Vestas closes down GE patent row, further opens US market

While it is clear that Vestas has paid GE an unspecified amount of cash to close down the patent legal action due to come before a US court this summer, it is unlikely to be of the size that will make any difference to either company’s finances.

What GE has done is try to protect its home market by drumming up an insignificant patent, which it almost certainly would never have been awarded in any other country other than the US.

The patent relates to keeping a wind turbine attached to the grid when a power surge or low voltage dip happens. Both companies clearly had applied for very similar patents – one in the US and the other in Europe and they were both granted. GE used this patent to push back against Mitsubishi Heavy Industries and extracted a $170 million payment and a ban on Mitsubishi operating in the US, though they later settled that action.

These patents may be largely obvious and well understood throughout the world wind turbine world, but what has often happened in US patent actions is that before 2013, US patents were filed with an “invention date” which could be backdated to when it was invented, while European and the rest of the world’s patents had the date of their filing attached to them. Over the past 30 years it has been a key strategy in protectionism of the US market to patent a widely distributed European patent in the US and claim to have invented it earlier. We are not saying that this is what happened here, but we have covered about 100 patent cases and this has often led us to disillusion that the two patent systems were so at odds for so long.

However given that Vestas has over 560 patents in Wind Turbines filed in the US, it was better able to defend itself than Mitsubishi and instead of waiting for the court to rule, GE has taken a deal now.

Vestas remains the largest wind turbine manufacturer in the world, and GE sits in fourth place behind Siemens Gamesa and China’s Goldwind – and its fortune of late has been distinctly weak – and its future rests of the launch of its new Haliade-X 12 MW wind turbine design, which dwarfs everything in the market.

This week the two reached an amicable settlement of all disputes related to multiple patent infringement claims in the US, resulting in the discontinuation of the case pending in the US District Court for the Central District of California as well as all other pending proceedings.

The case goes back to July, 2017, when GE said that Vestas infringed GE’s US Patent No. 7,629,705 with several of its wind turbines. Vestas has always said it felt the lawsuit was without merit. What GE would have been most pleased with is a cross-license to all the Vestas patents, so that Vestas is now unable to sue using one of its many international patents, in the US or elsewhere. Had GE been under pressure in court, in the way Vestas has been in this case, it may have been in a more precarious position with developers, because of the weight of intellectual property held by Vestas.

Other US patents included in the case were GE’s No. 6,921,985 and Vestas’ two counterclaims against GE on US Patents No. 7,102,247 and No. 7,859,125.

The mobile phone industry has seen Californian courts in particular used to delay overseas players from having fair access to the US markets, with cases that were finally settled out of court.