Toyota Loses Bid to End U.S. Patent Dispute Over Hybrid Vehicle Technology

Toyota Motor Corp. lost its bid to dismiss a Florida company’s patent-infringement claim that may result in a ban on imports of the carmaker’s newest hybrid models including the Prius and Camry.

Theodore Essex, a judge with the U.S. International Trade Commission in Washington, denied Toyota’s request to end the case brought by Paice LLC. He also said Toyota can’t argue that the Paice patent is invalid because that issue was resolved in court. The judge’s May 21 findings are subject to review by the six-member commission.

The dispute is scheduled for a hearing starting July 19 and the two sides have been wrangling over what issues will be considered. The arguments concern the effect of a trial Bonita Springs, Florida-based Paice won against Toyota in a case over the patent that was upheld on appeal. The case involved earlier versions of the Prius and Highlander gas-electric hybrids.

“We are encouraged by the judge’s rulings and look forward to completing our case at the upcoming trial,” said a Paice lawyer, Ruffin Cordell of Fish & Richardson in Washington.

A federal judge in the earlier case rejected Paice’s request to halt sales of the cars and instead ordered royalty payments on the Prius, as well as the hybrid-engine Highlander and Lexus RX400h sport-utility vehicles. Paice filed a new complaint, at both the court and the ITC, over the Camry hybrid, third-generation Prius, Lexus HS250h sedan and Lexus RX450h SUV.

“Toyota is disappointed, but our overall position in the case remains unchanged,” Celeste Migliore, a spokeswoman for Toyota, the world’s biggest automaker, said in an e-mail.

Torque Patent

In a separate case, the Toyota City, Japan-based company is challenging the royalty rate it was ordered to pay by the federal judge in Texas.

Paice, which is an acronym for Power-Assisted Internal Combustion Engines, said Toyota is infringing a patent for a way to supply torque, or force, to a car’s wheels from both an electric motor and an internal combustion engine.

It also has a patent-infringement claim against Ford Motor Co. over Fusion and Escape hybrid vehicles. Ford is challenging the patent.

The ITC case is In the Matter of Hybrid Electric Vehicles, 337-688, U.S. International Trade Commission (Washington). The civil cases are Paice LLC v. Toyota Motor Corp., 04-cv-211; 07cv180 and 08-cv-261, U.S. District Court, Eastern District of Texas (Marshall).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net.

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