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United States

Opinion: Why Siemens Gamesa's patent win against GE could be bad for offshore wind

Patents serve to protect and reward innovation, but an injunction against GE selling its Haliade-X turbine in the US could push up prices for developing offshore wind farms.

A global settlement with cross-licensing would better serve the interests of the wind industry, argues Georgina Ainscow
A global settlement with cross-licensing would better serve the interests of the wind industry, argues Georgina Ainscow

A US court has issued an injunction against GE Renewable Energy that will prevent the company from making, importing, selling or installing its Haliade-X wind turbines in the US, or within 200 nautical miles of the US coastline, with the exception of two offshore wind farms already under construction.

The decision concerns US patent no 9,279,413 (the ‘413) owned by Siemens Gamesa (SGRE), which is held to be valid and infringed by GE’s Haliade-X 12, 13 and 14MW offshore wind turbines. If upheld in the event of an appeal, the injunction could last until the patent expires in 2034.

SGRE’s patent concerns the bearing that couples a turbine’s rotor and blades to its main shaft. This bearing is provided as part of an annular member that protrudes into the interior of the rotor hub, “axially inwards into the interior from a side of the hollow shell configured to face, when the wind turbine is assembled, the stationary main shaft of the wind turbine”.

Read: Siemens Gamesa wins GE offshore wind patent case in US

This arrangement, according to SGRE, allows for larger turbine blades to be supported, which in turn allows the wind turbine to generate more energy. Although seemingly straightforward, patent examiners in the US, Europe and China have found the technology to be innovative enough to grant patents, with the US patent now being upheld by the US courts.

While the judge ordered a carve out that allows for installation of GE’s Haliade X turbines at two wind farms that are already under construction, this provision is strictly limited and subject to steep royalty fees.

SGRE has its own 14MW wind turbine, the SG 14.0-222 DD, while Vestas is working on a prototype of its V236-15.0MW. However, a reduction in competition can drive up costs, with a knock-on effect on energy prices. And wind farms looking to come online in 2023 may have to choose between delay or resorting to smaller wind turbines with lower power ratings.

It is likely that GE will appeal the decision, and corresponding litigation has also been launched in the UK, meaning that the industry will face uncertainty over this issue for some time to come. With an urgent need for clean, home-grown energy to combat the climate crisis and dependence on Russian oil and gas, it’s tempting to conclude SGRE should have been asked to issue GE with a licence. However, in calling for an injunction, SGRE is making legitimate use of the patent system.

Protecting innovation

Though not perfect, patents were established to drive forward technological progress. They reward innovators with a limited-term monopoly to exploit their technology if they can prove that it is new and inventive. We cannot achieve net zero by 2050 with currently available technology, so continued investment in innovation is critical.  

A monopoly that effectively prevents any competitor entering the emerging US wind market would clearly be a very significant reward for SGRE. However, the company would argue that it is proportionate to the time, ingenuity, money and risk that has been invested. GE has stated its intention to consider other design options which do not infringe SGRE’s patent. While this will incur costs for GE, it will also spur continued innovation, potentially resulting in even bigger and better turbines.

It also has to be remembered that GE itself is no stranger to the patent system, and is simultaneously asserting its own patent rights for variable speed wind turbine generators against SGRE.

Judge Young, the presiding judge in the US decision, has said the parties should reach a global settlement and cross-licence their patents. It could be the ideal solution, given both parties own valuable patent rights. With cross-licencing, both OEMs would gain commercial reward for their patents, while retaining the freedom to install and develop their own products.

A settlement would also serve the interests of the wind industry. It would remove legal uncertainty and avoid unnecessary delays. Diversity in the market should also drive down costs.

Nobody can confidently predict how this will play out. However, with domination of the rapidly evolving offshore wind industry at stake, these two key players seem likely to continue their battle for market share for some time to come.

Georgina Ainscow is a partner at law firm Reddie & Grose

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