Green Patents: International Trade Commission terminates investigation into allegations of infringement of wind turbine technology patents
Co-authored with Cyrus Frelinghuysen.
On January 8, 2010, the US International Trade Commission (ITC) issued a notice of its decision to terminate a Section 337 investigation into whether Mitsubishi Heavy Industries Ltd. and two of its subsidiaries had infringed three General Electric (GE) patents related to wind turbine technology. GE plans to appeal the ITC’s decision to the U.S. Court of Appeals for the Federal Circuit. The investigation stemmed from a February 2008 GE complaint with the ITC. GE claimed that wind turbines imported by Mitsubishi infringed GE’s U.S. Patent Nos. 5,083,039; 7,321,221; and 6,921,985.
On August 7, 2009, the administrative law judge assigned to the investigation issued an initial determination finding a violation of Section 337. On review, however, the ITC commissioners reversed that determination. In its opinion, the ITC found that all three of GE’s patents were valid but that there was no infringement. In addition, the ITC concluded that GE had not shown the existence of a protectable domestic industry with respect to one of the patents. GE is planning to appeal the ITC’s decision to the Federal Circuit. In addition, GE recently filed a complaint against Mitsubishi in the US District Court for the Northern District of Texas alleging infringement of two more of GE’s 148 patents relating to wind turbine technology.
These cases involve two major players in the rapidly expanding wind turbine industry. According to a June 2009 report issued by the ITC, from 2003 to 2008, imports of wind-powered generating sets increased more than 600 percent to $2.5 billion annually, and GE’s domestic wind turbine sales rose by over 300 percent during the same period. In 2008, GE was the leading wind turbine manufacturer in the United States, with a 43 percent market share, while Mitsubishi was ranked seventh. Globally, GE was the world’s second largest supplier of wind turbines, with a 16.7 percent market share, while Mitsubishi was ranked eleventh, with a 2.6 percent market share.
The ITC investigation attracted considerable attention from lawmakers, in part because of the US government’s desire to promote the development of clean energy technology and the use of renewable energy. Seventeen members of Congress wrote to the ITC prior to the issuance of its final determination. Senators Blanche Lincoln and Mark Pryor of Arkansas, where Mitsubishi plans to construct a $100 million wind turbine manufacturing facility, wrote a letter stating, “[p]romoting a diversity of technologies in the wind energy sector will be essential if the nation is to achieve the Administration’s goal of developing 20 percent of our electricity from wind by 2030.” President Obama has made reference to achieving such a goal, which was the subject of a July 2008 US Department of Energy report entitled 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply. Meanwhile, Senators Charles Schumer and Kirsten Gillibrand of New York, where GE recently opened its $45 million Renewable Energy Global Headquarters, wrote a letter warning that: “Any efforts that weaken intellectual property right protections relating to clean technology pose a substantial competitive risk to U.S. businesses and workers and inhibit the creation of new green jobs and the transition to a green economy.”
The ITC’s investigation is another example of what appears to be a steady increase in litigation over clean energy patents. Last year we reported on a lawsuit between Paice LLC and Toyota Motor Company over patents related to hybrid electric vehicles. Paice has since filed a complaint with the ITC alleging that Toyota has violated Section 337 by importing hybrid electric vehicles and components that infringe Paice’s U.S. Patent No. 5,343,970. The investigation is Certain Hybrid Electric Vehicles and Components Thereof, Inv. No. 337-TA-688.
New York Attorney General Andrew Cuomo establishes Wind Industry Ethics Code
*Article updated on 11/18/2009.
On July 15, 2008, New York Attorney General Andrew Cuomo announced an “investigation into two companies developing and operating wind farms across New York state amid allegations of improper dealings with public officials and anti-competitive practices.” While the investigation appears to remain underway, Mr. Cuomo announced on October 30, 2008 that the two wind-farm companies under investigation — Noble Environmental Power, LLC (majority-owned by JPMorgan Partners Fund) and First Wind (formerly known as UPC Wind) — have signed the Attorney General’s new Wind Industry Ethics Code. Mr. Cuomo’s office characterized the Wind Industry Ethics Code as
a result of the Attorney General’s investigation into, among other things, whether companies developing wind farms improperly sought land-use agreements with citizens and public officials, and whether improper benefits were given to public officials to influence their official actions relating to wind farm development. Both Noble and First Wind fully cooperated in the inquiry and their assistance was instrumental in developing the Code of Conduct that is being announced today.
Mr. Cuomo is also establishing an Advisory Task Force to monitor wind companies to ensure that they comply with the Code of Conduct embodied in the Wind Industry Ethics Code.
The generation of electricity from wind has received increasing attention in recent years, boosted by the public profile of T. Boone Pickens and his “Pickens Plan”. The State of New York has been at the forefront of the development of wind power plants, tracing the roots of that effort at least as far back as then-Governor George E. Pataki’s January 8, 2003 announcement that within ten years, the state would draw 25% of its electricity supply from wind power and other nonpolluting sources. The state’s experience with wind power, however, has not been without controversy, including reports of corruption and intimidation.
In addition to fleshing out the enforcement and compliance role of the new Task Force, the Wind Industry Ethics Code prohibits conflicts of interest between municipal officials and wind companies and establishes a number of public disclosure, education and training requirements. Among other things, the Code
- Bans a wide range of employment, compensation, gift-giving and other benefit-transfer arrangements between wind companies and municipal employees or their relatives
- Prohibits wind companies from soliciting, using, or knowingly receiving confidential information acquired by a municipal officer in the course of his or her official duties
- Requires wind companies to display on a Web site, disclose to the municipal clerk and publish in a local newspaper the names of all municipal officers or their relatives who have a financial interest in wind farm development
- Obligates wind companies to conduct a seminar for officers and employees about identifying and preventing conflicts of interest when working with municipal employees
For the time being, Noble Environmental Power, LLC and First Wind are the only two signatories to the Wind Industry Ethics Code. Mr. Cuomo, however, expects additional companies to sign on as wind farm development continues: as he observed in his October 30 press release, “I commend Noble and First Wind for taking the lead by adopting this Code, and we fully expect other companies that want to develop wind farms in New York to follow suit.”
The effect of recent economic developments on the wind farm industry’s plans — in New York and across the country — remains to be seen. According to a November 11, 2008 Reuters report, Mr. Pickens has ordered $2 billion worth of wind turbines, which are due to be delivered starting in 2010. In a November 12, 2008 article, The Arizona Republic reported that Mr. Pickens “said that his Texas wind farm is on hold because natural-gas prices have dropped but that his plan for wind power and natural-gas vehicles is still viable to reduce foreign oil imports.”
