Mitsubishi’s Fort Smith plant under threat of being idled

Mitsubishi officials said Thursday (May 20) that their planned $100 million Fort Smith plant may sit idle if the company is unable to seek legal relief from an alleged General Electric “scheme” to monopolize a portion of the U.S. wind turbine market.

Mitsubishi Power Systems Americas (MPSA) announced Oct. 16 plans to build a $100 million, 200,000-square foot wind turbine manufacturing plant on 90 acres at Fort Chaffee. The plant could employ up to 400 once fully operational. Company officials said construction will start in the fourth quarter of 2010 and be complete by the fourth quarter of 2011. Mitsubishi officials expect full production and 400 jobs in place by the first quarter of 2012.

But a lengthy patent dispute between GE and Mitsubishi could see the large facility at Chaffee Crossing sit idle, according to Sonia Williams, Mitsubishi spokeswoman and counsel.

“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,” Williams noted in the statement.

Mitsubishi filed a lawsuit Thursday in the U.S. District Court for the Western District of Arkansas claiming that GE has engaged “a scheme to monopolize the market for variable speed wind turbines in the United States.”

Williams would not say why the suit was filed in Arkansas “because that’s part of our legal strategy.”

GE began the effort by attempting to intimidate other wind turbine manufacturers with numerous claims of patent infringement, Williams said. According to the Mitsubishi filing, GE has a 70% U.S. market share of the variable speed wind turbines. Numerous domestic and international companies have been vying for a piece of the billions in federal incentives promoting wind energy development.

According to the Mitsubishi complaint: “In 2006, Mitsubishi gained a foothold in the U.S. market after securing significant contracts for the sale of variable speed wind turbines. Faced with this emerging competitive threat, GE embarked on an unlawful scheme the U.S. market.. … GE’s unlawful scheme has worked. 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, Mitsubishi has not sold a single variable speed wind turbine in the United States.”

The attempt by GE to stop Mitsubishi began in earnest with a February 2008 filing with the International Trade Commission alleging that Mitsubishi violated the Tariff Act of 1930 for importing “certain variable speed wind turbines and components” that infringed upon GE patent holdings.

The U.S. International Trade Commission on Jan. 8, 2010, issued a ruling in favor of Mitsubishi Heavy Industries.

But a few weeks after losing the ITC ruling, GE filed patent infringement claims on two patents not previously mentioned.

“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,” noted a Mitsubishi statement issued Thursday.

Williams said the lawsuit is an attempt to end GE’s seemingly never-ending claims of patent infringement.

“They are engaging in a pattern of litigious behavior that is meant to prevent Mitsubishi from selling,” Williams said.

In addition to stopping the behavior, Mitsubishi is also seeking damages. Those include:
• Compensatory damages in an amount in excess of $100 million, and the exact amount to be determined at trial;
• Triple the compensatory damages under the federal antitrust laws or the Lanham Act;
• A punitive damages settlement against GE for its “unlawful and malicious conduct,” against Mitsubishi in the conduct of its business; and
• A permanent injunction prohibiting further actions or threatened actions against Mitsubishi or its customers for infringement of the ‘039, ‘055, ‘221, ‘705, and ‘985 patents.

Attorneys for Mitsubishi also filed suit in United States District Court’s Middle District of Florida against GE charging them with infringing a key Mitsubishi patent for variable speed wind turbines. The suit alleges that GE has been “making, using, selling and offering to sell infringing turbines without any authorization or license to do so.”

GE Spokesman Daniel Nelson issued the following statement to The City Wire:

"The claims in MHI’s antitrust complaint alleging improper conduct by GE in obtaining and enforcing our patents are meritless and outrageous.

"GE believes that protecting intellectual property rights is essential to the development and deployment of clean energy technology. Strong intellectual property rights promote investment, foster innovation, and encourage commercial deployment of technology."