Austin, Texas-based Nano-Proprietary Inc., a small research and patent licensing firm, scored a major victory Feb. 22 against the world's third-largest patent holder, Tokyo-based Canon Inc. The ruling, which concludes a long-fought contract dispute, may thwart Canon's plans to enter the high-end TV market.
At issue was Nano-Proprietary's patent for surface-conduction electron-emitter display technology (SED), which adds to the brilliance and clarity of flat-panel TV displays. Nano-Proprietary had granted Canon a nonexclusive license to its SED patent, and specifically prohibited any sublicensing of these rights. The agreement did, however, allow Canon to share the technology with its subsidiaries.
Nano-Proprietary filed suit in 2004 accusing Canon of violating the agreement when it set up a venture with Toshiba Corp. to jointly develop SED televisions. Nano-Proprietary argued Toshiba was not a Canon subsidiary. After Nano-Proprietary filed suit, Canon began to buy shares of Toshiba in an attempt to claim it as a subsidiary. However, District Court Judge Sam Sparks ruled the buyout was too late.
The February ruling grants Nano-Proprietary's motion for summary judgment and entitles the company to terminate its license with Canon, which it effectively did in December 2006.