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Toshiba Seeks Higher Court Help in Lexar Suit

Days after the California Superior Court granted Toshiba's motion for a new trial in its ongoing legal suit with rival Lexar Media, Toshiba said it will appeal to a higher court to prove that it did not misuse NAND Flash trade secrets from Lexar.

Last Friday, the court ordered a limited new trial regarding the $465 million in damages awarded to Lexar on the basis that there was insufficient evidence to support the damages awarded by the jury.

While that decision favored Toshiba, the court also denied Toshiba's motion for judgment notwithstanding the verdict (JNOV) and also denied all other aspects of Toshiba's motion for a new trial.

Toshiba filed an appeal for this decision late Monday to the Superior Court in California asking for a new trial on damages on the grounds that there was insufficient evidence to support the judgment.

Both companies are appealing those portions of the court's Dec. 2 order denying JNOV, the practice in American courts where the judge in a civil case may overrule the decision of a jury and judge in favor of the opposing party.

Overall, Toshiba said it was pleased with the court's decision last Friday to order a new trial for certain aspects of the case, but that isn't enough.

"Toshiba is appealing other rulings in an effort to correct that what we believe to be erroneous verdicts on the trade secret and breach of fiduciary liability claims," the company said in a statement."

"We have strongly contested the allegations and denied wrongdoing throughout the proceedings, and will continue to pursue all legal avenues to arrive at a just outcome to this matter."

In 2002, Lexar accused Toshiba of misappropriating trade secrets and breaching fiduciary duty relating to NAND Flash memory, an increasingly popular form of digital memory used in certain MP3 players, such as the iPod Nano.

Lexar and Toshiba both make Flash memory storage cards used in digital devices, and both companies stand to win or lose quite a bit from this case, which could take years to settle.

The case has roots to 1996, when Lexar alleged that Toshiba invested in and secured a seat on the Lexar board only to take the technology and use it for its own gain.

Lexar further claimed Toshiba began talks with Lexar rival SanDisk after accessing Lexar technical information. Toshiba later resigned its seat on the board and announced its relationship with SanDisk. Lexar sued Toshiba in 2002.

Toshiba tried to argue that it developed the technology in question, but Lexar counsel discovered a paper trail of Toshiba's own internal documents.



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