Friday, July 09, 2004

Settlement of infringement suit related to batteries in Toyota Prius

Energy Conversion Devices, Inc. (ECD) will share in a $30-million settlement of a patent infringement suit in federal district court in Michigan arising from assertions that the use of nickel metal hydride batteries in the Toyota Prius fell within the scope of claims of a patent of its subsidiary, Ovonic Battery Co.

Under the deal, ECD and Ovonic Battery Co. Inc., will receive a $10-million fee from Matsushita Electric Industrial Co., Panasonic EV Energy Co., (who make the battery for the Prius) and Toyota Motor Corp.

As part of the complicated arrangement, Cobasys LLC, a company co-owned by Energy Conversion and ChevronTexaco Technology Ventures LLC, will receive $20 million, according to documents filed Wednesday, July 7, 2004, with the U.S. Securities and Exchange Commission.

On receiving the $20 million, Cobasys, in turn, will pay Ovonic Battery $8 million and ChevronTexaco $8 million as partial reimbursement of legal expenses.

Cobasys and Panasonic will then cross-license patents. The companies will collaborate on the batteries that are used in electric-gasoline hybrid vehicles.

The initial suit was brought by Ovonic Battery in U.S. District Court in Detroit in March 2001, asserting that Matsushita's hybrid electric-vehicle batteries, battery components and battery systems fell within the scope of claims of patents Ovonic Battery held.


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