Toshiba files appeal in Lexar flash memory case

Toshiba will fight on against Lexar Media in a case involving intellectual property related to flash memory after a partial victory last week, it said Tuesday.

Toshiba on Friday succeeded in winning a reconsideration of damages of $465 million levied against it and a U.S. subsidiary, Toshiba America Electronic Components, after a case at the Superior Court of the State of California found Toshiba guilty of a number of wrongs including theft of trade secrets. The appeal was won after Toshiba argued there was insufficient evidence to support the damages.

However Toshiba's victory was only partial because it failed to get the basic guilty verdict overturned. The company said Tuesday that it has filed an appeal with California's Supreme Court over the judge's decision to honor the guilty verdict.

"Toshiba is very pleased with the court's ruling last Friday, vacating what we consider to be an erroneous verdict on damages," the company said in a statement. "Toshiba is appealing other rulings in an effort to correct what we believe to be erroneous verdicts on the trade secret and breach of fiduciary liability claims. 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."

The case between the two companies, both makers of flash memory chips, goes back to 1997 when Toshiba invested $3 million in Lexar and received a seat on the company's board. Toshiba was on Lexar's board for two and a half years during which time it gained access to the company's technology and its business plans while at the same time working with SanDisk Corp., a rival of Lexar, on plans to jointly develop flash memory chips, Lexar said during the case.

Flash memory is widely used in computers and digital consumer electronics products because of its ability to retain data when its power supply is disconnected.

The California jury ruled in March this year that Toshiba should pay Lexar $381 million in damages for breach of fiduciary duty and theft of trade secrets and $84 million in punitive damages.

Lexar Media was not immediately available for comment.