Jury Awards Lexar $465 Million From Toshiba

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*March 25, 2005 *— Lexar emerged victor in Lexar Media, Inc. v. Toshiba Corporation in the largest IP case in California history. The trial began in Santa Clara County six weeks ago and ended yesterday with a total of $465.4 million awarded to Lexar. Toshiba was found guilty of theft of trade secrets related to Lexar’s technologies in NAND flash chips, CompactFlash cards, Secure Digital cards, and xD-Picture cards.

Before the trial, Lexar’s executive vice president Eric Whitaker stated, "We will prove that Toshiba convinced Lexar to divulge its most confidential technical and business information with promises of a long-term, strategic partnership, while secretly planning to partner instead with one of Lexar’s competitors. Even worse, Toshiba demanded a seat on Lexar’s Board of Directors, and then funneled Lexar’s confidential information to our competitor and attempted to shut Lexar out of key business opportunities."

For these reasons, the jury awarded $84 million in punitive damages and $381.4 million in issued damages to Lexar Media, Inc. "The additional award for punitive damages resulted when the jury found that Toshiba Corporation’s actions were oppressive, fraudulent or malicious," stated a Lexar press release.

"It holds Toshiba accountable for its conduct — building Lexar’s trust to acquire our technology and then betraying that trust to partner with our competitor and compete against us," Whitaker said. "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."

Today, Toshiba issued a brief release stating, "Toshiba believes that the verdict by the jury was in error, and we plan to pursue all available legal avenues to correct it." While Toshiba plans its recourse, Lexar is planning on pursuing a claim for unfair competition and patent violations and will have a hearing April 13. "Lexar intends to ask the court for an injunction that bars the sale of Toshiba’s products in the United States," a Lexar press release stated.

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