Archive for July, 2013
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class="post-7275 post type-post status-publish format-standard hentry category-biofuels-patents category-green-patents category-ip-litigation">
July 29th, 2013
 
Previous posts (e.g., here and here) have discussed Neste Oil’s patent infringement suits against competitor Dynamic Fuels involving biodiesel fuels and production processes.
Dynamic Fuels is a joint venture of Syntroleum and Tyson Foods that operates refineries capable of producing allegedly infringing synthetic renewable diesel fuels.
One of the suits has been stayed pending reexamination by the USPTO of Neste’s U.S. Patent No. 8,187,344 (’344 Patent), entitled “Fuel composition for a diesel engine†and directed to diesel fuels made from animal, plant, or fish fatty acids.
In a second lawsuit, the Delaware district court again granted the defendants’ motion to stay litigation pending reexam.  The patent-in-suit is U.S. Patent No. 8,212,094 (’094 Patent).
The ’094 Patent is entitled “Process for the manufacture of diesel range hydrocarbons.† The patent relates to a process for the manufacture of diesel range hydrocarbons from a biological feedstock where the feed is hydrotreated and isomerized.
The court found that reexamination was likely to simplify the issues in the litigation and would advance judicial efficiency, particularly in this case where no scheduling conference or discovery has taken place.
The court spent some time analyzing whether granting the motion for a stay would prejudice Neste and answered that question in the negative.
One key issue was whether Neste and Dynamic Fuels are direct competitors, and if so, how large is the market in which they compete. While Neste argued that they are the only two companies operating in the U.S. market for “paraffinic renewable diesel fuel,” the court disagreed and defined the market much more broadly:
Having considered the parties’ arguments on this point, the court believes that they are merely indirect competitors in the large, subsidy-driven market for biomass-based diesel.
The court also noted that Neste did not request a preliminary injunction in the case, which would have suggested that the parties do directly compete and a stay would cause Neste real prejudice. Thus, the relationship of the parties weighed in favor of a stay:
Here, Neste has failed to seek a preliminary injunction against any of the defendants. In light of this failure and the above determination that the relevant market is actually quite broad, the court does not believe the parties are “direct competitors” such that this sub-factor should weigh against a stay.
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class="post-7196 post type-post status-publish format-standard hentry category-copyrights category-trade-secrets category-wind-power">

The AMSC- Sinovel copyright and trade secret dispute involving wind turbine control systems has been big news (see, e.g., previous posts here, here, here and here), but legally speaking, mostly civil.Â
That changed recently when the U.S. Department of Justice filed an indictment in federal court in Wisconsin alleging that Sinovel, two of its employees, and a former AMSC employee conspired to commit trade secret theft and criminal copyright infringement.
The technology involved is AMSC’s source code, software, equipment designs and technical drawings that relate to regulating the flow of electricity from wind turbines to the electricity grid. More particularly, the electrical control system includes the Power Module 3000 (PM3000) and the Programmable Logic Controller (PLC), both of which use AMSC’s proprietaryLow Voltage Ride Through (LVRT) sofware to keep wind turbines operational during temporary dips in electricity flow in the electric grid.
According to the indictment, AMSC took reasonable measures to maintain the confidentiality of its trade secrets and proprietary information such as restricting access to authorized personnel only, requiring a unique password to enter the computer system, and requiring employee certification of ethics and confidentiality rules.
The 11-page indictment states that the purpose of the alleged conspiracy was to:
obtain AMSC’s copyrighted information and trade secrets in order to produce LVRT compliant wind turbines, and to retrofit existing wind turbines with LVRT technology, without having to pay AMSC for previously-delievered AMSC software, products, and service or for AMSC’s trade secrets and intellectual property, thereby cheating AMSC out of more than $800,000,000 USD.
The remainder of the indictment lays out the details of the alleged conspiracy, which it says took place from about January 1, 2011 to about December 20, 2012. The former AMSC employee allegedly copied or downloaded the PM3000 and PLC source code, adapted it for unlicensed use within Sinovel’s turbines, and emailed the modified software to one of the Sinovel employees.
In exchange, Sinovel allegedly offered the former AMSC employee an employment contract worth about double what he was being paid at AMSC, but the contract made it appear that he would be working for a different company – a Chinese wind turbine blade manufacturer -Â for a period of time.
The former AMSC employee allegedly traveled to China to work on adapting the proprietary and trade secret information for use in Sinovel wind turbines, and Sinovel allegedly conducted a successful “voltage sag” test using the updated LVRT technology. One of the Sinovel employees allegedly wrote in a Skype chat with the former AMSC employee that the success was “all because of you.”
Sinovel also allegedly copied the AMSC PM3000 source code into some wind turbines commissioned in Massachusetts in 2011 and 2012.
There are so many things that could be said about this case, which began with several civil infringement and contract suits in China. I will offer just a couple of observations.Â
First, it seems an excellent case for the feds to pursue criminal charges because it represents the nexus of two of the Obama administration’s policy goals: supporting the U.S. clean tech industry and dealing with IP theft in China.
Second, as eloquently explained by wind patent and technology expert Philip Totaro in this prior post, the case points up the critical importance of LVRT technology for the stability of wind energy in China and the economic viability of Chinese wind turbine manufacturers.