Jury Orders Toshiba to Pay More in Lexar Case

A jury in California this week ordered Toshiba and one of its U.S. subsidiaries to pay an additional $84 million in damages to Lexar Media, Lexar says in a statement.

The award covers punitive damages and comes a day after the same jury ordered Toshiba to pay $381.4 million in damages for breach of fiduciary duty and theft of trade secrets. This brings the total damages awarded to Lexar by the jury to $465.4 million, although the actual amount to be paid will be determined by the judge at a later date.

Lexar says it believes the total amount as it stands represents the largest IP (intellectual property) verdict in California history and the third-largest IP verdict in the U.S.

Toshiba responded in a statement by saying the jury's verdicts were "in error" and that it plans to pursue "all available legal avenues to correct it." The Tokyo company says that it does not plan to revise its financial projections for fiscal 2004 because of the awards.

Flash Memory Chips

The case, against Toshiba and Toshiba America Electronic Components, was heard in the Superior Court for the State of California, County of Santa Clara, and centers around technology used in flash memory chips. Flash memory is widely used in computers and digital consumer electronics products because of its ability to retain data when its power supply is disconnected.

Toshiba and Lexar previously were business partners. Lexar sued Toshiba because the Japanese company used its relationship with Lexar to gain access to the company's business plans and technology while simultaneously working with SanDisk, a major rival of Lexar, on similar flash memory technology, Lexar says.

Based on the jury's findings, Lexar says it intends to ask for an injunction that bars Toshiba products found to include the Lexar technology from sale in the U.S., it says. These include NAND flash memory chips and memory cards that incorporate the chips.

An additional claim of unfair competition based on the California Business and Professions Code will be decided by the court in a hearing currently scheduled for April 13, Lexar says. An additional case against Toshiba filed at the U.S. District Court for the Northern District of California and covering patent infringement also remains to be heard.

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