A US judge layed into two of the world’s biggest offshore wind players as “inhibiting efforts to fight climate change” as he doubled the royalties GE must pay Siemens Gamesa over patent infringements linked to the former’s Haliade-X turbine.
Judge William Young made his scathing comments as he ordered GE to pay $60,000 per megawatt of Haliade-X capacity installed at the planned 1.1GW Ocean Wind 1 project off New Jersey, settling a final detail of an earlier landmark ruling by the court that found the US group’s turbine breached a Siemens Gamesa patent relating to structural support for bearings, outlawing sale of that model in the American market and ordering $30,000/MW payment for any used.
Judge Young of the US District Court of Massachusetts said in his order published on Thursday that GE and Siemens Gamesa were “locked in a global struggle for dominance in the lucrative and vitally important market to develop offshore wind turbines.
“This struggle does nothing to advance the public interest of the people of the United States or any other nation. Indeed, it inhibits efforts to combat climate change worldwide.”
The judge added: “It would be far, far better for these two corporate behemoths, consistent with antitrust requirements, to cross license their particular technological contributions and forge ahead with production in the global public interest.”
Orsted-PSEG’s Ocean Wind 1, along with US offshore wind pioneer Vineyard 1, had been subject to a ‘carve out’ that exempted them from the ban on Haliade-X sales, on the public interest grounds that they were so far down the road a switch of turbine could sink the entire projects.
In the case of Ocean Wind 1, Siemens Gamesa argued that allowing GE to continue using a patent-infringing 13MW version of its turbine at the project conferred a major economic advantage, and asked for the royalties to be trebled.
For its part GE told the judge that deteriorating economic conditions had fundamentally worsened the economics of supplying Ocean Wind 1 and a $90,000/MW royalty penalty could threaten its viability – the impact the ‘carve out’ was supposed to avoid.
Settling on $60,000/MW, Judge Young said: “What is indubitably clear is that, by permitting GE to proceed on two offshore wind turbine projects, notwithstanding the general injunction earned by [Siemens Gamesa], this Court is conferring on GE, a patent infringer, a significant if incalculable economic advantage.
“GE will thus be able to build up relationships with reliable vendors and subcontractors, and work out supply chain issues – in short, gain the advantage of learning how to address that myriad of issues that become apparent only by actually building a project out. GE ought to pay for this privilege.”
A GE spokesperson told Recharge: “While we are disappointed with the royalty ruling, which does not follow the jury’s verdict or account for today’s economic realities, the Ocean Wind project will move forward.
“We remain committed to the US offshore wind market at this pivotal time for the industry and are pursuing all legal and technical options, including an appeal and redesigns, to bring the benefits of the Haliade-X to US customers.”
A Siemens Gamesa spokesperson said: “Siemens Gamesa welcomes the Court’s order recognising our position.”
Siemens Gamesa’s request for an upfront payment of the royalty fee was not granted in the order.
The judgment is the latest in a long-running legal saga that has seen GE and Siemens Gamesa lock horns in courtrooms around the world over turbine technology intellectual property.
GE has already moved to escape the original ban on Haliade-X sales by unveiling a redesigned 14.7MW Haliade-X that complies with the patent ruling and is already earmarked for US manufacturing. Haliade-X models to be installed outside the US were not affected by the original judgment.
