The import ban is the cornerstone of a dispute over patented technology that appears to be part of strategic efforts by the aggressive US energy giant Enron Corp -- and previously by Kenetech Windpower -- to corner the lion's share of the global grid-connected wind market. Enron owns Zond Corp, which became the largest US wind company when Kenetech Windpower was liquidated after federal bankruptcy proceedings.
The appeals court ruled that a sale did take place in the summer of 1993 between Enercon and New World Power Corp, the ailing company that was to have imported Enercon's variable speed turbines for a 35 MW wind farm in Texas. Counsel for Enercon insists there was never a transfer of ownership for any variable speed wind turbines with the patented technology because no delivery date or price was agreed. The ITC holds that an oral contract, a promise of a future sale, does exist.
At the time, Kenetech Windpower held a patent for the power electronics used for converting electricity from variable speed wind turbines to grid quality. Enercon argues that it had been working on power electronics from before the time of Kenetech's patent and that prior art existed for the technology. Following the Kenetech bankruptcy, the patent was ultimately bought by Zond Energy Systems. Its parents, Zond Corp and Enron Corp, pursued the case before the ITC. The technology is now licensed to Trace Technologies of California, part of the world's largest maker of inverters.
The appeal court also upheld the jurisdiction of the ITC in agreeing to rule on the matter. Enercon's lawyer in the patent controversy, Mary Helen Sears, says the company may well appeal against the decision on jurisdiction within 45 days of the August 12 written decision, the time frame allowed under federal law. "Quite frankly, we believe that it is entirely wrong," she says. "We hope to challenge the jurisdictional ruling because it is contrary to all the law that we know."
She says the ITC is only meant to rule on matters involving goods, and since none of Enercon's turbines or power electronics were ever in the control of the prospective buyer, New World Power, the ITC had no right to take on the dispute. Any appeal will thus focus on the ITC's credibility and on whether it is an appropriate venue for a decision that is altering the pace and location of wind development when it is poised to take off on a global scale.
The patent battle over variable speed wind technology is also proceeding in Europe. Zond and Enron successfully completed the most difficult step in securing a patent for virtually the same power electronics technology from the European Patent Office in February (Windpower Monthly, July 1998).