GE responds to Mitsubishi’s claims of monopolization

GE responded Friday to a claims by Mitsubishi Power Systems that GE is trying to corner the U.S. market for large, variable speed wind turbines.

At stake in the legal fight could be the future of a planned $100 million Mitsubishi plant at Chaffee Crossing.

Mitsubishi Power Systems Americas (MPSA) announced on 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.

Mitsubishi on May 20 filed a lawsuit 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.”

GE’s 30-page response filed Friday (June 25) asked the court to dismiss or stay the Mitsubishi lawsuit. The conclusion of the response notes: “The complaint fails to state plausible antitrust claims particularly given GE’s successful track record litigating the patents at issue against Mitsubishi and Mitsubishi’s own conduct in defending against those actions. Having failed to allege facts showing the GE’s assertion of its patents was frivolous, in bad faith, or fraudulent, the Complain must be dismissed under controlling precedent. Alternatively, if the Court were to conclude that dismissal is not appropriate at this time, then this case should be stayed in its entirety in favor of the ongoing patent proceedings between the parties.”

Mitsubishi spokeswoman Sonia Williams said in May that GE began the monopolization effort by attempting to “intimidate” other wind turbine manufacturers with numerous claims of patent infringement. 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.

Williams said May 20 that the GE action could see Mitsubishi’s Fort Smith plant sit idle once built.  Williams changed course during a June 15 Fort Smith board of directors meeting, saying the company is moving forward with the project and will begin to operate the plant once production can commence.

Following the statement from GE spokesman Daniel Nelson issued with the notice of the legal response.

“GE today filed a motion to dismiss with the U.S. District Court – Western District of Arkansas as its answer to the antitrust lawsuit filed in May by Mitsubishi Heavy Industries (MHI) that alleges improper conduct by GE in obtaining and enforcing our wind turbine patents.

"In our answer, we present compelling evidence that MHI has failed to support its claims of antitrust violations, and therefore its lawsuit should be dismissed. If the court concludes that a dismissal is not appropriate at this time, we alternatively request that the case should be stayed, awaiting the outcome of the ongoing patent proceedings between GE and MHI.

"As we have previously stated: we firmly believe that protecting our intellectual property rights is the foundation for innovation, investing in high technology industries and creating high value jobs. This is certainly true in the wind industry, which holds the hope and the potential for a cleaner energy future."