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A patent dispute over who could use licensed field-emission technology prompted Toshiba to leave the SED joint venture in January 2007. Canon took full ownership of SED Inc., but the change did not end the litigation: Nano-Proprietary said the dispute remained pending. Toshiba gave up panel production, yet planned to buy panels from SED Inc. and continue contributing television technology.
Why did Toshiba leave the SED joint venture?
The immediate issue was the structure of SED Inc. Nano-Proprietary owned field-emission display patents and had licensed technology to Canon in 1999, with use restricted to Canon subsidiaries. When Canon and Toshiba established SED Inc. in 2004, they owned it nearly equally. Nano-Proprietary argued that the jointly owned company was not a Canon subsidiary and therefore could not use the licensed technology under the existing terms.
Nano-Proprietary sued in 2005. On January 12, 2007, EE Times reported that Canon and Toshiba had agreed to end their joint venture: Toshiba would transfer its shares to Canon, leaving SED Inc. wholly owned by Canon as of January 29, 2007. The restructuring removed the shared-ownership arrangement at the center of the subsidiary argument, but did not settle the broader legal dispute.
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| Issue | Canon | Toshiba |
|---|---|---|
| Ownership and legal position | Became SED Inc.’s sole owner. Canon said it believed the ownership change would settle the dispute with Nano-Proprietary. | Transferred its shares and withdrew from SED Inc., ending its joint-venture ownership. |
| Panel production | Retained SED Inc. and its panel-production effort, but still needed to restart planning for volume production. | Withdrew from SED panel production and said it would purchase panels from SED Inc. for its SED television sets. |
| Television launch plan | Was to supply panels from its Hiratsuka pilot line for a planned Japan launch in the fourth quarter of 2007. | Could remain involved in building television sets using purchased SED panels. |
| Continuing contribution | Kazunori Fukuma was to move to Canon as SED Inc.’s president. | Was to continue providing television technologies; Toshiba engineers were to continue under a new contract. |
Did Canon’s takeover settle the patent lawsuit?
No. Canon’s spokesman said, “We believe this decision will settle the dispute” with Nano-Proprietary, describing the rationale for the ownership change. Nano-Proprietary CEO Tom Bijou took the opposite view, saying, “Restructuring of Canon’s ownership position does not resolve the pending litigation which goes to trial in a few weeks,” and also said, “We have terminated Canon’s license as a result of breach of contract.” Nano-Proprietary was described as willing to enter “a new license agreement with Canon on reasonable terms.”
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Those statements show why the ownership change should not be described as a legal resolution: Canon expected it to address the subsidiary issue, while Nano-Proprietary maintained that litigation and its licensing claims remained. The EE Times report does not establish the later outcome of the lawsuit.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What happened to SED televisions after the breakup?
The companies still planned to introduce SED televisions in Japan in the fourth quarter of 2007, using panels from Canon’s Hiratsuka pilot line. Toshiba said it would purchase panels from SED Inc. rather than make them itself. This was a plan reported in January 2007, not confirmation that the launch occurred.
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The split therefore changed who owned and produced the panels, not the announced product plan: Canon became responsible for SED Inc. and its production planning, while Toshiba expected to remain a television technology contributor and panel customer. The cited report gives no quantified production target, sales figure, or confirmed later commercial outcome.
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