The jury also said that Toshiba (Tokyo) was liable for breach of fiduciary duty and theft of trade secrets, according to Lexar (Fremont, Calif.).

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, as well as its CompactFlash, Secure Digital and xD Picture Card products.

The case, heard in the Superior Court for the State of California, alleges that Toshiba invested $3 million in Lexar and asked for and received a seat on Lexar's board in 1997. At the time, Toshiba received extensive confidential information, including Lexar's highly confidential patent applications, according to Lexar.

In its arguments, Lexar indicated that by 1997, Toshiba had allegedly "tried but failed to develop a reliable flash memory controller," according to the company. And unbeknownst to Lexar, Toshiba had "top secret" internal plans to partner with rival flash-memory product maker SanDisk Corp.

Toshiba has denied any wrongdoing, but it apparently lost the first round in the suit. "It holds Toshiba accountable for its conduct -- building Lexar's trust to acquire our technology and then betraying that trust to partner with our competitor and compete against us," said Eric Whitaker, executive vice president and general counsel of Lexar, in a statement.

There are still some outstanding legal issues, however. 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.

Lexar's case for patent infringement against Toshiba on more than ten of its patents remains pending in Federal Court. Discovery has now begun in the patent case.

Lexar alleges that Toshiba infringes more than ten of Lexar's 82 worldwide patents, including U.S. Patent Nos. 5,479,638; 5,818,781; 5,907,856; 5,930,815; 6,034,897; 6,040,997; 6,134,151; 6,141,249; 6,145,051; 6,172,906; 6,202,138; 6,262,918; 6,374,337; and 6,397,314.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved