Tuesday, January 12, 2010

A Good Day in the Fight against Green Protectionism

Several positive developments today in our quest against protectionism masquerading in green clothing:

(1) The EU's new trade chief sounds great.  Not only does Karel de Gucht oppose carbon tariffs out of practical and trade war concerns, but he also advocates a multilateral agreement to eliminate barriers to trade in environmental goods.  Of course, de Gucht doesn't really have a say on these issues, but it's still good to hear these things from a high-ranking EU official - particularly when some European leaders (*cough*Sarkozy*cough) are clamoring for green protectionism.

(2) American farmers are unanimously opposed to Cap and Trade and the EPA's regulation of greenhouse gases.  At the American Farm Bureau's annual meeting, delegates voted unanimously to "strongly oppose 'cap and trade proposals before Congress' and strongly support 'any legislative action that would suspend (the Environmental Protection Agency's) authority to regulate greenhouse gases under the Clean Air Act."  As you'll recall, both the House and Senate versions of Cap and Trade include carbon tariffs (aka "border adjustment measures"), and the EPA's new GHG authority hinted at import regulations, so opposition from a powerful group like the AFB is good news.  And for good measure, the AFB announcement even throws in a reference to ClimateGate.  Bravo, farmers. Bravo.

(3) The ITC struck down a ruling that Japanese wind turbines violated GE patents and thus should be banned from the US market.  Normally, I wouldn't get into the nitty-gritty of a case like this, but, as Law360 notes below, it involved billions of dollars in "green" products, a politically-connected plaintiff (GE), and had become highly politicized.  (Even Chuck Schumer makes an appearance!)   Thus, the case ended up smelling a lot more like potential eco-protectionism than your basic trade/IP litigation:
In a reversal of an administrative law judge's ruling, the U.S. International Trade Commission has terminated a Section 337 complaint filed by General Electric Co. against Mitsubishi Heavy Industries Ltd., finding no violation of GE patents by Mitsubishi wind turbine components.

The decision, handed down Friday, puts an end to an ITC dispute over designs for wind turbine technology, in which GE accused Tokyo-based Mitsubishi and subsidiaries Mitsubishi Power Systems Inc. and Mitsubishi Heavy Industries America Inc. of importing turbine parts that infringed three patents....

The ITC opened its investigation in March 2008, based on a complaint filed by GE alleging that Mitsubishi was importing and selling certain variable-speed wind turbines and components that infringed the '039 and '085 patents, as well as a third, U.S. Patent Number 7,321,221.

In August, the ITC ALJ issued a final initial determination affirming two 337 violations on the '039 and '985 patents and recommending limited exclusions barring the allegedly infringing products from entering the U.S.

However, an investigative attorney from the ITC Office of Unfair Import Investigations disputed the ALJ decision, questioning particular infringement findings on patent-specific claims, as well as general concerns about GE's fulfillment of the technical prong of the domestic industry requirements with respect to the U.S. wind turbine market.

Based on the conflicting reports, the full commission announced in October that it would review the ALJ's initial determination...

With a number of green energy stimulus projects under way, Congress has taken a keen interest in the dispute, with lawmakers weighing in heavily for both sides in recent weeks.

Sens. Charles Schumer, D-N.Y., and Kirsten Gillibrand, D-N.Y., along with U.S. Rep. Paul D. Tonko, D-N.Y., sent the ITC commissioners a letter dated Jan. 6 urging them to “consider the importance of the domestic industries and ensure that intellectual property rights are upheld” in the GE-Mitsubishi case.

New York is home to the global headquarters for GE's wind energy business, according to the lawmakers.

Sens. Blanche Lincoln, D-Ark., and Ron Wyden, D-Ore., wrote the ITC in October saying the ALJ decision deserved a second look in light of an expected spike in demand for renewable energy technology.

At least one of Mitsubishi's 2.4-megawatt variable speed turbines has been installed in Wyden's home state, the senator said.

Congress' interest prompted Georgia Republican Sens. Saxby Chambliss and Johnny Isakson to warn commissioners in a Dec. 23 letter that the case “may have become politicized.”

Since entering the wind energy market in 2002, GE has become one of the largest U.S. suppliers of wind turbines, accounting for 43 percent of the market in 2008, according to the ITC.
Good for the ITC to resist the political posturing of Schumer and his colleagues.  Of course, GE is also a very strong supporter and ally of the President, whose administration recently issued a sketchy ruling raising tariffs on solar panels (which GE also makes).  But I'm sure that there's no connection to any of this.


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