Toyota Faces Possible Import Ban Over Paice’s Patent Suit

The bankruptcies of Chrysler Group LLC and General Motors Corp. provided Toyota Motor Corp. (TM) with an unparalleled opportunity to increase U.S. market share. But now patent-infringement claims could result in a U.S. import ban on some of the company’s most popular hybrid cars.

McLean, Virginia-based Paice LLC has filed a complaint with the U.S. International Trade Commission (ITC) that claims the Toyota Camry infringes on its patents, Bloomberg News reported. An investigation into the claim could be completed within 15 months and result in a ban of some Toyota imports.

Paice, a developer of hybrid electric power train technology, in 2005 won a similar case against Toyota involving the Japanese carmaker’s Prius, Highlander and Lexus RX400h hybrid models. Paice claimed those vehicles used its drivetrain technologies, and a jury agreed, awarding the company $4.3 million in damages.

U.S. District Judge David Folsom rejected Paice’s request for a court order to halt the sales of Toyota vehicles in the United States, but he did force Toyota to pay royalties based on the cars’ wholesale prices.

Toyota appealed the claim but lost.

A similar ruling in this instance could be a huge blow to Toyota, whose hybrid vehicles were the main beneficiary of a shift in U.S. auto sales toward more fuel-efficient vehicles. The Camry was the best-selling vehicle in the nation last month, benefiting greatly from the U.S. Car Allowance Rebate System (CARS), popularly known as “Cash for Clunkers.”

New Toyotas accounted for 19% of the cars bought through the Clunkers program, and the company reported a year-over-year sales increase of 6.4%.

The company has sold more than 2 million hybrid vehicles worldwide since their launch in 1997. Those sales were led by the Prius model.

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