Toyota Prius importation under threat due to U.S. patent trade case?
Posted Sep 4th 2009 10:59AM by Jeremy Korzeniewski
2010 Toyota Prius – Click above for high-res image gallery
With every new vehicle introduced by Toyota powered by the automaker's proprietary Hybrid Synergy Drive comes a matching complaint filed by Paice LLC for patent infringement. In the latest case, Paice has filed a grievance with the U.S. International Trade Commission in Washington alleging that Toyota is violating a patent it holds for powertrains that feature both an internal combustion engine and an electric motor – better known as hybrids.
This isn't the first time these two companies have grappled over hybrid drivetrain patents. Back in 2005, Paice won an initial judgement against Toyota resulting in an order that the automaker to pay Paice monetary damages of $4.3 million, though the judge rejected a request to force Toyota to halt sales of hybrid vehicles in the U.S. at that time. Later, Toyota was ordered to pay royalties equal to a small percentage of every hybrid sold in the States.
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. According to Bloomberg, it could take about 15 months for the ITC to investigate this case, so there doesn't seem to be any reason to rush out and storm your local Toyota or Lexus dealer for a new hybrid... yet.
[Source: Bloomberg]
Reader Comments (Page 1 of 3)
l.i.dave 11:03AM (9/04/2009)
HA HA HA HA HA HA!!!
So now Toyota will be forced to turn to Ford for help with Hybrid licensing?
Oh how the mighty have fallen.
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Leclerc 11:21AM (9/04/2009)
Yea, Toyota needs Fords help. I see your an educated lad.
Luis 11:45AM (9/04/2009)
If you're gonna knock someone's education at least get your grammar correct.
The OP is still a dunce, though.
Rich 1:07PM (9/04/2009)
A case of Muphry's Law...
Pokey 3:25PM (9/04/2009)
Why does everyone hate this car so much? Sure, it's not very attractive, and it's kind of boring, but it sells very well, and has changed changed the automotive industry considerably.
I'm not a big fan of Toyota, but there is a reason they are #1.
sophie 11:08AM (9/04/2009)
before all the haters come out, just know that Paice is a patent troll. almost every corporation faces these leaches who request or buy patents for stuff they never intend to make just in case it becomes the next big thing; then they sue the pants off of anyone that does something similar. all they really want is a settlement, but kudos to toyota for not giving them one!
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nrb 11:14AM (9/04/2009)
That was my question. Every time I see article like this, I wonder if it's a patent troll. Do we know that's the case with Paice, or is it just an assumption?
zamafir 11:41AM (9/04/2009)
thanks for the head's up, sure sounds like trolling. I wonder how long they'll try to drag this one out?
sophie 12:05PM (9/04/2009)
well there are certainly different leagues of patent trolling, and paice would be in the minors, but the court calls them a "non-practicing entity" which means they have no intention of manufacturing anything, just of holding onto the patent until someone else manufactures it. it's also standard troll practice to wait until that someone else is wildly successful with their product before suing, as paice did.
i say they're in the minors because this seems to be their only gig. the inventor at paice has a stream of patents about hybrid vehicles (as do many, many others dating much further back than this guy's), all of which have only his name on them (severinsky) until toyota started talking about introducing a hybrid. his next patent, granted in 2001, added the name "paice corporation" (which he founded according to its website) as the patent's assignee for the first time and for the first time cites brochures and press releases from toyota as related material.
My_SS_RX8 12:56PM (9/04/2009)
sophie
Your comments reminded me of a prospectus I got a few months ago.
It was an offer to invest in a new "firm" which would buy businesses with promising patents, but without any actual products. The premise of this new investment firm was to purchase or invest heavily in quality small businesses with the sole purpose of then being bought out by a larger company.
Rich 1:10PM (9/04/2009)
Given that patents are designed to protect development of extant products, why is this case even being considered? Why are there trolls? Trolls like this should at least be made to prove they have made significant effort (not least, investment) into tooling up to manufacture or have manufactured a product.
Good for Toyota running roughshod over them, but it's disappointing they're still grabbing money for doing the legal equivalent of "FRIST!"
Judy Zik 2:42PM (9/04/2009)
Proof of just how broken the American patent system is. Anyone who does business in the US has to deal with these trolls whose only addition to the economy is to leach of other's hard work. If all a company does is own patents then they shouldn't be considered valid. It is one thing to patent something you are making to prevent rivals from copying. It is something else to patent a theoretical technology that you haven't produced and never will just to suck money out of people who manage to actually make one. Then there is the stupid software patents. What a big joke. Disney has to fight to keep Mickey Mouse out of the public domain but people are allowed to patent things they are never going to build.
PJ 2:50PM (9/04/2009)
Paice is indeed a patent troll. Or, as they like to be called, a "patent holding company." Such companies acquire and license third-party intellectual properties with no intention of actually manufacturing products--just suing those who do. Their profit model is based on the prosecution of companies who actually provide a service to customers, which, while perfectly legal, places their contribution to society 'round about a tapeworm's.
tankd0g 12:15AM (9/05/2009)
They are patent trolls and I don't understand what they hope to gain by halting imports if they were getting a royalty on every one of them?? It's not like that company actually makes a competing product.
Shiftright 11:10AM (9/04/2009)
So a Japanese company pilfered technology? Wow, next thing you know, we'll be hearing how Japanese companies never really invent anything just, use or improve someone else's technology. Shocking... I say this (in a sarcastic tone, obviously) with full respect due, however, to the quality of their engineering and products in general. It's just that I can't think of anything Asian auto companies have really invented. I'm open to corrections...
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Bloke 11:15AM (9/04/2009)
"It's just that I can't think of anything Asian auto companies have really invented."
Building cars that have true global demand, for one.
Shiftright 11:19AM (9/04/2009)
Oh snap!... I'll give you that one. You just can't argue with something that starts every time and runs for 200k miles with just an occasional car wash and oil change.
Yaroukh 12:42PM (9/04/2009)
@Bloke: I did not know VW with his Beetle is Asian automaker.
Bloke 4:00PM (9/04/2009)
"@Bloke: I did not know VW with his Beetle is Asian automaker."
The Beetle was popular worldwide, but the Japanese began the concept of popular and demanded models worldwide en masse. Names such as Nikon, Toyota, Canon, Nissan etc became household words worldwide with products everybody wants. You know that, I know that. So stop acting like a prat.
Alex 11:13AM (9/04/2009)
Does this impact anyone else who is making a parallel hybrid? Maybe i am remembering this wrong but i thought Toyota and Ford did some initial R&D together...
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