Toyota settles patent infringement lawsuit

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Delivering hybrid power to the wheels was at issue in the Toyota/Paice lawsuit. Image: Flickr/Ryan Harvey

Under threat of U.S. imports of hybrids being blocked, Toyota has settled a long-running patent infringement suit. A patent filed in 1994 that covered a “high voltage method to power gas-electric hybrid cars” was at issue. Toyota has agreed to license the technology from the Paice company.

The patent at issue

The patent that Toyota has been sued over lays out a way to supply torque to vehicle wheels from two different motors. Originally developed by Alex Severinsky, who founded Paice, this patent was granted in 1994. The combination of high voltage and low current is used in most hybrid vehicles.

Economic arguments leveled

Though Toyota agreed that its technology may have infringed on the Paice patent, but the company had a case because of the International Trade Commission. The ITC has the right to block imports if patent violations are found, unless there are “health or public policy issues” with that limitation. Toyota was arguing that blocking Toyota imports would have created hundreds of millions of dollars of lost economic activity and many job losses.

The lawsuit settled

Paice filed a lawsuit against Toyota approximately six years ago. Both Paice and Toyota agree that the technology used in the Toyota vehicles is “equivalent to the Paice patent.” Toyota argued that it invented, designed and developed the technology entirely independent of Paice. If the litigation had not been settled in both Texas and U.S. appeals court, Toyota may have been blocked from importing hybrids into the United States. Neither side has revealed details of the settlement.

Ford licenses Paice technology

Ford, which is aiming to release both electric and hybrid vehicles, has licensed Paice’s technology. This licensing agreement does not affect Toyota or the lawsuit settlement, though it does give Ford tested technology for its hybrid vehicles. Ford is expected to use the Paice-patented technology in at least the Fusion hybrid car, due out in the next few years.

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