Is GE's Wind Patent Portfolio Sustainable Without Future Licensing?

Similar documents
How To Draft Patents For Future Portfolio Growth

11th Annual Patent Law Institute

Practical Guidelines For IP Portfolio Management

11th Annual Patent Law Institute

Practical Strategies for Biotechnology and Medical Device Companies to Manage Intellectual Property Rights

小心站台空隙. Don Merino Vice President and General Manager, Asia Licensing Sales. December 2, 2011

US Patent Litigation Trends in Cloud Computing IPlytics GmbH

Strategic Patent Management: An Introduction

Patents. What is a patent? What is the United States Patent and Trademark Office (USPTO)? What types of patents are available in the United States?

2011 IPO Corporate IP Management Benchmarking Survey. November Intellectual Property Owners Association

Patent Due Diligence

MORGAN STATE UNIVERSITY PROCEDURES ON PATENTS AND TECHNOLOGY TRANSFER APPROVED BY THE PRESIDENT NOVEMBER 2, 2015

The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution

The high cost of standardization How to reward innovators

Standard-Essential Patents

Influences of Digital Transformation on Freedom to Operate Processes in the Chemical Industry

Getting the Most From Your IP Budget: Strategies for IP Portfolio Management and Litigation Avoidance

Patent portfolio audits. Cost-effective IP management. Vashe Kanesarajah Manager, Europe & Asia Clarivate Analytics

Patent Assertion Entity Activity: An FTC Study

Intellectual Property

Patents An Introduction for Owners

Slide 25 Advantages and disadvantages of patenting

Patents as a regulatory tool

Freedom to Operate (FTO) from a large company s perspective

Patent Assertion Entity Activity: An FTC Study

TAM - Technology Asset Management

Technology Landscape Report FLEXIBLE DISPLAY Wisdomain, Inc.

The Objective Valuation of Non-Traded IP. Jonathan D. Putnam

Evaluating a Report of Invention & Licensing. Technology Development Boot Camp Peter Liao March 25, 2013

Effective Utilization of Patent Searches in the Wake of the AIA Patent Reform Law. April 30, 2012

SNE Research. Publisher Sample

RF Front-End. Modules For Cellphones Patent Landscape Analysis. KnowMade. January Qualcomm. Skyworks. Qorvo. Qorvo

Defend against infringement suits

Settlement of Pharma Disputes and Competition Law in Korea

The Uneasy Future of Software and Business-Method Patents

Identifying and Managing Joint Inventions

Patenting and Protecting Early Stage R&D

IP MANAGEMENT & VALUATION SUPPORTING SENIOR EXECUTIVES IN THE IDENTIFICATION, EVALUATION, PROTECTION AND GROWTH OF IP ASSETS

Using Patent Landscapes to Track Homegrown Technologies in Malaysia, Philippines, Indonesia and Thailand

Access to Medicines, Patent Information and Freedom to Operate

The Role of Malaysian Patent Attorneys in Innovation and Transfer of Technology

China: Managing the IP Lifecycle 2018/2019

Engaging Industry Partners

5 Ways To Ramp Up Your Patent Portfolio

An Intellectual Property Whitepaper by Katy Wood of Minesoft in association with Kogan Page

Managing IP Assets Throughout the. Patent Lifecycle

Infringement and Enforcement Panel How can you identify infringement and enforce your rights?

Insight: Litigation Trends (Top 10 Global Manufacturers)

Public Hearings Concerning the Evolving Intellectual Property Marketplace

Discovery: From Concept to the Patient - The Business of Medical Discovery. Todd Sherer, Ph.D.

HOW TO READ A PATENT. To Understand a Patent, It is Essential to be able to Read a Patent. ATIP Law 2014, All Rights Reserved.

Algae Biomass Summit 2014: Patent Strategies for Algae Companies in an Era of Patent Reform Peter A. Jackman, Esq. October 2, 2014

Patent application strategy when, where, what to file?

