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Toyota settles Prius patent dispute with tech firm

By Dan Strumpf
AP Auto Writer / July 19, 2010

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NEW YORK—Toyota Motor Corp. said Monday it has settled a years-long dispute with a U.S. company that had claimed the Japanese automaker used its technology without permission in its hybrids. The deal ends a squabble that had briefly threatened to block the Prius from being sold in the U.S.

Toyota and Paice LLC said they have settled their patent dispute and agreed to have all lawsuits between them dismissed. The terms were confidential, the companies said. No financial details were disclosed.

"After six years of litigation, we are pleased to reach a settlement with Toyota," said Frances Keenan, chairman of the Paice board, in a statement.

Paice, based in Bonita Springs, Fla., had claimed that popular Toyota hybrids like the third-generation Prius and the Lexus HS250h contain technology that violated Paice's patents for hybrid engines.

Paice first sued Toyota in 2004 claiming infringment and filed a second lawsuit against the automaker in 2007. Paice asked U.S. trade regulators to block the import of the vehicles to the U.S. Last October, the International Trade Commission, the Washington, D.C.-based body that investigates claims of trade violations, agreed to open its own investigation into the patent dispute.

A trial had been scheduled to begin Monday. If the ITC had sided with Paice, a number of penalties could have followed, including a possible ban on the import of the hybrids using the patented technology.

Toyota and Paice say they have agreed that although Toyota's hybrids contain technology equivalent to that made by Paice, Toyota developed its hybrid technology independently.

On Friday, Paice said it reached an agreement to license its hybrid vehicle technology to Ford Motor Co.

U.S.-listed shares of Toyota fell 43 cents to close at $71.18.