generator rotor, as GE claims; and does the patent mean that the shunt circuit can be located within the inverter, also as claimed by GE. MHI and the ITC staff have generally argued that the three patents should be interpreted more narrowly than GE is doing.

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