Offshore wind power and territoriality principles from a German viewpoint

Patent protection in the offshore wind energy sector is a major challenge, with a number of hurdles due to territorial circumstances and provisions.

Offshore wind power refers to both traditional offshore wind power, with turbines installed on fixed foundations in the seabed, and floating wind power, where a floating platform anchored to the seabed serves as a base for one or more turbines. Since floating wind power opens the possibility of harnessing wind power in areas with water depths of more than 60 metres, which would not be possible with traditional structures, there is enormous potential with regard to offshore locations.

Due to this potential and the yet-to-be-established technology, floating wind turbines are also the subject of many patent applications. According to the statistics of the EPO and the International Renewable Energy Agency, floating foundations are among the main technologies, with 49% of all international patent families concerning offshore wind energy, followed by transport, installation, and erection.

The question arises as to which pitfalls exist for industrial property rights and, especially, for patent protection, particularly due to the offshore wind turbines' locations far from the coast.

In principle, a patent has a monopoly effect for the state or territory for which it was granted.

In this respect, the German Patent Act refers to the "scope of application" without specifying this in more detail. It is undisputed that the domestic territory – i.e., the actual national territory of the Federal Republic of Germany – is included in the scope of application; however, it is accepted that the effective territory extends beyond the actual national territory of the respective legislating state or, in the case of contractual associations, the national territories of the member states. Article 5 (1) of the EU Patent Regulation, for example, refers to the territory of the participating member states. According to the prevailing German legal opinion, the territory also includes the territorial waters (a 12 nautical mile zone), the seabed, and the corresponding airspace.

Similarly, the UK Patents Act 1977 states that the territorial waters of the UK shall be treated as part of the UK. However, the offshore wind farms in the German Bight are all (apart from exceptions such as Riffgat) located outside the 12 nautical mile zone in the exclusive economic zone (EEZ). In other countries with steeper coasts, such as Portugal, the territorial waters are more important, but the topographically determined focus on floating wind power will also lead to almost all turbines being erected outside the territorial waters.

Part V, Article 57 of the United Nations Convention on the Law of the Sea (the Convention) defines the EEZ as the maritime area seaward of the territorial waters in principle up to a maximum of “200 nautical miles from the baselines from which the breadth of the territorial waters is measured”. According to Article 56 (1) of the Convention, the coastal state has sovereign rights in the EEZ for the purpose of, among others, the economic exploitation of the zone, such as the production of energy from water, flow, and wind. These sovereign rights are therefore burdened with special purposes. Article 56 (2) of the Convention also establishes sovereign rights without a specific purpose.

In the area of offshore wind power, subparagraph (i) concerning "the construction and use of artificial islands, installations and structures" is of particular importance regarding the construction of energy islands, such as Bornholm Energy Island or Princess Elisabeth Island.

From a legal perspective, the EEZ is therefore not part of national territory. In the EEZ, a coastal state only has sovereign rights with a specific purpose and sovereign powers.

For the next two decades, it can be assumed that floating wind turbines will only be erected within the 200 nautical mile limit and not on the high seas due to the water depths and the required electricity connection. The legal situation on the high seas will therefore not be considered further here.

In principle, the question arises as to whether floating wind turbines are to be regarded as ships. If this question were answered in the affirmative, the flagging – i.e., the country in which the ship were registered – would govern the application of the respective national law on the basis of Article 94 (2) (b) of the Convention.

There is also agreement in the patent law commentaries that patent law extends directly to ships. German law does not legally define the term ‘ship’. In 1951, the Federal Court of Justice defined a ship in the legal sense as "any buoyant, hollow vessel of not insignificant size [...] whose purpose entails that it is moved on water. The other purpose in connection with the fixed location therefore speaks against the consideration of a floating wind turbine as a ship. Floating wind turbines will normally remain in one place over their lifetime of 20 or 25 years and their purpose is to generate electricity and not to move across the water. Thus, a strong argument exists that floating wind turbines are not to be regarded as ships, which means that direct application of the patent law is not possible.

