Paice LLC, a small Florida hybrid car technology company that won a patent infringement case against Toyota in 2005, has now brought the case to the International Trade Commission, which has the power to ban all Toyota hybrids banned from the United States. What's at stake for Toyota if its hybrids were banned from the US?

In 2008, Alex Severinksy was inducted in the University of Maryland’s Clark School of Engineering “Innovation Hall of Fame,” for his pioneering work in hybrid drivetrain systems. Paice LLC, Severinky's company, continues to fight Toyota for greater leverage over its hybrid patents.

"It doesn’t matter that Toyota might eventually have that decision overturned...Toyota would lose millions of dollars," Michael Murphy, a N.C.-based intellectual property lawyer and former electrical engineer, told Murphy has a deep understanding of both patent law and hybrid electrical systems.

The case won't be decided for another year and a half, but even the slight prospect of losing the case represents another pothole for Toyota, just one year after overtaking General Motors as the world’s largest car company. In recent months, the Japanese company reported its first corporate losses (to the tune of billions), a growing problem with quality, its biggest recall in history, and the decision to close its first factory in the United States.

Murphy explained that Paice’s intellectual property holdings consist entirely of patents originated by inventor Dr. Alex Severinsky, a Russian immigrant who is an electrical engineer by training. Severinsky began work on hybrid drivetrain concepts, by his statements, as early as the 1980s. When the US district court in Marshall, Tex.—well-known as a favorable environment for patent holders—ruled that Toyota did indeed infringe upon Paice’s hybrid patent, the court forced the company to pay a “compulsory license” to Paice of about $100 per hybrid car.

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