Toyota Faces Patent-Violation Claims That Could Ban Import of Its Hybrids Into U.S.
Toyota Motor Corp. faces a patent-infringement claim that may result in a U.S. import ban on its Prius and other hybrid models, the Bloomberg news service reported today.
Closely held Paice LLC filed a complaint today with the U.S. International Trade Commission in Washington, claiming Toyota is infringing its patents. It seeks an order to ban imports of products using its inventions.
Even if Paice were to prevail, Toyota would likely be able to keep selling its hybrids while it mounted a lengthy and vigorous challenge to the decision.
Paice won a jury verdict in 2005 that the Prius, Toyota Highlander and Lexus RX400h hybrid vehicles used Paice inventions related to drivetrains, Bloomberg reported. The new ITC complaint claims the hybrid Camry, third-generation Prius, Lexus HS250h and Lexus RX450h infringe the same patent.
In the complaint, Paice said Toyota is precluded from arguing that the additional vehicles don't infringe the patent or challenging its validity because of the 2005 verdict, which was upheld on appeal. The drivetrains of the vehicles in the ITC case "are materially the same" as those in the Lexus and Highlander vehicles in the civil case, Paice said in the complaint.
That same patent will be at the center of another trial set to begin Oct. 1 in federal court in Marshall, Texas, involving the Toyota Camry. Paice claims the Camry also infringes two other patents. A second case, also pending in Marshall, involves claims of infringement of another patent by the Highlander and Lexus models.
The commission in Washington is set up to protect U.S. market from unfair trade practices, including patent infringement. If it agrees to investigate Paice's claims, the investigation could be completed in about 15 months. It has the power to order U.S. Customs and Border Protection officials to block infringing products from entering the country.
Exclusion Order
Unlike a civil court, the ITC doesn't have the power to order Toyota to pay royalties, and the only remedy possible if a violation is found is an exclusion order. Cindy Knight, a Washington-based spokeswoman for Toyota, wasn't immediately able to comment.
To be able to win at the ITC, Paice must show that it has a market to protect. In the complaint, it says it has made "substantial investments" in vendors and suppliers and in research and licensing.
The company is based in Bonita Springs, Florida, and has offices in Maryland, Michigan and Virginia, according to the complaint. Company officials didn't immediately return calls.
Patent Owners
The ITC, in an unrelated case, is currently considering the standard that must be met before patent owners who don't make products can file complaints.
In the earlier case, the jury awarded $4.3 million in damages and the verdict was upheld on appeal. U.S. District Judge David Folsom in Marshall rejected Paice's request to issue a court order to halt sales of the Toyota vehicles.
Instead, in April he ordered Toyota to pay royalties based on the wholesale prices equal to 0.48 percent for a Prius II, 0.32 percent for each Highlander and 0.26 percent for each Lexus RX400H. Toyota is appealing that order.
1.1 Million Sold
Since 2000, when Toyota introduced the Prius in the U.S., the company has sold 1.1 million hybrid cars and sport-utility vehicles in the market, including about 750,000 Prius units.
Toyota created the market for hybrid vehicles when it introduced the Prius in Japan in 1997. The company has set a goal of selling a million gasoline-electric vehicles annually beginning in the early 2010s.
The third-generation Prius, which went on sale in May, gets an average of 50 miles per gallon in combined city and highway driving, making it the most fuel-efficient gasoline-engine vehicle sold in the U.S., according to the Environmental Protection Agency.
- Posted by
- Scott Doggett September 3, 2009, 3:46 PM
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- Courts, Hybrid, Toyota
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- Court, Hybrid, Paice, Patent Infringement, Toyota Camry, Toyota Highlander, Toyota Prius
No wonder Toyota's hybrids are so successful. It must be this $100 per vehicle drivetrain part that Paice has the patent on.