Siemens Gamesa vs General Electric: Big Royalty Awarded after a Patent Win

August 4, 2022
- Intellectual Property (IP)

A federal court of Massachusetts judge’s ruling that General Electric (defender) had infringed one of Siemens Gamesa’s (plaintiff) patents for the project’s turbines, which would be employed in the project, might result in an additional cost of $24 million for America’s first commercial offshore wind farm, Vineyard Wind.

A Boston jury determined that GE violated one of Siemens Gamesa’s patents relating to the structural support of big offshore wind turbines, and Siemens Gamesa said the business was given a royalty rate of USD 30,000 per megawatt.

The Legal Action

On September 29, 2020, Siemens Gamesa filed two distinct claims for their patents 9,279,413 (the “413 Patent”) and 8,575,776 (the “776 Patent”), starting the legal dispute. The ‘413 patent discloses a wind turbine with a stationary main shaft structural configuration which allowed the turbine to be scaled-up in size and produce more energy. And the second invention ‘776 patent discloses a technique for raising direct-drive performance by better cooling and maintenance operations.

Targeted Product

In 2018, GE announced the wind turbine “Haliade-X” which is the world’s most powerful and largest offshore wind turbine with the rating 12 MW generator rating. The Haliade-X 12 MW will generate up to 67 GWh per year which is more than enough worth of renewable energy to provide up to 16,000 European families. The Haliade-X 12 MW has a 260-meter height above the water, a 220-meter rotor, and 107-meter-long blades which were created and constructed by LM Wind Power and will be the largest offshore blades to date.

Jury Decision

The Haliade-X wind turbine type from GE was found to have violated the ‘413 which discloses a wind turbine with structural configuration support but dismissed ‘776 infringement allegations against the direct-drive augmentation technique, by the jury of Massachusetts.

The jury decided that Siemens Gamesa had “proven its claim to a reasonably reasonable royalty rate,” which it set at $30,000 per MW, even though it ruled that neither GE nor Siemens Gamesa had intentionally violated the patent.

The Settlement

General Electric (GE) must pay a historically high royalty cost of $30,000 per megawatt when its new Haliade-X wind turbine employs the components of Siemens Gamesa Renewable Energy’s (SGRE) ‘413 patent, according to jurors in the US District Court in Boston, Massachusetts. The one-time cost, which may be as high as $24M USD, is due within 90 days after the turbine’s commissioning.

The Expansion of US Patent Laws

Judge William Young in the US District of Massachusetts denied GE’s motion for dismissal on the grounds that no violation would take place in US territory, ruling that wind turbines to be installed in federal waters beyond the 12 nautical miles “territorial sea” will still be within US territory as defined by the Outer Continental Shelf Lands Act (OCSLA) and are still subject to US patent law.

According to statistics from IntelStor, patent litigation has been more prevalent in the renewable energy sector as a business tactic to raise prices and harm rivals’ brands, costing the US wind industry alone $5.3 billion between 2005 and 2017.

Future Projects in Questions

The $3 billion, 800 MW Vineyard Wind project, which is being built off the coast of Massachusetts and is the country’s first offshore wind farm of a commercial scale, has drawn attention because of the “413” portion of the ruling. It’s scheduled to be put into service in 2023. Vineyard Wind, the project’s owner and developer, has a contract with GE for 62 Haliade-X 13-MW turbines that have not yet been deployed.

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