In addition to the high legal fees and exposure to potentially hefty damages payouts that accompany allegations of intellectual property infringement, such lawsuits can also be dark clouds over defendants, hampering their ability to do business.
A salient example of this in cleantech is the news that Mainstream Renewable Power (MRP) has ditched Chinese wind turbine maker Sinovel and is looking to alternative turbine suppliers for the 1GW of wind farm projects it has planned in Ireland.
The move by MRP comes in the wake of two IP infringement lawsuits filed by American Superconductor (AMSC) against Sinovel in China.
In that litigation AMSC has accused Sinovel of copyright infringement and theft of trade secrets in connection with allegedly stolen wind turbine control source code.
This Recharge News piece notes that an MRP spokesman said the company is “fully aware” of the legal dispute, and the article attributes the switch by MRP to the litigation:
MRP’s decision is the clearest evidence yet of the potential damage Sinovel faces in Western markets as a result of its legal battle with AMSC, which is pursuing the turbine supplier in several Chinese courts for $1.2bn in compensation and damages over alleged intellectual property (IP) infringement and unpaid bills.
This is the not the first time allegations of IP infringement have hurt the business of a wind turbine supplier. Mitsubishi has claimed that GE’s accusations of infringement of several variable speed wind turbine patents virtually shut down its U.S. business.
According to Mitsubishi’s court filings (mitsubishi_antitrust_complaint.pdf), its $2 billion in annual U.S. sales of variable speed wind turbines dropped to zero after initiation of the first patent infringement suit by GE in early 2008.
Mitsubishi may have begun to recover, however. Windpower Monthly recently reported that utility Duke Energy has ordered 202 MW of the accused 2.4 MW turbine from Mitsubishi for a wind project in Texas (see my previous post here).
The article says the Duke order is the first since the advent of the patent dispute with GE.
But it’s clear that even before any ultimate infringement verdict, pending green patent litigation can have serious ramifications outside the courtroom.
Eric Lane is a patent attorney at Luce, Forward, Hamilton & Scripps in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at firstname.lastname@example.org.