The wind energy businesses at General Electric and Mitsubishi have come to blows over their competing wind turbine technology.  At the center of the dispute are the companies’ patent portfolios.  The New York Times reports that Mitsubishi opened up the battle on two new fronts on May 20, with an antitrust complaint filed in a U.S. District Court in Arkansas and a patent infringement complaint filed in a U.S. District Court in Florida. (Mitsubishi has put up a page on its web site devoted to the dispute, with media coverage and copies of its complaints.)

That two competing wind turbine manufacturers would develop a dispute over the scope of their patents is not terribly surprising.  The technology involved requires substantial capital investments that are worth defending.  What’s most interesting is that Mitsubishi has filed antitrust claims arguing that General Electric monopolized the wind turbines market through  “baseless claims of patent infringement” – in other words, “sham litigation.” 


The Supreme Court has recognized that filing lawsuits (including patent infringement suits) is a right protected by the First Amendment.  One can only prevail on a sham litigation theory challenging a given suit by proving that the underlying claims were “objectively baseless.”  In the patent context this typically means that a party must prove that the underlying patent was fraudulently obtained, or clearly did not cover the technology found in the “infringing” product.  A Federal Trade Commission report explains that a sham litigation claim also requires proof that a defendant deliberately wielded baseless claims as an “anticompetitive weapon.” 


Mitsubishi argues that General Electric filed baseless patent infringement claims that prevented Mitsubishi from selling its variable speed wind turbines for almost two years.  At the same time, Mitsubishi’s counterattack includes a separate lawsuit arguing that General Electric infringes Mitsubishi patents.  Mitsubishi’s theory of how General Electric monopolized the market is that General Electric used its patent infringement suits to scare developers away from Mitsubishi’s allegedly infringing wind turbines.  The resulting lost sales, claimed by Mitsubishi, are in the billions.  Then again, if General Electric’s patent claims were objectively reasonable (they don’t have to be ultimately successful), General Electric was within its rights to defend its patents.


In an industry requiring major capital for research and development, these types of disputes will not be uncommon.  And where there are few competitors, it is easy to challenge an aggressive competitor as a “monopolist.”  (Mitsubishi and General Electric share the large scale wind turbine market with only three other major competitors, Gamesa, Siemens, and Vestas.)  If Mitsubishi can prove that General Electric’s patent infringement suits really did lack merit, expect Mitsubishi to hold out for a generous cash settlement.  If Mitsubishi’s theory is not as strong as its press releases suggest, watch for a different type of settlement, perhaps a cross licensing agreement of Mitsubishi and General Electric patents – a deal which would allow the companies to compete head to head, while maintaining the right to sue other challengers using technology that might infringe the cross licensed patents.