Steadily, Wind Turbine OEMs Resume R&D Investment

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Steadily, Wind Turbine OEMs Resume R&D Investment Research shows that after a few years of slow growth, the pace of wind technology innovation is about to pick up again.

The analysis was completed by taking a comprehensive look at the global intellectual property (IP) landscape and over 75,000 filed patents and applications. Each patent filing was evaluated qualitatively to determine whether the patent-protected technology was used within the industry by someone other than the inventor, as well as whether the patent claims would potentially allow the patent holder to enforce IP rights.

The report reveals that the U.S. has the greatest number of patent filings on wind turbine technology. Domestic companies have collectively spent more than $162 million on IP protection, and there are over 8,365 individual patent filings in the country. Europe is second at $138 million with more than 6,100 filings, and China is third at $61 million with more than 5,000 filings. China is poised to overtake Europe within the next 12 months, based on the pace of filings.

Globally, the entire wind industry has spent $522 million to date on patent protection. Expenditure on IP protection by wind companies is expected to escalate, with $1 billion to be spent by 2019 and $2 billion by 2026.

The pace of patent filings has finally dropped for the first time after an average compound annual growth rate (CAGR) of 47% during the 2007-2011 time frame. There was only a 7% growth in the number of filings in wind in 2012 vs. 2011, and a slight decline is expected for 2013 as the recent market downturn has put a damper on research and development (R&D) spending and expenditure on IP protection.

Market conditions indicate that the pace is set to increase again in the coming years due to an increased commitment of expenditure on R&D. Some companies are spending up to 6% of their revenue on R&D, which is almost double the spend rate in 2010 after the financial crisis. Filings are expected to return to the levels seen in 2011 by 2015/16, although the average CAGR is expected to be a more modest 5% to 10%.

IP ownership rankings show General Electric still leads with more than 1,400 patent families, and the company's ability to now leverage the Alstom wind portfolio puts the combined total above 1,550. Siemens has overtaken Vestas for No. 2 as predicted last year, and Mitsubishi drops from No. 4 to No. 5. Previously outside the top 10, Guodian United Power has rocketed up into the No. 4 spot due to more patent filings in 2012 than any other company, although most were exclusive to China.

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All combined, the top 10 turbine OEM patent holders control 56.1% of patent filings in the industry, which is up from 54.5% last year. Additionally, the top 10 control more than 77% of the patents that are broadly applicable to the entire industry. This is due to broad industry usage of a company's patent-protected technology and the commonality of turbine architecture and control systems.

The analysis combines all jointly owned IP filings and the combination of assets from GE and Alstom as well as Suzlon and Senvion under their respective umbrellas. However, it should be noted that these entities all still file applications separately at this point.

Philip Totaro is CEO at Totaro & Associates, a Houston-based consulting firm. He can be reached at (805) 405-3947 or ptotaro@totaro-associates.com.

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