Toyota initially worked with Aisin, then dropped Aisin and took development in-house. Lacking a partner but having a partly complete design, Aisin hooked up with Volvo. Ford later bought Volvo and got the project. By the time they finished development, the Prius was on the market. They looked at the Prius, saw similarity and potential for misunderstanding, and approached Toyota. The two companies agreed not to consider each company's design as infringement on the other's.
I've seen both the Toyota PSD and the Ford CVT in model, diagram and cutaway form and there are
significant differences. But the general concept is the same, so I can see why the two companies made the agreement. Ford avoided a potential hassle, and Toyota got Ford technology regarding emissions and diesel technology, which they needed badly in Europe.
Bruce Nussbaum with BusinessWeek got an email from Ford regarding some statements he made in '95 about the Ford hybrid design. He vetted the information and printed the Ford email in its entirety as a sort of de facto retraction of his previous comments questioning whether Ford is "innovative" in their hybrid design. The piece is here:
http://www.businessweek.com/innovate...innovat_1.html
I also found this 1995 Bloomberg column informative:
http://quote.bloomberg.com/apps/news...olumnist_levin
Or see this opinion piece, written by Craig Van Batenburg, which (although it may be biased) sums up the situation and sequence of events more accurately than most stories out there in the regular media:
http://www.auto-careers.org/ford_esc...made_by_ai.htm