Combatants call truce in patent war -- End of trans-Atlantic dispute to allow technology to progress

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German turbine manufacturer Enercon has accepted a settlement of its long running dispute with America's General Electric Company over infringements of wind power technology patents held by both parties. But the battle over General Electric's European patent on variable speed turbine electronics continues.

On May 10, Enercon and GE, which runs a wind turbine manufacturing division within GE Energy, jointly stated they had settled their patent rights dispute by agreeing a "cross licence with worldwide and long term application." A cross licence is a standard legal practice employed by companies holding interdependent patents, according to the European patent office (EPO) in Munich. "It's employed in situations where I can't exploit my patent without infringing yours and vice versa," says the EPO's Rainer Osterwalde. "A cross licence frees each company from any infringement -- that is, it pre-empts any patent infringement. Competitors active in the same field use it where they have solutions that are very close, where one couldn't function without the other," he explains.

Enercon and GE say all court appeals in connection with the patent infringement have been withdrawn and "existing decisions" rescinded. "Both companies will independently continue their businesses of manufacture and sale of wind turbines to make their contribution to a sustainable energy future," they state.

Trade commission ban

The reference to rescinded decisions infers that either or both companies will act to have an "exclusion order" issued by the United States International Trade Commission (ITC) in 1996 (Windpower Monthly, November 1996) repealed. The order banned imports of specific Enercon technology into America. Enercon lost a major order as a result of that ruling and since then has not attempted to market its turbines in the US. Late last month the ITC said it had not received a petition from either company to have the ban removed.

GE Wind's Andreas Wagner says several patents owned by both companies are involved in the cross licence agreement. "We do not want to block ourselves for years with these legal cases. This is what GE knows from other industries. It does not make sense," he says. "It's a sign of the industry growing up rather than blocking yourselves and the technology from getting better. We want to bring the industry forward." Enercon declines to comment.

Court cases over patent infringement that are now being dropped include suits filed by GE Energy 18 months ago for breach of its provisional European patent against an Enercon sales agent in the UK, breach of a patent in Canada similar to that granted in the US (Windpower Monthly, May 2003) and Enercon's law suit filed last year against GE over infringement of Enercon patents (Windpower Monthly, July 2003). Whether the agreement with Enercon is a tacit indication by GE that it will not challenge the use of any variable speed wind power technology employed in the US or elsewhere remains to be seen.

In Canada, GE was suing Enercon and its Pincher Creek-based agent, Wind Power Inc (WPI), over the only Enercon machine operating in North America, a 600 kW turbine in Alberta. WPI's Dale Johnson says he has several projects in development using Enercon turbines, including the 100 MW Castle Rock Ridge wind farm in southern Alberta. "This certainly makes it a whole lot easier," he says.

While Enercon and GE have settled their bilateral fight over patent infringement, the battle over GE's disputed European patent continues unabated. In June 2003 the EPO rejected GE's patent on variable speed electronics in ten European countries, with written notification to GE dated August 21. GE appealed the decision on October 21 and submitted its statement of grounds on December 23.

Since then, 23 pieces of correspondence have been registered at the EPO between the patent office, GE and the ten opponents to the patent, including Enercon. While some opponents simply rejected GE's statement of grounds, both Alstom, a major energy equipment supplier, and Vestas applied for two month extensions to the June 21 deadline for submissions. As a result the EPO has extended the deadline for everybody.

Examination of the submissions by the EPO's Technical Board of Appeal could take another three years. Meantime, the patent remains at the grant procedure stage and is technically enforceable, but in practice very weak, according to the EPO. If the appeal board revokes the patent, it will then be "finally dead."

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