Ruling in GE v Siemens Gamesa Patent Case Exposes US Offshore Wind to 'Billions of Dollars of Risk'

A federal court in Massachusetts rejected GE's request to throw out an offshore wind-related patent infringement action brought by Siemens Gamesa, saying patent law extends the full breadth of the outer continental shelf (OCS) in a ruling that an expert analyst said should put the whole US offshore wind industry on alert for potential litigation.

Siemens Gamesa is accusing GE of infringing on two patents with its giant Haliade-X 13MW offshore wind turbines, but GE argued patent law only extends 12 nautical miles from the coastline, in what comprises the "territorial sea", and that as its machines would be installed outside this zone no such infringement would take place in the US.

Judge William Young in the US District of Massachusetts ruled, however, that wind turbines to be installed in federal waters beyond 12nm will still be within US territory as defined under the Outer Continental Shelf Lands Act (OCSLA), which governs offshore energy development, including wind.

"Even if you're not in US territorial waters, if you have things that are being installed by US resources and more importantly, if it is benefiting the US in some way, whether it's an oil & gas or an offshore wind park that's grid connected, then US patent law applies," Philip Totaro, CEO of specialist renewable energy analyst firm IntelStor and a leading expert on intellectual property in the industry told Recharge.

The implications for the industry could reverberate for decades, Totaro said, noting that the litigiousness that has characterised the onshore wind industry, which IntelStor says saw over $5.3bn in losses between 2005 and 2017 due to patent lawsuits, looks set to migrate offshore.

"A lot of the basic technologies, the core IP [in offshore wind] has already been patented, and there are companies that are sitting on their IP rights just waiting for a competitor to start infringing," Totaro told Recharge.

Legal jeopardy in the sector could pose another obstacle preventing the nation from meeting the Biden administration’s target of 30GW of offshore wind by 2030.

"Whether you're selling wind turbines or developing projects, there's billions of dollars at risk."

International IP battle

The current lawsuit by Siemens Gamesa is only the latest battle in an ongoing wind energy patent war that has been waged by the two industrial groups for years, in the US and abroad.

This past January the US International Trade Commission ruled for GE in a lawsuit alleging that Siemens Gamesa infringed on GE's patents for ride-through technologies that protect wind turbines from fluctuations in power.

GE is also suing Siemens Gamesa for patent infringement for onshore turbine technologies in the UK and Germany.

Siemens Gamesa filed its current lawsuit against GEin October 2020 in Florida, the location of its headquarters, but the suit was moved to the federal district court in Massachusetts due in part to the fact that the first deployment of GE's Haliade-X will be at the 800MW Vineyard Wind farm off the coast of Martha's Vineyard.

Vineyard Wind, owned by a joint venture including Copenhagen Infrastructure Partners and Avangrid, the first US project to be fully permitted, is scheduled to begin offshore construction of 62 turbine sites next year. The Haliade-X is also contracted for installation at the Orsted-PSEGowned 1.1GW Ocean Wind 1 and Orsted-solo 1.15GW Ocean Wind 2 projects off New Jersey in 2025.

Siemens Gamesa's suit claims that the 13MW Haliade-X infringed on two patents — one for a method of enhancing direct-drive performance, and one for a structural support that enables turbines to be scaled up in size.

"We believe the Siemens Gamesa lawsuit has no merit, and we will vigorously defend ourselves against this action," a GE Renewable Energy spokesperson told Recharge.

A representative for Siemens Gamesa said the company does not comment on ongoing litigation, but in October, 2020, when the lawsuit was filed, Siemens Gamesa said: "As the global leading provider of offshore wind turbines… [Siemens Gamesa] invests heavily in research and innovation to increase efficiency and reduce the levelised cost of energy (LCoE). The protection of intellectual property rights is essential to foster continued investments in innovation."

"It's possible for [the court] to decide that GE’s [infringement] is so egregious that they preclude [GE] from deploying the Haliade-X in the US, but it wouldn't necessarily stop GE from either appealing that, or using different legal mechanisms to wiggle their way out," said Totaro.

Tit-for-tat strategy

Totaro added that the tit-for-tat lawsuits between the two industrial giants are less about IP protection and more about raising the costs of doing business for competitors.

"It's not really about the patent, it's about the commercial strategy that they are trying to employ," he said.

Siemens Gamesa "wants to countersue GE to make sure that the market understands that GE isn't the only one that has IP, and isn't the only one that can enforce their IP," Totaro added. "They need to protect their brand reputation."

The trial started 31 May in the federal court for the District of Massachusetts and is expected to continue for several weeks.

Source: rechargenews.com-Tim Ferry

Editor: IPR Daily-Selly