United States

United States

Own goal? GE's lawsuit could backfire, IP expert warns

Vestas and Nordex may be the main beneficiaries of GE's legal action against SGRE

GE Renewable Energy has also pursued patent litigation against other wind power rivals in the US
GE Renewable Energy has also pursued patent litigation against other wind power rivals in the US

The US technology giant this week filed a complaint with the US International Trade Commission seeking to block SGRE from the US and claiming that its European counterpart is infringing its IP.

But if GE is successful it may prompt the developers behind SGRE’s 5.1GW onshore order book in the US to buy cheaper turbines from rival manufacturers such as Vestas and Nordex instead, according to Intelstor CEO and IP expert Philip Totaro.

Vestas – which held the second highest market share (32.9%) in the US last year, behind GE (45.4%) – is poised to leapfrog GE, Totaro claimed, with many wind farms featuring turbines from the OEM's 2.X, 3.X and 4.X platforms.

GE filed the complaint with the US International Trade Commission earlier this week, arguing that SGRE is infringing its IP for "low-voltage-ride-through and zero-voltage-ride-through technologies" .

These technologies enable variable-speed turbines to maximise power capture in fluctuating wind speeds.

GE also called for a cease and desist order to be imposed upon SGRE, restricting the manufacturer’s ability to participate in the US wind market.

GE Renewable Energy, has led the US market for the past two years, according to the American Wind Energy Association’s annual reports. Meanwhile, many of its competitors have, for years, been forced to absorb license fees into their gross margins for every turbine sale due to GE filing similar suits against its rivals. 

These higher Capex (capital expenditure) costs for Nordex, SGRE and Senvion have enabled GE to extend its lead in the US by driving up the sales prices of its competitors’ turbines, while they were able to achieve greater economies of scale in production, Intelstor CEO Philip Totaro explained.

But GE’s latest move may compel the project developers behind SGRE’s 5.1GW US onshore order book to look at Vestas and Nordex as alternative suppliers, he added – especially as Vestas and Nordex’s turbines tend to be cheaper than GE’s.

Totaro said: “If GE is attempting to drive up the cost of SGRE turbines using this IP royalty as ‘tax’ on every turbine unit sold, they may end up with a scenario in which developers can look to Nordex Acciona or Vestas for a less expensive option, since they both have the GE IP royalty already in place and factored into their cost."

SGRE denies the allegation and says it will defend itself against any exclusion order blocking it from importing wind turbines and components into the US.

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