A day to forget for Toshiba. HD-DVD gets kicked in the teeth by Paramount, HP and Dell. And it may have to fork out almost half a billion bucks because a US jury said it thieved trade secrets from memory-card maker Lexar.
Now we have the movie makers split over whether to support Blu-ray or HD-DVD just as the PC/notebook world is dividing into the HD-DVD-supporting Intel and Microsoft, and the Blu-ray-supporting H-P and Dell.
Toys are being thrown out of the pram here.
As if it were not bad enougfh for Toshiba, to have an HD-DVD backer suddenly see the Blu-ray light, it has lost a court case in California against Lexar, a memory card company. A judge has affirmed that a jury trying a trade secrets case did have the right to award a cool $456 million award to Lexar against Toshiba last March. Toshiba appealed.
What! Half a billion bucks! Where did that one come from? This was the largest-ever intellectual property theft award in California courts and third-largest in the USA.
It relates to Toshiba's NAND flash chips using Lexar IP. According to a News Journal India report The Lexar case "alleges that Toshiba invested $3 million in Lexar and asked for and received a seat on Lexars board in 1997. At the time, Toshiba received extensive confidential information, including Lexars highly confidential patent applications, according to Lexar."
Also "Lexar, one of the largest makers of memory cards and USB drives, contended that Toshiba stole its NAND flash memory inventions while partnering with the company, only to turn around and begin to work with Lexar Medias arch rival, SanDisk."
And "Eric S. Whitaker, vice president of corporate strategy and general counsel for Lexar, said the financial penalties were just punishment for Toshiba. Youve got to be able to trust your partners, he said. Toshiba was on our board, talking about more partnerships, and meanwhile they were planning to work with SanDisk. We thought Toshiba was going to be our partners for the long term.
Instead, as Eric might have said, it was just tosh.
Final judgement in this case is expected within seven days. Whether final means final is something only the US legal system can decide. With half a billion at stake Tosh's lawyers will be doing everything they can. Perhaps the movie of this will be distributed by Paramount on a Blu-ray disk. Ho ho ho.
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