Mark LaPedus

EE Times

(03/24/2005 6:52 PM EST)

SAN JOSE, Calif. — A day after finding Toshiba Corp. liable for $381.4 million in a flash-memory patent suit, a jury here awarded Lexar Media Inc. an additional $84 million in punitive damages in the case, Lexar said on Thursday (March 24).

The additional award for punitive damages resulted when the jury allegedly found that Toshiba`s actions against Lexar ``were oppressive, fraudulent or malicious`` according to Lexar, a supplier of digital media products.

The total awarded to Lexar (Fremont, Calif.) in the case now totals $465.4 million, which is believed to be the largest intellectual-property (IP) verdict in California history and the third largest IP verdict in the United States, according to the U.S. company.

``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,`` said Eric Whitaker, executive vice president and general counsel of Lexar, in a statement.

The trial took place in the Superior Court for the State of California, County of Santa Clara. On Wednesday (March 23), Lexar said that the jury awarded the company over $380 million in damages as part of a legal victory against Japan`s Toshiba.

The jury also said that Toshiba (Tokyo) was liable for breach of fiduciary duty and theft of trade secrets, according to Lexar (see March 23 story).

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 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.