• Car giant flexes financial muscle with costly counter action in Japan
• Antonov says move is ‘posturing and precipitous’ and reveals Toyota’s nervousness over pending European patent judgement
• Antonov patents fundamental to hybrid vehicle driveline developments
• Patents cover the use of a drivetrain which balances the drive from an engine and an electric motor with the load from a vehicle and a generator

Antonov, an automotive technology company, has just discovered that on 15th February 2006 the Toyota Motor Company initiated a law suit in Japan challenging the validity of one of Antonov’s Japanese patents JP 2894760 which is fundamental to hybrid vehicle developments.

Antonov believes that Toyota's hard-line action in Japan indicates its apparent lack of confidence with regards to winning the German court judgement expected in August this year and is attempting to force Antonov to negotiate a settlement under the threat of significant costs incurred via the courts in Japan.

Antonov says it will defend its Japanese patent fully and has in place a ‘put and call’ option to the value of €2 million to underwrite the necessary defence to Toyota’s aggressive action, with additional funding facilities available if required.

Antonov and its legal advisers remain firmly of the view that Toyota's second generation Prius vehicle infringes the company's intellectual property rights. This view is endorsed by the fact that Antonov has already rejected an unrealistically low offer from Toyota to settle, forcing the company to seek compensation through the German court system, which provides a relatively swift and cost effective route to a legally binding decision with the entire process expected to cost Antonov no more than €100,000.

Commenting on the car giant’s uncompromising tactics Antonov chief executive John Moore said: "Toyota must be made aware that its recent aggressive strategy will not intimidate Antonov in its defence of its patents.  However, we are prepared to be reasonable and co-operate with Toyota on realistic terms."

He added: "As I have said before, we would not have taken legal action against Toyota unless we were confident that we had a strong case. It is crucial that we protect our patents and seek royalty payments in respect of all products manufactured using our designs or sold in the territories where our patent cover exists. We believe that Toyota has not only infringed our patents but also licensed our technology to other manufacturers and we look forward to the German court's judgement in August."

Over the past 15 years, Antonov has made substantial investments in a range of technologies with the common goal of improving the fuel efficiency of cars. Licences have been granted on reasonable terms to companies such as Honda interested in applying these technologies to their vehicles and a number of these technologies are on course for high volume production application. Others are at an earlier stage of development. As a result of these significant investments, Antonov says it has no choice but to vigorously defend its intellectual property when challenged.

Antonov’s patents are filed in the UK, Germany, France, Spain, Italy and Japan.

The company filed its action against Toyota in April 2005 at the patent court in Düsseldorf alleging infringement of its patents by the driveline of the Toyota Prius and Lexus RX400h. The case received its preliminary hearing on 22nd September 2005 having previously been postponed by the company to allow further negotiations with Toyota. In line with Antonov’s expectations, the court announced that an oral hearing for the case will be heard on 29th August 2006. Prior to this hearing, the courts have set a timetable for the parties to prepare their submissions. Toyota had until 16th January 2006 to respond to Antonov’s writ. Antonov has the opportunity to address Toyota’s response by 2nd May 2006. Toyota then has a final opportunity to refine its defence by 7th August 2006 shortly before the oral hearing.

Antonov’s legal action in Europe was taken after a process of in-depth consultation with patent, legal and automotive industry experts. The action has been taken in Germany, as the German legal system provides a relatively rapid and cost effective route to a legally binding decision. Antonov expects that the entire process should cost in the region of €100,000.

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