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Toyota loses $4.3-million patent appeal before US Supreme Court news
13 May 2008

Toyota may be finding it hard to cope with demand for its hybrid car Prius in the US, and may have even raised prices of its groundbreaking product, but it recently received a legal setback involving the Prius when the country's Supreme Court upheld a lower court judgement against the company. (See: American buyers find the Toyota Prius more difficult and expensive to buy)

The court let stand a $4.3-million award against the automaker for using another company's patented technology in gasoline-electric hybrid vehicles, including the top-selling Prius.

The judges turned down an appeal filed by Toyota against the adverse ruling passed down by a jury earlier this year. Toyota had earlier unsuccessfully challenged the verdict at a federal appeals court in Washington last year.

The ruling makes Toyota liable to pay Paice LLC royalties for future vehicles it produces using the disputed technology. The appeals court told a trial judge to revisit his order that Toyota pay $25 for every Prius, Highlander and Lexus RX400h sold. The appellate panel refused to block sales of the infringing vehicles.

The disputed technology involves a microprocessor that accepts torque information from both the internal combustion engine and electric motor.

In its Supreme Court appeal, Toyota called Paice a ''patent litigation company'' that was ''attempting to impose a royalty toll on the Prius and similar Toyota hybrid vehicles based on an obscure patent.''

Paice, which had applied for its patent in 1992, urged the Supreme Court not to hear the appeal. The company said the hybrid-car market ''did not take off until Toyota revamped its vehicle programme using technology that Paice patented almost 10 years earlier.''

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Toyota loses $4.3-million patent appeal before US Supreme Court