Business

Toshiba to pay ¥87 million to settle suit

Electronics giant Toshiba Corp. agreed Thursday to pay 87 million yen to a former engineer to settle a lawsuit before the Tokyo District Court in which he sought some 1 billion yen from the royalties made from patents on his flash memory invention.

Fujio Masuoka, 63, became a professor at Tohoku University in Sendai after leaving Toshiba.

“It is a settlement that encourages inventors,” Masuoka told a news conference. “The sum provided in the settlement is incredibly large compared with the 6 million yen I had been given as a reward for my inventions. It is a big step forward.”

Toshiba said in a statement that it agreed on the comprehensive settlement as the court substantially took into consideration the company’s policies and arguments.

In the suit, Masuoka said he developed two types of flash memory, one in 1980 and another in 1987, while he was working at Toshiba, and the company obtained 41 patents from the inventions.

He estimated Toshiba gained at least 20 billion yen from the patent royalties and exclusive sales of the flash memory products at home and abroad.

He claimed he should have been entitled to 8 billion yen as a result and sought 1 billion yen in a suit filed in March 2004 at the court.

Toshiba contended that the inventions were not attributable to Masuoka only.

Flash memory is widely used in mobile phones and digital cameras.

Masuoka’s case came after similar suits were filed by former employees against companies concerning patent rights, with courts ordering large payments.

In one case in 2004, the Tokyo District Court ordered chemical maker Nichia Corp. to pay 20 billion yen to a former employee, Shuji Nakamura, for his transfer to Nichia of patent rights on the blue light-emitting diode he developed at the company based in Tokushima Prefecture. The award was the largest-ever in Japan in a patent suit.

At an appeals court, the former employee and the company reached a settlement with a payment of 843 million yen on Jan. 11, 2005.

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