ANALYSIS - Consolidation results in 'gifts' of over USD 135m in wind tech, IP

The wind energy industry has borne the brunt of consolidation in recent years due to overcapacity resulting from demand and policy uncertainty. One unfortunate (or potentially fortuitous) result of some companies exiting the industry has been a redistribution of technology and the associated intellectual property (IP) rights.

Several companies who have exited the industry have seen the complete decimation of their IP portfolios, due to lack of ongoing management and investment. This equates to making the technology embodied in those patent filings effectively free for the entire industry to use instead of creating commercial value.

Clipper Windpower LLC had 72 different innovations and 287 globally filed patents. They were approached several times with buyout offers, but the private equity company overseeing Clipper did not seriously entertain those offers, including one well into the 7-figure range. Most of their patents are being abandoned and their pending patent applications have all been withdrawn. The power of their patent portfolio was on display when a Clipper patent helped invalidate the GE patent used against Mitsubishi, which overturned the USD-169-million (EUR 154m) judgement in the Zero Voltage Ride Through matter.

BlueScout Technologies Inc (formerly Catch The Wind) had seven different inventions and 24 globally filed patent applications on LIDAR technology. After their Chapter 7 bankruptcy protection filing in 2013, their IP went into administration and has largely gone abandoned. They had some extremely valuable and forward thinking IP on using LIDAR for anticipatory wind turbine control. The abandonment of their portfolio is a huge gift to the industry on technology that will undoubtedly become more universally adopted in the future.

Chapdrive AS, turbine OEM with a hydraulic drivetrain, pitch and yaw system, had 10 inventions and 41 globally filed patents. Their IP was being auctioned off on behalf of their administrators about two years ago, but the sale was unsuccessful. It appears now that the patent portfolio has largely been abandoned. It also appears that Mitsubishi Heavy Industries (MHI) may have dodged a bullet with the abandonment of this patent portfolio given the similarity of some of the ChapDrive patent filings to the Artemis technology being used in the 7-MW Sea Angel offshore wind turbine. A competitor or "patent troll" who might have acquired this could have presented another significant commercial challenge for MHI.

Nordic Windpower had 2 inventions and 18 globally filed patents, plus a plethora of other design IP and new inventions not yet filed as patents. They attempted a sale of these assets roughly two and a half years ago, but they were unsuccessful due to the limited applicability of their technology to the mainstream industry and the lack of tangible technology to back up most of their IP filings.

With the plethora of technologies from the companies above, industry players who desired to own some valuable technology that they could have commercially exploited or otherwise cross-licensed with a competitor appear to have missed out. Using Totaro & Associates' proprietary technology maturity based IP asset valuation method, the technology and IP portfolios above represent over USD 135 million in asset value based on the current level of industry usage of those technologies and the likelihood of commercialisation in the future.

CAREFUL PRESERVATION OF IP

In the meantime, other companies who had previously made significant investments in technology have still seen their patent portfolios and associated technology survive, due to careful preservation in the hopes of finding a commercialisation partner.

United Technologies Corporation (UTC) had been developing some technology during their time with Clipper which they still own. Most notably is a direct drive PMG architecture and hydraulic pitch technology, but they have a total of 27 inventions and 57 global patents still for sale along with the associated design IP. They have offered the opportunity to co-develop some of the technologies further with the right development partner by using their foreign offsets to fund a portion of the R&D and risk reduction. UTC has also indicated that any other patents related to their core aerospace and building systems businesses are available for license for use in the wind industry, including their ice protection systems, fire protection technology, electrical systems and converters, composites manufacturing, gearbox and lubrication system technology and more.

Modular Wind Energy's recent patent filings list Vestas as the "assignee" or new owner of that patented technology. The acquisition of this technology was likely a defensive move to preclude a competitor from having it just in case multi-piece blade technology takes off in the coming years. Deal terms are private.

Danotek Motion Technologies has 9 inventions on PMG technology and converters plus all the design IP for 2.0 - 7.0MW units. Their 2.0MW generator and converter was field proven and GL certified. This technology and IP is now privately held and still available for sale to companies interested in commercialisation.

Boulder Wind Power -- with 12 inventions and 37 globally filed patents, it is believed their technology and IP went back to Core Motion who had originally developed the generator architecture and licensed it to Boulder for development in wind. Core Motion is still active in other industry sectors and it is believed they will still entertain offers or new investment for the wind related technology and IP.

Valmont Industries has five inventions and 19 globally filed patents on segmented tower technology.

Power Quality Renaissance LLC, led by Thomas Wilkins of GE vs MHI fame, his company has been actively attempting to out-license some newly developed (and seemingly 100% owned) patents on SCADA and reactive power control.

Beyond this there have also been two Tier 1 OEMs who have offered to sell orphaned technologies and the associated IP assets in the past two years. This results from R&D investments made in technologies which could not find a commercial home during the gutting of technology investments that we have seen from 2012 - 2013.

All told, there were at one point 230-plus inventions for sale comprising over 650 globally filed patents. That represents over 2.5% of all the patents in the industry. If one company were to have bought them all they would be in the top 10 in terms of IP asset holdings in the industry.

(USD 1 = EUR 0.912)

Choose your newsletter by Renewables Now. Join for free!