WIPO REGIONAL SEMINAR ON SUPPORT SERVICES FOR INVENTORS, VALUATION AND COMMERCIALIZATION OF INVENTIONS AND RESEARCH RESULTS

Patents: from defensive stance to value genera4on (part 2)

Programs for Academic and. Research Institutions

TAM Technology Assets Management 1. CONTENT

Litigation Funding for Patent Disputes

INTELLECTUAL PROPERTY POLICY

Patent Insurance/Collective Approaches to Managing Patent Risk

AN OVERVIEW OF THE UNITED STATES PATENT SYSTEM

Patent Monetization: 2010 and Beyond. Kevin S. Fiur Vice President ICAP Ocean Tomo December 2009

Practical Strategies for Managing Patent Rights for Biotechnology and Medical Device Companies

executives are often viewed to better understand the merits of scientific over commercial solutions.

WIPO WORLD ORGANIZATION

Contents. 1 Introduction... 1

THE LEGAL MARKETPLACE IN AN EVOLVING PATENT LANDSCAPE

Transition PPT Template. J.P. Morgan. June 2015 V 3.0. Energy Equity Conference June 27, 2017

OIM Squared, Inc. - Patent Portfolio Report

Find and analyse the most relevant patents for your research

IP, STRATEGY, PROCEDURE, FTO Peter ten Haaft (PhD, Dutch and European Patent Attorney)

From the Experts: Ten Tips to Save Costs in Patent Litigation

Where to File Patent Application Yumiko Hamano IP Consultant - IP Commercialization Partner, ET Cube International

AN OVERVIEW OF THE UNITED STATES PATENT SYSTEM

Intellectual Property

An investment in a patent for your invention could be the best investment you will ever

Intellectual property and competition policy

Intake Nozzle Assembly. Sheer Wind Inc Patent Portfolio Report. Air Intake. Energy Extractor

The Inventor s Role: Understanding the Technology Transfer Process

America Invents Act (AIA) Chart For University Personnel

Committee on Development and Intellectual Property (CDIP)

eskbook Emerging Life Sciences Companies second edition Chapter 8 Checklist for Planning and Conducting an Effective FTO Search

Outsmart the Competition Through Patent Research

Key issues in building a strong life sciences patent portfolio. Tom Harding and Jane Wainwright Potter Clarkson LLP

A conversation on Patent Quality

Policy Contents. Policy Information. Purpose and Summary. Scope. Published on Policies and Procedures (

GLOBAL ICT REGULATORY OUTLOOK EXECUTIVE SUMMARY

Developing an Effective Patent Strategy for Your Company

MOVING FROM R&D TO WIDESPREAD ADOPTION OF ENVIRONMENTALLY SOUND INNOVATION

Patent Quality: It s Now or Never. A LexisNexis White Paper By Brian Elias Director, IP Product Planning LexisNexis

PATENT PROPERTIES ANNOUNCES SECOND QUARTER 2015 RESULTS. Announces Name Change to Walker Innovation Inc.

A New Vision for Patent Prosecution as Asset Managers: Optimizing the Value of Intellectual Property

Enforcement of Intellectual Property Rights Frequently Asked Questions

Network-1 Technologies, Inc.

Acquisition of MST Medical Surgery Technologies Ltd:

Mergers and Acquisitions/ Private Equity. Providing In-Depth Deal Coverage for Buyers, Sellers, and Investors. Attorney Advertising

The role of Intellectual Property (IP) in R&D-based companies: Setting the context of the relative importance and Management of IP

Derwent Innovation Legal Status: Predictive Data on Derwent Innovation

YOU CREATE. YOU INNOVATE. WE PROTECT.

Ways to Maximize Your Intellectual Property Assets

Transcription:

Is GE's Wind Patent Portfolio Sustainable Without Future Licensing? Analysis and cost estimation of their patent portfolio suggests a bubble but will it break? by Philip Totaro, Principal, Totaro & Associates General Electric Company (GE) has vastly outpaced all of their competitors in intellectual property (IP) protection in many industries, but particularly wind turbines. Data from our efforts in analyzing the landscape of issued patents and pending applications from the horizontal axis, utility-scale wind sector indicates just how far ahead they are. The chart below shows the totals of the published portfolios of patents and applications from the top companies in the US. The breadth of GE s portfolio has been a direct result of focusing of resources as well as past success in licensing and litigation. While we won t go so far as to say they are using the size of their IP portfolio as a scare tactic to get their competitors to license from them, the scope of their portfolio is certainly intimidating to those who have not taken to time to analyze it in depth. It is interesting to note that while they are better than the industry averages, GE s portfolio is not vastly superior to most of their competition on a percentage basis as it relates to the number of

