It was just a few months ago that a blog post reported a criminal defendant pleaded guilty to selling fraudulent renewable identification numbers (RINs).

It has happened again, with recent prison sentences for four individuals in Florida who also pleaded guilty to charges related to a scheme involving false production of biodiesel RINs.

According to this article in a Florida online newspaper, court documents had accused the defendants of profiting by unjustly generating and selling RINs and unjustly claiming biodiesel tax credits for the production and blending of fuel that was not actually biodiesel.

More particularly, as employees and officers of New Energy Fuels LLC, the defendants claimed to process animal fats and vegetable oils into biodiesel.  However, what they actually did was perform minimal processing on low-grade feedstocks to produce a low-grade fuel that was not biodiesel.

They would represent to the U.S. Environmental Protection Agency (EPA) that they had produced biodiesel, generate fraudulent biodiesel RINs, and sell the fake RINs to third parties.  In total, the defendants sold over $15 million in fraudulent RINs.

The defendants also made false claims to the Internal Revenue Service (IRS) to get biodiesel tax credits.

As I’ve said before, I believe this type of fraudulent activity is greenwashing.  The fraud and resulting damage are recognizable when we view the putative RIN purchasers as green consumers, albeit commercial consumers instead of individuals, falling victim to false representations about the validity of renewable energy-based financial products.

The Acting Special Agent of the EPA in charge of the investigation (together with officials from the Dep’t of Justice and IRS echoed this sentiment, speaking to the purpose of RINs and the consequences of such fraudulent activity:

“The Renewable Fuel Standard helps reduce the climate impact of transportation fuel sold in this country.  The criminal activity by these defendants has real consequences.  The defendants manipulated and utilized federal governmental programs to line their pockets by fraud….Companies and managers need to understand there are serious consequences to skirting the rules and undermining the integrity of an EPA program.”

Several new green patent complaints were filed in July and August in the areas of LEDs, smart grid, and water meters.

But before we get to that, a significant green patent case settled during this period.  Colorado-based Gevo and BP-DuPont joint venture Butamax announced that they entered into worldwide patent cross-license and settlement agreements.

The deal ends a massive patent dispute that began back in early 2011 and grew to comprise at least 17 lawsuits and 14 patents relating to methods of producing biobutanol.

The agreement grants both parties patent licenses to all fields for isobutanol and includes a combination of royalty-bearing and royalty-free fields for both parties.  According to this piece from Biofuels Digest, it seems the core of the deal is that Butamax will take the lead in the on-road gasoline market and Gevo gets the jet fuel market.

The litigation was notable both for its size and as the first foray of big oil into biofuels patent lawsuits.

LEDs

Feit Electric Company, Inc. v. Cree, Inc.

After Cree sued Feit for alleged infringement of 10 patents back in January, Feit fired back with this lawsuit filed July 7, 2015 in U.S. District Court for the Middle District of North Carolina.

The complaint accuses Cree of infringing two related U.S. Patent Nos. 8,408,748 and 9,016,901, both entitled “LED lamp replacement of low power incandescent lamp” (LED Lamp Patents).

The LED Lamp Patents are directed to LED light bulbs for replacing incandescents.  The LED lamp has an elevated light source positioned above a screw-type base and two groups of LEDs connected in series with each LED mounted proximate a heat sink.

The accused products are Cree’s 4Flow LED lamps.

Koninklijke Philips N.V. et al. v. Amerlux LLC et al.

Philips has filed another patent infringement lawsuit, asserting six LED lighting patents against New Jersey lighting company Amerlux.  The complaint was filed August 5, 2015 in the U.S. District Court for the District of Massachusetts.

The patents-in-suit are:

U.S. Patent No. 6,094,014, entitled “Circuit arrangement, and signaling light provided with the circuit arrangement”

U.S. Patent No. 6,250,774, entitled “Luminaire”

U.S. Patent No. 6,577,512, entitled “Power supply for LEDs”

U.S. Patent No. 7,038,399, entitled “Methods and apparatus for providing power to lighting devices”

U.S. Patent No. 7,262,559, entitled “LEDs driver”

U.S. Patent No. 8,220,958, entitled “Light-beam shaper”

Philips alleges that a host of Amerlux products infringe one or more of the asserted patents, including accent display lighting products, task lighting products, wall wash and grazer lighting products, shelf lighting products, downlights, pendants, outdoor lighting products, and other luminaire-type lighting products.

