Damages in Lexar Case Rise to $465 Million
Electronics maker Toshiba Corp. and a subsidiary were ordered to pay Lexar Media Inc. $84 million in punitive damages Thursday for sharing trade secrets with another rival maker of flash memory chips used in digital cameras, music players and other devices.
The decision came a day after the same Santa Clara County jury awarded Lexar a total of $381.4 million after finding Toshiba liable for theft of trade secrets and violating its fiduciary duty. The total award now stands at $465.4 million -- less than half the $1 billion sought by Lexar.
“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,” said Eric Whitaker, Lexar’s general counsel. “This is a huge victory not just for Lexar but for innovative companies everywhere.”
Toshiba has declined to comment on the case, as other matters remain unresolved. Next month, Lexar will ask the court for an injunction that bars sales of Toshiba products using Lexar’s technology in the United States.
Lexar also is pursuing an unfair-business-practices claim, on which the judge is expected to decide next month. Lexar also is pursuing patent-infringement claims in federal court.
Shares of Fremont, Calif.-based Lexar rose $3.15, nearly doubling, to $6.32 in Thursday trading on Nasdaq. They lost 63 cents, or nearly 10%, in extended trading. Shares remain far below the 52-week high of $18.55.
Whitaker said jurors wanted to send a message to Japan-based Toshiba and believed the total award would do just that.
“I think it will get their attention in Tokyo and send a message that our [intellectual property] is valuable -- and what they did is wrong,” he said.
In the lawsuit filed in 2002, Lexar claimed that its secrets were misappropriated when then-partner Toshiba entered into a deal with SanDisk Corp., another memory chip maker and Lexar’s biggest competitor. At the time, Toshiba had a representative on Lexar’s board.