High risk patents and apps (3% for GE vs. 1% for the Industry) and Medium/High risk patents and apps (14% for GE vs. 10% for the Industry) represented on the chart above in red and orange respectively. However the scale that their portfolio has achieved affords them the luxury of having greater numbers of patents in key areas of technology. Put it another way, if 10% of a patent portfolio will be subject to assertion then it s better to have 1000 patents in the portfolio than 10 or even 100. Interestingly, they appear to use the patent process as a means of defensive publication, whereby they file on virtually every idea they generate internally in the hopes that they can get the patent, but even if the application is rejected they have prevented their competitors from patenting it out from under them. Their legal machine consisting of their in-house and outside counsels work to ensure a very high conversion rate from filings to issuances, based on the quality of claim construction during the drafting of the original application and personal engagement with the examiners to shepherd their applications through the process. They have also been one of the top utilizers of the Green Patent Fast Track. Deeper analysis of their portfolio indicates the areas of focus for the components and technologies in their portfolio. Their component focus has been in those same areas which the industry has rallied around. Blade aero performance and structure, controls for performance optimization and load mitigation as well as electrical system reliability enhancement are all trends which are seen throughout every wind turbine OEM.

A look at their technology focus indicates they are mostly in line with industry trends on this as well. Interestingly a comparison of the issued patents in their portfolio vs. the pending applications reveals some interesting trends as well. Here we offer a side-by-side comparison of the issued patents on the left and the pending applications on the right broken down by component keyword. The differences between the two charts indicate areas where innovation has occurred in the past vs. more recently. From this it is clear that while blades are the highest component on the cumulative chart, that is largely due to influx of innovation on swept blades, circulation control, as well as the serrated trailing edge being utilized on the new 1.6-100m platform.

We also offer a side-by-side comparison of the issued patents on the left and the pending applications on the right broken down by technology keyword. It is clear that certain areas of technology development have been more important based on the same comparison logic discussed above. Performance optimization has dominated their product strategy in the past few years, and their patent portfolio reflects that trend. GE is also famous for identifying key technologies which are required within the industry at a future point in time, such as power factor control, VAR support or more recently curtailment, and then develop a multi-patent fence around those technologies. They also look to bracket around their competition with patents. This is accomplished by identifying the High or Medium/High risk patents or applications of their competitors and analyzing the weaknesses of those claims to determine areas of potential IP capture, coupled with assessment of competitive intelligence to determine where their competition is going technologically. Of course they are also known to get involved in cultivation of regulatory requirements and then subsequently patent a system which can regulate a wind turbine or farm to comply with that standard, potentially calling into question the allowable scope of protection obtained. In developing the breadth of this portfolio they have followed some basic tenets of IP strategy in seeking blanket protection in most areas of technology and components in the industry space. This is the result of their focused brainstorming sessions and engagement of a broad swath of

