Toyota patent trade case may threaten hybrid imports

Toyota Motor Corp., the world’s biggest seller of cars powered by a combination of gasoline and electricity, faces patent-infringement claims that may result in a U.S. import ban on some of its popular hybrid cars.

Paice LLC, based in McLean, Va., filed a complaint Thursday with the U.S. International Trade Commission in Washington, claiming Toyota is infringing its patents. It seeks an order to ban imports of products using its inventions. A copy of the filing wasn’t immediately available.

Closely held Paice won a jury verdict in 2005 that the Prius, Toyota Highlander and Lexus RX400h hybrid vehicles used Paice inventions related to drive trains. Another patent trial is set to begin Oct. 1 in federal court in Marshall, Texas.

The October trial involves Paice claims the Toyota Camry infringes the same patent that was at the heart of the 2005 trial, as well as two others. A second case, also pending in Marshall, involves claims of infringement of another patent by the Highlander and Lexus models.

The commission in Washington is set up to protect U.S. market from unfair trade practices, including patent-infringement. If it agrees to investigate Paice’s claims, the investigation could be completed in about 15 months. It has the power to order U.S. customs to block infringing products from entering the country.

In the 2004 case, the jury awarded $4.3 million in damages. U.S. District Judge David Folsom in Marshall rejected Paice’s request to issue a court order to halt sales of the Toyota vehicles. Instead, in April he ordered Toyota to pay royalties based on the wholesale prices equal to 0.48 percent for a Prius II, 0.32 percent for each Highlander and 0.26 percent for each Lexus RX400H. Toyota is appealing that order.

Since 2000, when Toyota introduced the Prius in the U.S., the company has sold 1.1 million hybrid cars and sport-utility vehicles in the market, including about 750,000 Prius units.

Toyota created the market for hybrid vehicles when it introduced the Prius in Japan in 1997. The company has set a goal of selling a million gasoline-electric vehicles annually beginning in the early 2010s.

The third-generation Prius, which went on sale in May, gets an average of 50 miles per gallon in combined city and highway driving, making it the most fuel-efficient gasoline-engine vehicle sold in the U.S., according to the Environmental Protection Agency.

The civil cases are Paice LLC v. Toyota Motor Corp., 04-cv-211; 07cv180 and 08-cv-261, U.S. District Court, Eastern District of Texas (Marshall).