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Judge Rules Against Canon’s SED TV Bid

2/23/2007 12:31:00 PM Eastern

Austin, Texas. — The future for a next-generation flat-panel TV technology called SED looked a little dimmer Thursday following a federal judge’s ruling that Canon violated a licensing agreement for a key piece of intellectual property.

Judge Samuel Sparks of the U.S. District Court for the Western District of Texas ruled in a summary judgment that Canon violated an agreement with Texas-based Nano-Proprietary when it formed a joint venture company with Toshiba to manufacture SED TVs. The ruling acknowledged Nano-Proprietary’s right to terminate its agreement with Canon.

In 1999, Nano-Proprietary licensed to Canon a process it developed for making screens and displays out of carbon nanotubes. Canon later set up a joint venture company with Toshiba to produce SED TVs using contributions from both manufacturers in addition to Nano-Proprietary’s licensed carbon nanotube technology.

Nano-Proprietary, which sought further compensation from Toshiba, said its license agreement with Canon didn’t extend to a third party and sued Canon to halt the use of its technology in 2005.

In a late effort to comply with the agreement last month, Toshiba relinquished its interest in SED, Inc., leaving Canon in control. But Judge Sparks still ruled that Nano-Proprietary had a right to cancel the license with Canon. The ruling stated that “breach is measured at the time it occurs, not at the time of trial.”

Representatives of Canon and Toshiba did not respond to queries for comment as this was posted.

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