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Judge rules against Canon in nanotube TV case

The decision puts another roadblock into Canon's effort to come out with a new style of flat screen TVs.

A federal judge has ruled that Canon breached a licensing agreement with a small nanotechnology company, a decision that puts another roadblock into Canon's effort to come out with a whole new style of flat screen TVs.

Judge Samuel Sparks, with the U.S. District Court for the Western District of Texas, ruled in a summary judgment Thursday that Canon violated its agreement with Texas-based Nano-Proprietary by forming a joint television venture with Toshiba.

Nano-Proprietary licensed its technology for making screens and displays out of carbon nanotubes to Canon in 1999. By bringing in Toshiba as a partner, Nano-Proprietary argued that Canon breached the agreement.

Canon, and until recently Toshiba, has been trying to bring to market a TV based around surface-conduction electron-emitter displays. In these displays, which are similar to Nano-Proprietary's, tiny particles blast electrons onto a screen and create images. The screens--in the lab at least--have a sharper resolution than LCD or plasma TVs but are far thinner than traditional cathode ray tube TVs. The project, however, has been subject to several delays.

Damages still need to be determined, a source close to the case said. Canon would also have to negotiate a new agreement if it wants to continue producing these kinds of TVs, assuming the summary judgment ruling stands after any appeals. The case was filed by Nano-Proprietary in 2005.

The case has played havoc with Toshiba's and Canon's plans to bring these TVs to market. Toshiba showed off a nanotube TV in October in Japan and stated it would come to market with a TV in late 2007. In December, however, the company abruptly cancelled plans to display its nanotube TV at CES in the coming January.

In late January, Toshiba transferred its interest in the joint venture to another company, SED Inc., which Canon controls.

Canon and Nano-Proprietary have been in settlement negotiations over the case for the last several weeks. A new licensing agreement between the two companies, therefore, could develop.