Totaro & Associates, a Santa Barbara, CA based consulting firm has released a new research report on the wind turbine technology and intellectual property (IP) landscape. The research shows that the US has the greatest number of patent filings on wind turbine technology and companies have collectively spent over $143M on IP protection with over 7,200 individual patent filings there. Europe is second at $112M with over 5,100 filings and China third at $44M with over 3,700 filings.
Globally, the entire wind industry has spent $430M to date on patent protection. Costs are expected to escalate, with $1B to be spent by 2020 and $2B by 2030. The pace of patent filings has increased dramatically in recent years, with over a 30% CAGR in the past 5 years.
IP ownership shows General Electric leading with 1,300 patent families, with Vestas, Siemens, Mitsubishi and Sinovel rounding out the top 5. Ranking in IP ownership appears to closely coincide with commercial success in the industry. The top 10 wind turbine manufacturers control more than 54% of all wind patent filings, as well as over 80% of the patents which are broadly applicable to the entire industry or potentially infringed.
Some smaller companies with healthy IP portfolios appear to be bolstering their position as M&A targets. “We expect consolidation to happen in the next 12 – 18 months in the wind turbine manufacturing sector as demand returns, but manufacturing capacity has now been constrained,” says Totaro & Associates CEO, Philip Totaro. “Intellectual capital will play a significant role in that M&A.”
More wind industry IP litigation can be expected in the coming years. “This is largely due to the disparity between the volume and quality of filings of the top patent holders to the smaller companies,” says Totaro. “This gap will not provide many opportunities for cross-license, so Tier 2/3 turbine manufacturers may have downside financial risk if they infringe Tier 1 competitors.”
The report also uncovered something of significant interest related to the ongoing legal battles between General Electric and Mitsubishi over wind turbine technology in the US. “We expect the GE vs. Mitsubishi wind IP litigation to start turning back towards Mitsubishi’s favor.” The analysis indicates that the $169M judgment against Mitsubishi, handed out in March 2012 on US Patent 7,629,705, is expected to be overturned due to aspects of that invention having been previously patented.
The full report is available from Totaro & Associates.