Digital Trends

Austin-based Nano-Proprietary has filed suit against Canon, arguing its technology can't be used in SED, Inc., a joint venture with Toshiba.

The development of flat-panel televisions based on SED (surface-conduction electron-emitter display) technology may be delayed by a lawsuit filed against Canon by U.S. technology developer Nano-Proprietary Inc. of Austin, Texas.

Back in 2003, Canon and Toshiba joined forces to create a joint venture company, SED Inc, split almost 50-50 between the two companies: Canon owns 50 percent plus one share, and Toshiba owns everything else. SED Inc. was charged with developing flat-panel television displays based in SED technology; in a nutshell, SEC displays are like CRT televisions, but pack an electron emitter into every pixel so they use less power (and are far thinner) than their CRT predecessors. In October 2006, Canon and Toshiba announced they planned to start mass production of SED televisions in early 2008; however, those plans may have to be put on hold in the face of Nano-Proprietary's suit.

Nano-Proprietary licensed technology used in SED displays to Canon; however, Nano-Proprietary is suing Canon claiming that SED Inc., is not a Canon subsidiary because, although Canon (barely) holds a majority stake, Toshiba still holds decision-making power over the company. Therefore, Canon's license of Nano-Proprietary technology can't be transferred to SED, Inc.: if they want to make SED TVs at the joint venture, they'll need to execute a new patent license. And Nano-Proprietary's case has been gathering some steam: in November, a judge refused to recognize SED, Inc., as a Canon subsidiary (PDF), allowing the case to move forward.

Japanese media outlets have offered contradictory reports on Canon's plans to resolve the situation; Nihon Keizai Shimbun reports Canon will increase its stake in SED, Inc., so that it can be counted as a legal subsidiary, while Asahi Shimbun reported Canon and Toshiba plan to shut down the joint venture later in January.