Due to the open wording of Article 60 (2) of the Convention, the patent law of the respective coastal state will be extendable to various situations in the EEZ. However, it is questionable whether an explicit extension is necessary or whether this could take place automatically in the sense of Article 20 (3) of the German Constitution. It is fundamentally problematic that Article 56 (1) of the Convention limits sovereign rights by requiring special purposes. There are no such restrictions for industrial property rights, particularly in patent law. For wind turbines, however, the purpose of "exploitation of the zone such as the generation of energy from water, currents and wind" will automatically be fulfilled.

It has not been clarified whether an automatic extension of patent rights is possible under special circumstances. However, the Hamburg Regional Court ruled on April 26 2018 that the scope of the German Patent Act does not extend to the German EEZ. The reasons given included a ruling by the Regional Court of Mannheim of July 5 2016 and the principle of territoriality. The fact that the EEZ is not part of the territory of the Federal Republic of Germany was already stated by the Federal Constitutional Court in its ruling of April 26 2010.

The territorial scope of the Patents Act 1977 was also decisive in a legal dispute between Siemens Gamesa Renewable Energy A/S and GE Energy (UK) Ltd.

Siemens Gamesa Renewable Energy A/S asserted that the independent claims of European patent EP2657519B1 were infringed by the GE Haliade X wind turbine. EP2657519B1 claims both a wind turbine (claim 1) and a rotor hub (claim 9). It was alleged that the infringing subject matter was, on the one hand, the fully assembled wind turbine located at Dogger Bank and, on the other hand, the rotor hub as such, the latter being stored in a port in the United Kingdom. In addition, a ‘kit-of-parts’ argument was asserted, although there was no kit-of-parts claim in the patent. As a result, the action was unsuccessful, both for lack of validity and for lack of infringement.

The case is particularly relevant due to the location of the Haliade X wind turbines on Dogger Bank off the north-east coast of England in the EEZ. Consequently, an important question in these proceedings was whether Dogger Bank falls within the territorial scope of the Patents Act 1977.

Judge Meade (at the High Court of England and Wales) held that if the Siemens patent had been valid and the GE turbines had fallen within the scope of the claims, GE’s activities on Dogger Bank would still not have constituted patent infringement, as the wind farm did not fall within the territorial scope of the Patents Act 1977.

The territorial scope of the Patents Act 1977 was discussed against the background of the Continental Shelf Act 1964, which includes Dogger Bank, and the Petroleum Act 1998. However, the extension of the Patents Act 1977 is limited by the Petroleum Act 1998 to "activities connected with the exploration of, or the exploitation of the natural resources of, the shore or bed of waters to which this section applies or the subsoil beneath it" (Section 11(1)–(2)).

Judge Meade raised the question of whether the erection of wind turbines on Dogger Bank falls within the purpose limitation set out in the Petroleum Act 1998. The Convention was also discussed. However, Judge Meade took the view that the provisions of the Convention do not extend the intended purpose in the Petroleum Act 1998. Furthermore, the argument that the anchoring of wind turbines underground as such constituted exploitation was rejected.

The key point was that although the Convention empowers coastal states to enact laws on the use of the continental shelf for energy production from water, flow, and wind, the United Kingdom did not make use of this: the Patents Act 1977 was not extended to the EEZ by a corresponding law.

In summary, the scope of German and European patents in relation to the EEZ is to be regarded as very limited but also not conclusively clarified. However, statutory regulations to extend the EEZ would be possible at any time and it cannot be ruled out that floating wind turbines could be regarded as ships, even if there are good reasons against this legal opinion.

These particularities and limitations should be addressed as best as possible with tailored patent claims. Kit-of-parts claims are useful in any case, even if the dispute mentioned here might not have led to a different result. Moreover, claims should also take into account various assembly steps; i.e., intermediate products.

Indirect patent infringement – as provided, for example, in Section 10 of the German Patent Act (similar as in the Patents Act 1977) – is not helpful, as it depends on whether a product was supplied for use of the invention in Germany. The corresponding provisions on contributory infringement under Article 26 (1) of the Agreement on a Unified Patent Court are advantageous in that the domestic reference refers to all participating member states.

Regarding the filing strategy, it should also be considered that due to the increasing industrial relevance of offshore wind power, an extension of patent protection to EEZs is a possible scenario.