Lexar Complaint at ITC Alleges Toshiba Violated 3 Patents
A long-simmering patent dispute between Lexar Media and Toshiba escalated Tues. as the flash memory card maker filed a complaint to the U.S. International Trade Commission. Lexar wants an immediate inquiry into Toshiba over import of NAND flash chips and flash cards Lexar alleges violates 3 of its patents. Toshiba didn’t respond by our deadline to a request for comment.
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Named in the complaint: Toshiba Japan and subsidiaries Toshiba America and Toshiba America Electronic Components. Lexar said it wants “to halt the infringement of Lexar’s intellectual property rights.” It claimed Toshiba’s chips and flash cards - including 16 GB multi-level cell NAND flash chips, 8 GB single level cell and multi-level cell NAND flash chips, 4 GB multi-level cell NAND flash chips and 1 GB single level cell NAND flash chips - infringe on Lexar U.S. patents 6,801,979; 6,397,314 and 6,978,342.
Lexar said the ITC “can not assess damages against an infringer, [but] it can issue an exclusion order prohibiting the importation of infringing technology.” Lexar asked the ITC for an exclusionary order, enforceable by U.S. Customs, barring import into the U.S. of Toshiba’s chips and cards, plus any products containing Toshiba NAND chips. Lexar also sought a cease-and-desist order that could force retailers and distributors to remove from their shelves and destroy products containing Toshiba’s infringing NAND chips. If its complaint is accepted by the ITC, the ITC has 30 days to institute a formal Section 337 investigation, Lexar said.
Some patented technology at issue in the complaint is tied to technology a Cal. jury last year ruled misappropriated from Lexar by Toshiba. A San Jose jury decided in March 2005 that Toshiba was liable for $381.4 million damages for breach of fiduciary duty and theft of trade secrets in the case. A day later, the jury awarded Lexar $84 million more in punitive damages, boosting the total to $465.4 million (CED March 28/05 p5). But Cal. Superior Court in Dec. granted Toshiba’s motion for a new trial, ordering a limited trial on damages awarded to Lexar Media. The case remains on appeal.
Toshiba and Lexar rival SanDisk said early in April they agreed to build a new 300 mm wafer fabrication facility to meet growing demand for NAND flash memory (CED April 6 p6). Toshiba invested $3 million in Lexar during 1997 and gained a seat on the memory card maker’s board. Toshiba then decided to team with SanDisk. Lexar later accused Toshiba of sharing with SanDisk trade secrets it had learned as a close partner of Lexar’s. That claim was at the heart of the case Lexar brought against Toshiba that resulted in the $465.4 million award. Lexar also sued Toshiba in U.S. Dist. Court, San Francisco, for patent infringement, claiming Toshiba infringed 10 of its patents. That case is still pending.
Lexar and rival Micron Technology said last month they agreed to a merger plan calling for Micron to buy Lexar for nearly $700 million (CED March 9 p4). But shareholders, including Carl Icahn, oppose the deal and suits seeking class action status were filed against both companies. - Jeff Berman