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Judge rules against Canon, Inc., Nano-Proprietary has option to terminate SED agreement

The legal battle between Canon, Inc. and Nano-Proprietary, may have reached an end on Thursday.  A U.S. court ruled against Japan's Canon, Inc. in the licensing dispute over Nano-Proprietary's surface-conduction electron-emitter displays.

Nano-Proprietary now has the right to terminate its license agreement with Canon it had made in 1999, according to the ruling by Judge Samuel Sparks of the U.S. District Court for the Western District of Texas.

The licensing dispute was triggered when Canon licensed its agreement on the technology with Toshiba Corp. for manufacturing.  The venture was then deemed an infringement on the agreement between Canon and Nano-Proprietary.  Nano-Proprietary claimed that the licensing deal did not extend to Toshiba Corp.

Before the legal battle panned out, Canon announced it would buy out all of Toshiba's shares in the joint venture, Nano-Proprietary stuck to its guns, stating that the decision would not change the company's stance in the litigation. 

"Canon's recent restructuring of SED as a wholly owned subsidiary is ineffective to prevent termination because this effort to cure the breach was not undertaken within a reasonable time.  It occurred more than a year and a half after Canon was on notice of its breach." commented Judge Sparks on Canon's move to prevent the termination of the agreement.

The production of the SED display was anticipated to boost Canon's revenue, with the company trying to get its foot in the door of the $84 billion flat-panel display market.  Because of its new presence in the scene, Canon had extended out its license to the SED technology in order to acquire more experienced flat-panel manufacturers

According to Reuters, the Tokyo-based company reassessed its plan to build a 180 billion Yen ($1.48 billion USD) factory in Western Japan for flat-panel mass production.  Even with the latest news in the lawsuit, Canon still aims to produce SED panels at a smaller site and wants to keep Japan availability for the fourth quarter of this year.

Nano-Proprietary stated last month in a press release that even though Canon had infringed on the license agreement, the Texas-based company would be willing to sign a new agreement post-litigation.

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both of you
By sprockkets on 2/25/2007 3:21:03 AM , Rating: 3
SED looks nice. Just kiss and make up before billions of development go to making SED DOA (though OLED may do that for you..)




RE: both of you
By skyyspam on 2/25/2007 7:26:26 AM , Rating: 3
Ugh. This isn't the worst news we could get concerning SEDs, but it does seem likely to cause a few delays in getting them out to the market.

I want my SED, damn it.


RE: both of you
By Pneumothorax on 2/25/2007 11:47:24 AM , Rating: 2
I also am awaiting SED displays as the promise of CRT quality in a flat panel format is exciting. This case sounds like biting the hand that feeds you as Canon seems to be the only big company focused on SEDs. If this company forces Canon to pay huge fees they might just decide to go with another tech for their flat panels leaving SED stillborn.


RE: both of you
By Oregonian2 on 2/27/2007 3:14:01 PM , Rating: 2
Seems likely the case unless their prototypes looked like to be real winners in terms of delivering quality in a market of rapidly declining prices, especially from the LCDs that are attacking the larger sized screens slowly by slowly (well, not so slow) not to speak about other emerging technologies that are supposed to be priced-right (like the new laser-based one). It would be first-generation SED vs zillionth generation Plasma, LCD, or DLP. The longer things take to get out, the harder it will be to make it a worthwhile risk to invest in. And things like this don't exactly speed things up.


RE: both of you
By porkpie on 3/5/2007 12:24:31 PM , Rating: 2
seems like a dumb move for NanoProprietary to bash their one and only customer like this.


Something smells funny...
By daftrok on 2/25/2007 1:17:47 PM , Rating: 3
Why is Nano-Proprietary so pissed off with Canon for going to Toshiba for MANUFACTURING? At first I thought that because it is an infringement and it can hold water in court (which it did) and they can get some money off of it. But wouldn't have been more lucrative to just forget about it at this point and push SED technology sooner? According to the specifications: it looks amazing, it takes less power consumption, it makes your coffee, and is cheaper. I think Nano-Proprietary is purposefully delaying SED for another reason and I think it may have something to do with the technology.




RE: Something smells funny...
By Whedonic on 2/25/2007 1:54:42 PM , Rating: 2
It's probably because Canon didn't let Nano-Proprietary haggle over the manufacturing contract. Since they are the ones who really own the technology, they might've felt that Canon was trying to completely take over all aspects, as opposed to only what was in their contract.


RE: Something smells funny...
By Oregonian2 on 2/27/2007 3:18:04 PM , Rating: 2
I think it more likely that Canon got good terms because the contract was made so very long ago. Now that they've been working on it and spent development R&D money on it, Nano-P. is in a LOT better position to negotiate much better terms, but only if they can get out of their previous contract. Which they have done. But it also opens the risk that the highly price-competitive market would make such negotiations difficult, and any delay is letting other technologies run market prices down further.


Needs broader licensing
By OddTSi on 2/25/2007 2:39:22 PM , Rating: 2
I'm wondering if Canon is the only one interested in this or if they simply signed an exclusive licensing deal. If it's the latter maybe this will be the opportunity to license this to many companies. That would be best for us (potential customers) since it would provide lots of competition to help improve the technology faster and bring the prices down faster.




RE: Needs broader licensing
By 13Gigatons on 2/26/2007 12:21:31 PM , Rating: 2
The 5.6 million payout to Nano was non-exclusive which means any other tv maker could produce sed tv's but you have to realize they have already invested billions in LCD and Plasma and it might not make sense to produce sed tv's on large scale or even a small scale.

With Canon it was their first push into the TV market so it made perfect sense.


It's about MONEY !!!!
By 13Gigatons on 2/26/2007 12:12:16 PM , Rating: 2
Canon began work on SED in 1986, in 1999 they paid Nano 5.6 million one time payment to use their IP. The only IP that Nanotech owns is the use of carbontubes for SED.

Canon realized they didn't have enough experience in TV production and formed a joint startup with Toshiba called SED, inc. In order to stay true to their deal with Nano, Canon would have one voting share more then Tosihba but agreed they would never use it agianst Tosihba. Canon thought they had outsmarted Nano.

Flash foward to the Texas judge who said, “Dead fish don’t swim, dead dogs don’t hunt and Canon’s dead voting rights don’t give it a majority of SED.” So that means that Canon and Tosihba are equal partners which means the deal with Nano is in breech.

So now if Canon wants to launch SED in the USA or elsewhere in the world that Nanotech has the IP recognized they will have to pay Nanotech more money plus royalties.

If only Canon and Tosihba had set up the joint venture properly they would be in beginning to build the huge 1.7 billion fab needed to produce millions of SED TV's.




Something smells funny...
By daftrok on 2/25/2007 1:18:31 PM , Rating: 1
Why is Nano-Proprietary so pissed off with Canon for going to Toshiba for MANUFACTURING? At first I thought that because it is an infringement and it can hold water in court (which it did) and they can get some money off of it. But wouldn't have been more lucrative to just forget about it at this point and push SED technology sooner? According to the specifications: it looks amazing, it takes less power consumption, it makes your coffee, and is cheaper. I think Nano-Proprietary is purposefully delaying SED for another reason and I think it may have something to do with the technology.




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