Smart Grid

Endeavor MeshTech, Inc. v. Redpine Signals, Inc.

Endeavor MeshTech, Inc. v. Atmel Corporation

Endeavor MeshTech (a wholly-owned subsidiary of patent monetization firm Endeavor IP) continued its patent enforcement campaign, filing two more lawsuits in July and August.

The first was filed against Redpine in U.S. District Court for the Southern District of New York on July 1, 2015 (Endeavor Meshtech v. Redpine), the second against Atmel in U.S. District Court for the District of Colorado on July 6, 2015 (Endeavor Meshtech v. ATMEL).

The two complaints accuse Redpine and Atmel, respectively, of infringing three patents in a family – U.S. Patent Nos. 7,379,981 (‘981 Patent),  8,700,749 (‘749 Patent), and 8,855,019 (‘019 Patent), each entitled “Wireless communication enabled meter and network.”

The patents-in-suit relate to a self-configuring wireless network including a number of vnodes and VGATES.

The accused products are Redpine’s n-Link, Connect-io-n, WiSeConnect, M2MCombo, SmartCombo, NetCombo and WinergyNet products and Atmel’s products sold under the brand names ZigBit, SmartConnect, BitCloud, and SMART.

Regen Energy Inc. v. eCurv Inc. 

On August 19, 2015 Regen Energy, a Canadian corporation with operations in San Marcos, California, sued Massachusetts-based eCurv for alleged infringement of U.S. Patent Nos. 8,918,223 (‘223 Patent) and 9,110,647 (‘647 Patent).

The ‘223 and ‘647 Patents are related patents entitled, respectively “Apparatus for managing an energy consuming load” and “Method and apparatus for managing an energy consuming load.”  They are directed to energy management systems and methods that generate load state data from energy consuming loads, make enablement state decisions for the loads using the load state data, and implement the enablement state decisions.

Filed in U.S. District Court for the Southern District of California, the complaint alleges that eCurv’s QPAC line of energy management software and related products infringe the ‘223 and ‘647 Patents.

Water Meters

Green4All Energy Solutions, Inc. v. Flow Dynamics, LLC et al.

In this action for tortious interference, unfair competition and declaratory judgment, Chicago-based Green4All requests that the court declare Flow Dynamics’ U.S. Patent No. 8,707,981 (‘981 Patent) invalid.

The ‘981 Patent is entitled “System for increasing the efficiency of a water meter” and directed to a valve assembly that increases the efficiency of an upstream water meter by removing entrained water bubbles from the water supply.

Filed August 5, 2015 in U.S. District Court for the Northern District of Illinois, the complaint alleges that Flow Dynamics’ prior filed patent infringement suit against Green4All (reported here) is without merit and the ‘981 Patent should be declared not infringed and invalid.

A decision by the High Court of Justice in the UK has handed Enercon a blow in the enforcement of their patent related to power ramp down after the cut out wind speed (EP0847496).

Enercon first filed their patent in 1995 in Germany and has been commercially offering their ‘Storm Control’ technology on their own turbines for many years since. An image representing the power output control strategy is taken from the Enercon patent.

In invalidating the Enercon patent, the UK court seems to have taken an interesting interpretation of a paper from E.A. Bossanyi published in 1982 which dealt with an evaluation of performance the Boeing built MOD-2 wind turbine which was contracted by NASA and erected in 1980. Essentially, the Bossanyi paper contemplates a method for power ramp-down specially adapted to the variable speed, constant frequency (VSCF) MOD-2 wind turbine.

Siemens relied upon expert testimony in arguing that this approach could be applied to variable speed, variable pitch (VSVP) machines being developed around the time of the Enercon patent filing. The UK court agreed.

