In a patent dispute over flat-panel displays a US court has ruled against Japan“s Canon Inc., saying the company violated the license agreement it had with Nano-Proprietary Inc.
The ruling is a blow…
In a patent dispute over flat-panel displays a US court has ruled against Japan“s Canon Inc., saying the company violated the license agreement it had with Nano-Proprietary Inc. The ruling is a blow to Canon“s plans to enter the USD 84 billion global flat-TV market using technology owned by Texas-based Nano-Proprietary. In a ruling issued on 22 February 2007, Judge Samuel Sparks of the US District Court for the Western District of Texas said Nano-Proprietary had the right to terminate the license agreement it signed with Canon in 1999. Nano-Proprietary“s technology is used for surface-conduction electron-emitter displays (SED) TVs, which are said to have brighter pictures and consume less energy than LCD and plasma models. Nano-Proprietary had filed a suit after Canon set up a venture with Toshiba Corp. in 2004 to jointly develop SEDs, claiming that its license deal with Canon did not extend to the new Japanese partner. The disagreement pushed Canon to decide to buy out the shares Toshiba owned in the unit, SED Ltd., but Nano-Proprietary said that this move alone would not resolve 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”, Sparks said in the ruling. “It occurred more than a year and a half after Canon was on notice of its breach”. Canon had hoped to commercialize SED televisions to challenge electronics giants such as Samsung Electronics and Matsushita Electric Industrial Co. Ltd. But without expertise in televisions, Tokyo-based Canon has said it planned to outsource the manufacturing of the television sets to Toshiba while making the panels on its own. Canon has also said it is reviewing its initial plan to build a JPY 180 billion (USD 1.48 billion) plant in 2007 at a site owned by Toshiba in western Japan to produce the panels. Instead, the company aims to start producing SED panels at a smaller site and begin limited sales of the televisions in Japan in the 4Q 2007. But without a plan for full-scale production, the legal dispute with Nano-Proprietary brings new risks to the Japanese firm. Canon, the world“s top maker of copiers and digital cameras, had hoped the display business would become a new driver of profit as it expects declining demand in its existing core products. A Tokyo-based Canon spokesman declined to comment, saying the lawsuit was still in progress. A source close to the matter told Reuters the trial would proceed to assess the damages due to Nano-Proprietary, and that a possible new license deal could materialize.