A recent decision from the US shows the importance of IP in the context of renewable energy

The decision (Siemens Gamesa Renewable Energy A/S v. General Electric Co, U.S. District Court for the District of Massachusetts, No. 1:21-cv-10216) also highlights the potential that IP rights such as patents have to allow those in the field to protect market positions including by way of injunctions to block infringing products (turbines in this case) off the market. As the push for net zero continues, we anticipate that we will see an increasing number of IP disputes in this space. However, this decision also raises interesting policy questions around the extent to which the courts will allow IP holders to force infringers off the market where doing so would adversely affect the development of renewable energy projects in the context of the climate crisis. In this case the judge allowed carve-outs from the injunction in order to allow continued work aimed at combatting climate change.

In more detail:

  • Siemens Gamesa (SGRE) successfully sued GE for infringement of a patent relating to the design of wind turbine rotor hubs. (The invention is around anticipating and resolving problems in larger turbines specifically by reducing load on the rotor hub, which allows for a bigger motor and more power and reduced failure risk).
  • This decision was about whether or not GE’s infringing turbines should be barred from the US market for the remainder of the patent’s life by way of an injunction.
  • Lots of the discussion focussed on whether Siemens could be adequately compensated financially if GE were allowed to stay on the market – the court sided with SGRE for various reasons, including the fact that SGRE had lost a considerable portion of its market share to GE, as well as the fact that if GE remained on the market SGRE would lose out on more than just turbine sales but also unquantifiable revenue from servicing, maintenance and replacement parts.
  • So, broadly speaking (subject to what follows) GE’s infringing turbines have been blocked from the US market for the foreseeable future (SGRE estimated that in the remaining life of the patent GE would sell up to 600 turbines).
  • Interestingly, though, the judge did not award a blanket injunction. Instead, they said that there should be carve outs to permit GE to continue its work on the Vineyard Wind and Ocean Wind projects in light of the fact that that “the world is currently facing a rapidly developing climate crisis” which was described as a public interest of key concern by the judge. So, given the investment in and complexity of the Vineyard and Ocean projects to date, GE should be permitted to continue work on them as “delaying largescale wind energy projects can impact efforts to combat [the climate crisis]”.
  • The judge also took into account the potential job losses if GE’s participation in these projects were to be halted.
  • However, SGRE will still be able to seek financial redress for the GE projects which do go ahead (e.g. by way of a royalty, which the jury had already accepted should be $30,000 per MW).
  • Clearly, it remains to be seen to what extent this sort of public interest argument is adopted more broadly (and whether it survives an appeal, if there is one).