Siemens also referenced a 1980 patent filing by Toshiba in their attempt to invalidate the Enercon patent. The Toshiba patent describes technology which ramps down after the ‘conventional’ cut-out wind speed, but does not ramp all the way down to null output power. Nevertheless, the UK court did not favor the Siemens interpretation of the Toshiba patent that it teaches what Enercon claimed in their own very similar patent.

Open Opposition

Interestingly, Vestas had previously filed an opposition against the European version of the Enercon patent in a timeframe that would have allowed them to present new prior art. However, their opposition was rejected in November 2002 without citing either the Toshiba patent or the Bossanyi paper.

Nevertheless, a new opposition period against the Enercon patent filing was made possible as of January 2015 based upon an amendment to the Enercon patent triggered by the UK court matter. The prior art references and precedent set in the UK will likely influence a decision by the European Patent Office (EPO) on the validity of the Enercon patent.

However, invalidity of the European patent is not for certain and Enercon still has the opportunity to appeal the UK ruling. The European Patent Office does not have to accept the same conclusion as the UK court, so it will be very noteworthy if the European Patent Office takes the same approach regarding the Bossanyi reference in their review of the amended Enercon patent.

Since Enercon is likely to appeal the UK ruling, the Siemens matter is far from over yet.

Gamesa Litigation

This European patent filing from Enercon serves as the parent to both the UK as well as the Spanish patent which is the subject of the ongoing litigation with Gamesa. The precedent set in the UK is likely to have repercussions on the litigation in Spain if the UK court position on invalidity holds.

An invalidation of the European patent would likely negate the damage award against Gamesa in Spain, but there is still potentially room for Enercon to argue their position here, so the outcome is not guaranteed for anyone involved either.

In the meantime, Gamesa should at least be able to leverage off the non-infringement arguments in their appeal in the Spanish court.

New Precedent

The UK court potentially establishes another interesting precedent here, because there are certainly other patents held by companies in the wind industry which attempt to deal with component loading and fatigue which could also potentially be argued as obvious in light of the UK court’s interpretation of the technology developed for VSCF being applicable to VSVP based turbines.

The UK court judge refers to adjustment of the torque and pitch control “knobs” as a means to control generator rotor rpm as an obvious method in light of the Bossanyi paper, but also acknowledges other methods of implementing such technology:

…it required no inventive activity at all for a skilled person given Bossanyi in 1995 to think seriously about how to implement the power ramp down proposal in VSVP turbines.  They would consider how to put that into practice and, in terms of controls, it was obvious to think about “turning” the electric torque “knob” and the pitch control “knob”.  Reducing rotor speed as the wind speed increased as a way of reducing power accordingly is not the only way of putting Bossanyi into practice but it is an obvious approach.  Reducing the speed this way has an obvious advantage in terms of loading and fatigue.

Final Thoughts

Over the past 10 years we have seen Enercon attempt to enforce patents on frequency and voltage regulation against Vestas unsuccessfully, with the result being an invalidation in Ireland and the UK. We have also seen MHI successfully challenge the validity of the GE zero voltage ride-through patent in the US leading to an overturning of the $169M judgement and a settlement of their other ongoing litigation matters.

The past history of the wind industry’s capitulation to licenses is likely at an end as companies arm themselves with information to defend against the onslaught of IP challenges they face. This new level of intelligence gained as well as a better understanding of the commercial implications of IP infringement risks are providing companies with the opportunity to invalidate competitor patents with greater rigor and frequency than ever before in the industry’s history.

The implications of all these proceedings introduces some potentially substantial commercial risks into the project development process. Now that companies are willing to target the turbine OEMs, project developers and even the EPC contractors for patent infringement liability, the proactive companies are already arming themselves with information to ensure they can proceed smoothly.

*Philip Totaro is the CEO of Totaro & Associates, a consulting firm focused on innovation strategy, competitive intelligence, product development and patent search.  To find out more, or get in touch please visit www.totaro-associates.com.  Totaro & Associates delivers Innovative Solutions Enabled by Intelligence™.