SED, a joint venture set up between Toshiba and Canon in 2004, makes large screen flat panel displays and televisions using surface-conduction electron emitter displays (SEDs). The displays generate light by controlling the collision of electrons with a phosphor-coated screen and are thought to produce brighter pictures and be more energy efficient than liquid display, plasma and regular cathode ray tubes.
Both Toshiba and Canon hope the sell off will end a patent lawsuit filed by Nano-Proprietary Inc, an Austin, Texas-based patent licensing firm that licensed the SED technology to Cana for use in its displays back in 1999.
Nano-Proprietary filed the suit in April 2005 against Canon and its US subsidiary Canon USA, asserting that the SED Inc joint venture was not part of their original licensing agreement and was therefore not eligible to use the technology.
Both sides are expected to meet in court in March this year. Canon hopes that by assuming full ownership of the SED unit, which is expected to be complete by the end of January, it will avoid a prolonged litigation battle with Nano-Proprietary.
Toshiba said that SED engineers will continue to work on new SED television sets that are expected to hit the market in Japan in the fourth quarter of this year.
Canon is banking on SED set to challenge thin television panel rivals Samsung Electronics and Matsushita Electric Industrial Co Ltd.
However some analysts are skeptical that SED can be cost-effective enough to catch up with LCD and plasma television sets in the mainstream consumer market.
That uncertainty might be one reason why Canon is now revisiting its original plan to build a $1.5bn factory to mass produce SED displays at a Toshiba-owned site in Japan.
Canon and Toshiba have already delayed the launch of SED, originally slated for last March, to the latter part of 2007 over price competitiveness concerns.
