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Data-loss lawsuit costs Toshiba $1bn

Floppy drive controllers a little too floppy, it seems

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A lawsuit in the US over faults in Toshiba laptops has cost the vendor $1 billion. Toshiba was being sued over the floppy drive controllers (FDC) in its portable PCs in the Federal Court in Texas. Two owners of Toshiba notebooks alleged that a fault in the microcode for the disk controller: "May, under certain circumstances, cause data to be lost or corrupted as it is written to the floppy disk," Toshiba said. The two customers had asked for compensation for breach of warranty and other liabilities. Toshiba said it decided to settle the lawsuit to limit the amount of compensation a trial by jury could award. It added: "Toshiba wants to ensure its customers that the Toshiba brand name merits their trust." The Japanese manufacturer maintained that it had done so without admitting liability or that its notebooks had any technical problems or defects. Toshiba will fit its notebooks in the US with new FDCs from 8 November. Existing customers will get a software patch, "hardware solution", or cash refund. The company also revised its forecast, announced three days ago, for the current fiscal year ending 31 March 2000. It will incur an extraordinary loss of 110 billion yen ($1 billion) in connection with the settlement. This will raise its net loss forecast for the year to 50 billion yen. The settlement was said to affect six million notebooks which Toshiba had shipped in the U.S. since 1985. ®

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