DVI’s Grid Voltage Patent Lawsuit Win Reversed, Creating New Smart-Grid Legal Landscape

Dominion Voltage Inc. has suffered a reversal in its legal efforts to claim that a key competitor is infringing on its patented methods of using smart meter data to better control grid voltage. The court decision has wide implications for companies in the burgeoning volt/VAR control industry. 

Last week, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit threw out a 2016 federal district court jury verdict that had found grid technology provider Alstom guilty of infringing on DVI’s patented technology, on the grounds of an “absence of substantial evidence to support the jury verdict.”

The sharply worded decision reversed all aspects of the 2016 verdict, including the initial $486,000 in deferred royalties against Alstom — now part of GE Grid Solutions — as well as an additional penalty imposed by the district court judge that brought damages to $972,000.

It also vacated the permanent injunction against GE Grid Solutions using the load and volt/VAR management (LVM) module of its e-terradistribution grid management software. That’s the platform that DVI said infringed its patents, at least in the form being deployed with Alstom customer Duke Energy, which was the subject of the lawsuit.

This kind of broad reversal of a jury verdict is relatively rare for appeals courts, which show “great deference to a jury as the fact-finder at trial” according to Justus Getty, a green technology and intellectual property attorney with law firm Duane Morris who reported on the decision last week. 

But “in this case, the Federal Circuit said that even after giving that deference, the jury lacked sufficient evidence to find that Alstom Grid infringed Dominion’s patent,” he said. 

Case hinged on difference between “calculated” and “measured” voltages 

The judges’ decision boiled down to a highly technical, yet critical, difference between Alstom’s methods and those covered in DVI’s patents — specifically, Patent No. 8,437,883 and the language that describes how it uses a voltage controller configured to receive measurement data from a number of smart meters. 

DVI’s patent describes how it uses this metering data to “generate an energy delivery parameter, based on a comparison of the measurement data received from the subset [of meters] to a controller target voltage band.” The key term here is “measurement data,” or the data collected from the meters themselves. 

But Alstom’s software — or, at least, the Version 3.3 in use at Duke Energy — doesn’t use measurements to compare to a target voltage band, the court wrote. Instead, it uses an “iterative calculation engine called the ‘Objective Function,’” which takes system constraint inputs, then uses the grid model to calculate how potential control adjustments would effect the voltages that would result at different points on the grid. 

It is these “calculated voltage” figures, not actual measured voltage data, that Alstom’s LVM uses to determine which control decisions to take, the court wrote. This relatively obscure difference means that Alstom’s technology does not mimic DVI’s patented methods — a fact that the jury failed to take into account in making its decision, according to the judges’ reasoning. 

“The evidence presented to the jury shows that the accused system compares the measured data to a single calculated voltage, as opposed to a voltage band as required by the claims,” the court wrote. Therefore, “we conclude that no reasonable juror could find that the accused product compares the measured data to a controller target voltage band.”

The decision also called into question the testimony of an expert testifying for DVI, stating that he had failed to supply data to prove claims that Alstom’s software violated the patent in this regard, and even contradicted the lawsuit’s key claims in one instance. 

A new legal landscape for volt/VAR control with smart meter data 

The Federal Circuit court decision is a major shift in the legal landscape for companies interested in using advanced metering infrastructure (AMI) as a source of data for managing the sags and surges of voltage on the distribution grid, according to Daniel Munoz-Alvarez, GTM Research grid edge analyst. 

“Most companies in the volt/VAR control software space are very aware of this patent and were somewhat concerned about it, and even limited by it in part, due to its broad nature — that is, protecting the use of AMI voltage data for volt/VAR optimization — and the sense of validation given by DVI’s initial victory in the patent lawsuit,” he said.

DVI filed its lawsuit against Alstom in early 2015. While the company is not known to have filed any other lawsuits, Greentech Media was told by at least two other companies that they received communications from DVI, asserting its intent to review their operations to see if they might violate its patents. 

Getty agreed that “if a patent owner can win a court injunction forcing a competitor to stop selling or remove certain features from a product, then the patent owner will walk into the next sales pitch with some built-in advantages. Patent litigation can, in the right circumstances, be effective at pushing competitors from the market.”

The Federal Circuit court’s decision doesn’t nullify DVI’s patent claims, but it does lay out at least one example of a competing technology that specifically does not infringe on its intellectual property, Munoz-Alvarez said. This helps give “clarity to vendors in the volt/VAR control and optimization space on how to continue developing volt/VAR control analytics that incorporate the use of AMI voltage data without violating a narrower patent,” he said. 

“This also reduces vendors’ risk of getting sued by DVI, as it becomes more and more clear that DVI’s intellectual property is merely one methodology to use AMI voltage data for volt/VAR optimization,” he said. “As a result of the reversal, we may see more vendors further embracing AMI voltage data with differentiated treatment in their volt/VAR control and optimization algorithms,” he said.

DVI, which is owned by Virginia utility Dominion Resources, has partnered with major AMI vendors including Itron, Silver Spring Networks and Landis+Gyr in more than a dozen projects across the country. Still, it is just one of many players in the volt/VAR control space, ranging from large-scale, centralized control platforms from vendors like Siemens, ABB, Schneider, GE, Eaton and the like, to the latest in distributed analytics and controls from companies like Utilidata, Survalent, ACS, Enbala, Opus One and Smarter Grid Solutions. 

Dominion Resources spokesperson Janell Hancock wrote in an email that the company was disappointed in the court of appeals decision, but that “DVI’s patent portfolio is still valid and, in fact, being expanded. We will continue to defend these patents and are currently evaluating our options for appeal.”

She also noted that the company has added four new customers in the first quarter of 2018: Choptank Electric Cooperative in Maryland; Lethbridge Electric in Alberta, Canada; Emera in Maine; and an unnamed investor-owned utility in Canada. 

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