James Delahunty
28 Feb 2007 8:27
Canon Inc. recently lost a license to an important patent related to surface-conduction electron-emitter display (SED) flat panel TVs. The Japanese firm originally paid $5.6 million for the patent license, which is a deal considering Canon planned to enter the $84 billion global flat-panel TV market using the technology. However, the firm made its first mistake by forming a joint venture with Toshiba to produce SEDs.
The US-based owner of the patent, Nano-Proprietary Inc. contested that the license held by Canon did not extend to Toshiba, and in an attempt to resolve the situation, reached out to Toshiba to strike a separate license agreement. Canon made another mistake then by blocking talks between Toshiba and Nano-Proprietary.
Canon claimed that the joint venture with Toshiba was in fact, a subsidiary of Canon because the firm's 50% stake included one more share than Toshiba's stake. Nano-Proprietary sued Canon in April 2005, pitting itself against a company that has $35 billion in annual revenue as well as 500 employed intellectual property experts.
In an attempt from Canon to resolve the situation, the company decided to buy Toshiba's stake, but Judge Sam Sparks of Texas said the move came too late from Canon. The two sides are now reportedly working to reach a settlement before a court decision on damages due to Nano-Proprietary.
"It seems strange Canon managed to go all the way to trial and lose," said Peter Godwin, a Tokyo-based partner at law firm Herbert Smith. "Assuming they were advised they were at risk, you'd expect a company of the size of Canon to have reached a settlement before that."
Canon and Nano-Proprietary would now have to reach a new licensing deal, which is expected to cost many millions more than the original deal and could be on a "pay as you use" basis, having a huge impact on Canon's profitability. If rumors are true, Samsung may have also recently approached Nano-Proprietary to get access to SED technology.
"We will talk to Canon, Toshiba, Samsung or any interested party regarding SED licensing agreement on a non-exclusive or exclusive basis," Nano-Proprietary spokesman William Spina said.
Source:
Reuters