Antonov sues Toyota

Motor vehicle technology developer Antonov has launched a patent infringement action against Japanese car giant Toyota in Germany.

AIM-quoted Antonov, which is working on products to use the energy from transmission for gear changes in an economic way, alleges that the driveline installed by Toyota in its Prius and Lexis RX400h hybrid cars breaks its Patent EP 0414782. John Moore, an experienced industry figure who became chief executive of Antonov in January, says a preliminary hearing in Düsseldorf is set for Thursday.

'It is like poking a giant with a sharp stick,' comments Moore, who says loss-making Antonov first heard early this year there might be a possible infringement. The two companies have since then been negotiating a possible settlement, but, he adds, a recent offer from Toyota was not acceptable.

He says Antonov chose Germany as the place to sue because the system there is simple, 'non-adversarial' and relatively inexpensive. Antonov, which lost £775,000 in the first quarter of this year, has set aside £68,000 for the case and expects judgement, which will have legal force throughout Europe, next summer.

Toyota, for its part, has filed a counter-suit in Munich, alleging that the patent claimed by Antonov is not valid. Perversely, a decision in that case is not expected until a year to 18 months after judgement in Antonov's Düsseldorf action.

Even more ironically, according to Moore, Antonov, whose claimed patent runs until 2009, would need technology patented by Toyota to install the driveline into car gearboxes anyway. Essentially, this is a dispute about royalties between now and 2009.

Moore argues the Toyota litigation should be seen as a sideshow to Antonov's central projects: a small two-speed drive engine, a supercharger drive and a front-end accessory driver to run air conditioning and other functions at low as well as high speeds. The company was working with MG Rover and is now talking to Shanghai Automotive Industry Corporation about incorporating its technology into future gearboxes.

Floated by broker Brewing Dolphin at 24p ten years ago, Antonov shares grazed 190p in spring 2004, but now trade at 106.5p, valuing the company at £31.4 million. The appeal is decidedly speculative.