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On Wednesday a Californian jury found Toshiba guilty of theft of trade secrets from Lexar and issued damages of $381.4 million dollars, a day after they awarded an additional $84 million in punitive damages. The total awarded to Lexar in this case is some $465.4 million which is apparently the largest IP verdict in California history and the third largest IP verdict in the United States. This case relates to the use of Lexar trade secrets in Toshiba's NAND flash chips, CompactFlash cards, Secure Digital and xD-Picture Cards. Toshiba said that it 'believes that the verdict rendered by the jury was in error, and we plan to pursue all available legal avenues to correct it'.
Lexar press releases
Toshiba press releases
Total Damages of $465 Million, The Largest IP Verdict in California History
Fremont, CA, March 24, 2005 -- The day after finding Toshiba Corporation (JP:6502) and Toshiba America Electronic Components, Inc. (PNK:TOSBF.PK) liable for $381.4 million in damages for breach of fiduciary duty and theft of trade secrets in Lexar Media, Inc. v. Toshiba Corporation, a San Jose jury awarded Lexar Media, Inc. (Nasdaq:LEXR) an additional $84 million in punitive damages. The total awarded to Lexar in the case now totals $465.4 million, which is believed to be the largest IP verdict in California history and the third largest IP verdict in the United States.
The additional award for punitive damages resulted when the jury found that Toshiba Corporation's actions were oppressive, fraudulent or malicious.
"This verdict sends a clear message that protects all the other companies that don't have the will or means to take on a giant like Toshiba for their fraudulent or abusive business practices. This is a huge victory not just for Lexar, but for innovative companies everywhere," said Eric Whitaker, executive vice president and general counsel, Lexar. "The value of Lexar's inventions has always been and will continue to be at the core of Lexar's business model. Toshiba's main defense attempted to challenge the value of Lexar's IP. The jury's clear reaffirmation of the value of our technology and IP sends a very important signal to our future business partners and licensees."
The trial took place in the Superior Court for the State of California, County of Santa Clara.
Lexar's claim for unfair competition, based on California Business and Professions Code Section 17200 was not given to the jury and will be decided by the Court. Lexar expects that the Court will rule on that claim as well as on anticipated post-trial motions shortly after a hearing currently scheduled for April 13, 2005.
Based on the jury's verdict and findings, Lexar intends to ask the Court for an injunction that bars the sale of Toshiba's products in the United States. Lexar will ask that the injunction include products that have been found to incorporate Lexar's trade secrets, including Toshiba's large and small block NAND flash chips, its CompactFlash, Secure Digital and xD Picture Card products. Though the length of the injunction will be determined by the Court, during the trial, there was testimony that it could take as long as eighteen months to implement the types of features Lexar disclosed to Toshiba. Lexar expects that the Court will hold a hearing on Lexar's request for an injunction on April 13, 2005.
Lexar's case for patent infringement against Toshiba on more than ten of its patents remains pending in the United States District Court for the Northern District of California in San Francisco.