engineering as well as internal and external Legal/IP team members to identify patentable inventions and complete invention disclosures and applications. These protocols, established in the mid-2000s have served them well in the last few years where the number of filings has doubled compared to previous years. This was enabled by the revenue generated from their successful licensing activities, although the ongoing Mitsubishi litigation is likely draining some of that benefit away. Filing History - Patent Applications and Issued Patents, by Filing Year Industry Relevance 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 High 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 1 2 2 3 5 1 0 Medium / High 0 0 0 0 0 0 0 0 0 0 0 1 1 5 4 10 9 11 22 19 16 1 Medium 0 3 3 0 3 1 0 1 0 0 1 2 6 12 19 29 27 54 87 102 99 1 Low 1 2 0 0 0 0 0 1 1 0 3 0 2 8 14 28 25 9 16 9 10 0 Total 1 5 3 0 3 1 0 2 1 0 4 3 9 27 39 68 63 76 128 135 126 2 Nevertheless, one must ask if this pace is sustainable, since each application has a certain cost associated with it and the revenue generated from licensing must exist in order to justify the continued scope of the portfolio. The spike in filings starting in 2003 after the Enron Wind acquisition and again in 2008 with a focus on future licensing is reminiscent of the huge increase in the pace of filings from Aloys Wobben, Chairman of Enercon GmbH, in 2002 2003 after the settlement of the Kenetech/Zond/Enron Wind/GE International Trade Commission (ITC) matter in which they were effectively denied entry into the US market. The portfolio of Enercon patent filings proved to be unsustainable as is evidenced by the sharp drop-off in their number of filings per annum lately, in spite of new innovation being developed on their liquid cooled generator. Based on a patent budget calculator which we developed to assess the year-over-year costs for cultivation and maintenance of a patent portfolio, we have been able to determine the approximate costs for maintaining their portfolio. Certain assumptions had to be made in this analysis, so there is likely some variability in the cost, however we believe it to be accurate within an order of magnitude. Even though the patent landscape we have analyzed covered only the US, we know GE uses the US as their primary priority filing locale and their foreign filing strategy can be inferred from a look at the family members of their US patents. Assumptions are as follows: The majority of their filings are US, CN, and EP. o Filings which were categorized as L or M will follow this protocol for cost calculation. Important inventions get filed in a broader scope of countries, specifically US, CN, EP, IN, MX, JP, KR, CA, BR and AU. o Filings which were categorized as M/H or H will follow this protocol for cost calculation.

Filings per annum used in the calculation from 2001 2010 were actual numbers. o Filings prior to 2001 were not very significant and were excluded from the calculation for simplicity. Filings from 2010+ were assumed at the same average rate per annum from 2008 2010 for filings out until 2020. The results of this calculation based on the scope their portfolio and following the protocol outlined above shows that the cost is quite substantial particularly in the out years. In 2020 alone they will spend US$31M on prosecuting and maintaining their portfolio. Patent Budget Per Annum (in Millions of USD) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.05 0.4 1.1 2.9 4.6 7.1 7.8 10.3 14.6 16.4 17.4 18.5 19.5 20.8 22.1 23.4 25.1 27 29 31 30.8 24 23.8 23.2 23.9 Continued turbine sales as well as licensing will clearly be necessary to support that size of portfolio. With the expiration of a core patent in February of this year, US5083039 ( 039), which covered field oriented control of an induction generator as well as dynamic VAR control at the turbine, a new suite of technologies has emerged technologically, but not necessarily on the assertive license front. Their recent acquisition of Converteam also adds to their portfolio of full power conversion and permanent magnet generator technology. This architecture is quickly becoming the most pervasively deployed platform amongst the wind turbine supply base. However, it remains to be seen if this technology architecture will be part of the next wave of assertion and licensing. If history has anything to say, then you can bet on future licensing, but the scope may be affected by the outcome of the ongoing Mitsubishi litigation. If GE is successful in upholding the validity of their patents against Mitsubishi then one will presume they will be emboldened to pursue licenses on the new technology platform. If Mitsubishi prevails, then we could see another round of lawsuits from the licensees of 039 and the other DFIG related technologies demanding their royalty payments back. This could leave GE gun-shy to broadly license the way they did with 039 and other related patents. To get a deeper look into the patent landscape of the horizontal axis, utility-scale wind industry please visit www.totaro-associates.com and ask about Wind Patent Watch, a subscription service providing a weekly digest and analysis of the published patents and applications from General Electric and the rest of the industry. About the Author Mr. Philip Totaro is the Principal at Totaro & Associates, a consulting firm focused on innovation strategy, competitive intelligence, product development and patent search. Mr. Totaro has experience in strategic planning as well as creating and protecting intellectual capital. He has worked for such companies as General Electric, United Technologies Corporation and most recently he oversaw Intellectual Property and Competitive Assessment for Clipper Windpower. He has helped cultivate and disposition over 450 innovations, and his assessment has led to over 250 issued patents. His strategic market analysis has led to the funding justification of over $500M in R&D investment and the development of multi-million dollar

product and service offerings. He has provided legal and technical due-diligence for over $1B in M&A, including the recent takeover of Clipper Windpower by United Technologies Corporation. To find out more or get in touch please visit www.totaro-associates.com.