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Last Updated: Wednesday, 12 April 2006, 09:59 GMT 10:59 UK
Lexar seeks ban on Toshiba chips
Lexar memory card
Lexar makes a wide range of memory chips
Lexar Media has escalated a patent spat with electronics firm Toshiba, calling for the US to ban imported memory cards that are made by its Japanese rival.

The row stems from a 2005 court case in which Toshiba was found guilty of stealing Lexar's trade secrets. Toshiba is appealing against the verdict.

Lexar wants to ban imports of Nand chips, which are used in digital music players, cameras and mobile phones.

If the ban were imposed, it could hurt Toshiba's earnings, analysts said.

Share slide

"Flash memory constitutes a large part of Toshiba's earnings and if there were an import ban on its products containing Nand chips, then there is the potential for a large impact on earnings," said Tatsuya Matsuno of Fitch Ratings.

A US court ruled in 2005 that Toshiba had breached its fiduciary duty and theft of trade secrets, and awarded Lexar damages of $465m (265m).

Based on that ruling, Lexar has asked the International Trade Commission (ITC), a US agency that investigates patent violations and allegations of unfair trade, to ban the imports of Toshiba-made chips and products that use them.

Shares of Toshiba dropped 2.6% to 708 yen on Wednesday.

Lexar is in the process of being bought by Micron for $680m.

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