Mitsubishi Lawsuits Charge GE With Monopolizing U.S. Variable Speed Wind Turbine Market; Patent Infringement

May 20, 2010 by Jeff Shepard

Mitsubishi Heavy Industries, Ltd. and Mitsubishi Power Systems Americas, Inc. have filed an antitrust lawsuit in United States District Court against General Electric Company (GE). The complaint charges GE with a scheme to monopolize the market for variable speed wind turbines in the United States. Mitsubishi seeks damages that will be calculated during litigation but are expected to be in the hundreds of millions of dollars and probably be in excess of a billion.

In the complaint filed in the U.S. District Court’s Western District of Arkansas, Mitsubishi alleges that after Mitsubishi gained a foothold in the United States market in 2006, GE embarked on an unlawful anticompetitive scheme to drive Mitsubishi suppliers out of the U.S. market.

In addition, attorneys for Mitsubishi Heavy Industry, Ltd. (MHI) filed suit in United States District Court’s Middle District of Florida against General Electric Company charging them with infringing a key Mitsubishi patent for variable speed wind turbines, alleging that GE has been making, using, selling and offering to sell infringing turbines without any authorization or license to do so.

Mitsubishi’s complaint alleges that GE used their lawsuits as a marketing tool. Company spokeswoman Sonia Williams explained, "GE’s patent infringement lawsuit deterred customers from purchasing variable speed wind turbines from Mitsubishi. Our lawsuit documents how GE representatives intimidated Mitsubishi customers by advising them to either purchase license agreements from GE or face infringement risk."

Williams noted that Mitsubishi has signed a development agreement with the State of Arkansas to construct and operate a wind turbine manufacturing plant in Fort Smith, Arkansas, on 100 acres of land formerly part of Fort Chaffee. Mitsubishi is expected to invest well over $100 million dollars in this project. The plant, once built, will employ over three hundred people to build the very variable speed wind turbine technology that is at the center of GE’s attacks. "If GE’s unlawful conduct continues, the plant will have to sit idle, as there may be no U.S. demand for Mitsubishi turbines at a time when America is moving forward with an energy strategy that seeks to harness the power of the wind."

The complaint further alleges that, as part of its unlawful scheme, GE made baseless claims of patent infringement against Mitsubishi. Williams stated that "GE brought these meritless claims against Mitsubishi and frightened potential wind turbine purchasers from purchasing Mitsubishi’s turbines, preventing Mitsubishi’s entry into the U.S. market. GE’s scheme has worked, to the disadvantage of competition and Mitsubishi’s innovative variable speed turbines."

GE launched its first lawsuit for patent infringement against Mitsubishi in February 2008, claiming Mitsubishi’s 2.4 MW wind turbine infringed three of GE’s patents. "Prior to the initiation of GE’s first lawsuit against Mitsubishi, Mitsubishi had sales of approximately $2 billion per year of variable speed wind turbines in the United States. Since GE’s litigation campaign began over two years ago, MPSA has not sold a single variable speed turbine in the United States," Williams said.

According to the complaint, the primary patent claim that GE has asserted against Mitsubishi – the ’039 patent – is based on the same technology that GE disclosed in a public report in the early 1980s as part of a taxpayer funded research program. Williams stated that "the invention asserted in the patent claim was not an original idea. GE knew that its ’039 patent was invalid because of its own prior, publicly funded work in the 1980s. Despite this, GE filed and aggressively litigated suits against Mitsubishi for infringing the ’039 patent."

Williams says the complaint explains that, only weeks after GE lost before the U.S. International Trade Commission on its patent infringement claims, GE filed a new lawsuit against Mitsubishi alleging infringement of two other GE patents not mentioned in its first suit. GE’s new lawsuit prolonged the period of uncertainty over Mitsubishi wind turbines in the U.S. market. At the time of filing this new lawsuit, GE led potential customers to believe that each time Mitsubishi defeats GE’s claims of infringement in court, GE will simply file more patent claims.

GE issued the following response to the latest allegations by Mitsubishi:

"The claims in MHI’s antitrust complaint alleging improper conduct by GE in obtaining and enforcing our patents are meritless and outrageous. The validity of the patents at issue has been examined and upheld in both the US Patent Office and the International Trade Commission. GE’s conduct has been appropriate in all circumstances. GE stands strongly behind the merits of its patent infringement lawsuits against MHI and will fight to protect its intellectual property. MHI’s patent infringement allegations are similarly meritless and GE intends to vigorously defend itself."