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Lawsuit Threatens to Halt Sales of Toyota Prius

Posted: Sep 08, 2009 09:37 a.m.

Bloomberg reports, "Toyota Motor Corp., the world's biggest seller of autos powered by a combination of gasoline and electricity, faces a patent-infringement claim that may result in a U.S. import ban on its Prius and other hybrid models." Paice LLC, a small engineering design firm, claims to hold patents on the concept of a hybrid gasoline-electric drivetrain.

The company, Bloomberg notes, "won a jury verdict in 2005 that the Prius and hybrid Highlander and Lexus RX400h sport-utility vehicles used Paice inventions related to drivetrains." In that case, Toyota was ordered to pay Paice $4.3 million in damages, but was not ordered to stop importing or selling hybrid cars.

Autoblog reports, "This time, Paice is taking a slightly different tack, seeking to get importations of Toyota's super popular Prius hybrid (along with all the rest of the hybrids from Toyota and Lexus) stopped by U.S. Customs right at the docks," in a complaint filed with the U.S. International Trade Commission.

"To be able to win at the ITC," Bloomberg notes, "Paice must show that it has a market to protect." That may not be easy to do, since the company has not built anything related to the patents it holds. "In the complaint, Paice says it has made ‘substantial investments' in vendors and suppliers and in research and licensing." The final ruling may ultimately be affected by another case, Bloomberg notes, in which the ITC is "considering the standard that must be met before patent owners who don't make products can file complaints."

Treehugger comments, "So if a company has a technology that could be a huge boon for drivers and the environment and they sit on it for a decade, does a competing company that finally does something with it and makes it a success really need to be sued repeatedly for using it? Paice seems to be somewhat at fault for not being effective enough with a smart technology."

Whatever happens with the complaint, hybrid shoppers can take their time. The ITC, Autoblog notes, has estimated that it will take at least fifteen months to investigate and rule on the complaint.

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.