Wednesday, October 07, 2009

Lawsuits Fly, and the Consumers May Pay..

Patent Case Could Potentially End the Prius in the US ...

A copyright infringement case against Toyota from a small Florida company could mean the end of the popular Toyota Prius and other hybrid car models in the US. Paice LLC is claiming that Toyota is using their copyrighted design for their hybrid vehicles in the new generation Prius, Camry and Lexus RX450h and HS250h models.

We'll try to describe this as simply as possible: Not all hybrid systems are the same. Other manufacturers use a battery pack and combustion engine, however, Toyota has what they call Synergy Drive. It basically recharges the battery pack everytime you step on the brake, which improves torque, and allows you to use the combustible engine less, which is why a Prius gets 50-60 MPG, and a Civic gets 42 MPG.

Apparently, Paice has the rights to the design, and they've been fighting over this with Toyota previously. In 2005 , Paice sued Toyota in civil court, and now they get a nice little check for every one of the 1.1 million hybrids that Toyota has sold in the US. So, they basically get paid for doing nothing . But, that money was only for the previous Prius model, along with the Highlander and Lexus RX400h models. New models are out, so Paice is suing again, but this time, they're going for all the marbles...

This suit is being filed in the US International Trade Commission, and they have the power to block imports from entering the US. They can't rule monetarily.... So, Paice appears to want to supply all of the hybrid systems in the US for Toyota. This is a very risky move. Breaking into the auto supply business is not easy, and it can be very costly, because there is no guarantee that Toyota won't design their own, cut out Paice, and leave them high and dry with a factory full of hybrid engines. And all the other manufacturers sit on the sidelines, awaiting the decision.

Of course, as all of this mess continues, the American consumers sit on the side and wait to see if they can even get a Prius anymore, ot if they'll have to settle for an inferior American product. My guess is that Paice will get it's case tossed out, and then Paice will go back to civil court to get some more residual checks...

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3 comments:

Thoroughbred 401k said...

I KNEW that one would stick in someone's side te wrong way. Synergy drive is a superior hybrid technology, so I guess I'm including Honda, along with the American models.

Anonymous said...

Your statement that Paice LLC "basically get paid for doing nothing" because a US court ruled that Toyota infringed upon their copyright is incorrect, ignorant, and completely backwards.

Copyright laws are meant specifically to protect such unique developments from being utilized without permission.

It is TOYOTA that has been enjoying the benefit of a superior technology they did not develop. The arrogance to lose a civil case on the very matter then continue to use the same technology in new models (again without consent or compensation) is appalling and should be severely punished.

So just who is getting paid for doing nothing? It sure seems like Toyota has been.

Through corporate bailouts we, the American taxpayers, support the ineptitude of the American automakers AND now we should continue to pay a Japanese automaker for US developed technology?

When are we going to learn that meritocracy needs to go hand in hand with capitalism? Let's reward those that innovate rather than those bullies that steal innovation.

Bruce in Chicagoland

Thoroughbred 401k said...

Bruce, I'll give you your point on that. A more correct statement would have been that they don't have to do anything now, and they still get paid, although no one was paying them when they developed the system.

One of my favorite movies was 'Tucker: The Man and His Dream'... If there's anything that movie showed, it was that big automakers are slow to innovate.

I suppose my main point was what if Paice gets what they are asking for, and they stop Toyota from using it? Developing a single prototype and mass producing hundreds of thousands of hybrid systems a year are two separate things. Are they prepared to do this? If not, the real losers are the consumers.

I wonder why Paice and Toyota didn't have a settlement for future models with the Synergy Drive set in place as well. It would have made sense to have an agreement in place after the first suit.