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Remember What's its Name? SED?

For those who haven't been following the world of displays for the past year, you may have forgotten all about the SED, or Surface-conduction Electron-emitting Display.

For those who haven't been following the world of displays for the past year, you may have forgotten all about the SED, or Surface-conduction Electron-emitting Display. This was going to be the end-all of flat-panel display technology–a super-thin, low-power emissive display with high resolution, accurate grayscale response, wide dynamic range, deep blacks, dead-on colors, and white teeth. (OK, I made that last one up.)

Pete Putman, CTS

Pete Putman, CTS

The SED had been in development by Canon for nearly 20 years when it made its debut in 2005. At the Consumer Electronics Show, Canon's then-partner Toshiba held an invitation-only demo in a private room where a 36-inch 720p SED TV sat between a 40-inch no-name LCD and a 42-inch no-name plasma. The SED showed inky blacks, plenty of contrast, and accurate, saturated colors, particularly flesh tones. What made the demo even more interesting was a power consumption meter that Toshiba connected to all three TVs. While the plasma was burning in excess of 200 watts and the LCD set was using over 200, the SED was chugging along at a miserly 80 watts.

Wow, an HDTV that looked great yet used little power. To further tantalize the audience, Toshiba said it had a 50-inch model in development with full 1920x1080 resolution.

Many of us left the room thinking we'd glimpsed the next decade of display technology. Sure, more than a few companies were working on super-thin organic light-emitting diode (OLED) displays, but nothing this large. And yes, a couple companies had tried to get similar field emission devices (FEDs) into production, but simply burned through venture capital. How did Canon pull it off? As it turned out, Canon didn't set up the demo alone. Not only did it have help from long-time TV manufacturer and partner Toshiba, Canon also used a patent portfolio from an intellectual property "supermarket" in Texas–a company called Nano-Proprietary, which held and licensed FED technology IP.

The $5 Million Ingredients

Canon and Nano-Proprietary had signed a non-exclusive patent licensing agreement in March 1999 that gave the former access to Nano-Proprietary's FED designs and patents. The cost? A cool $5,555,555.55 (don't ask how they arrived at that figure). The only restriction was that only Canon or a wholly-owned subsidiary could use the portfolio.

Here's where things got sticky. As you know, Canon isn't exactly a top TV brand. So to hedge its bets, the company partnered with Toshiba in the aforementioned joint venture. The new company was given the name SED Inc. and launched September 2004 after five years of R&D. But because SED Inc. was a joint venture, it represented a big no-no to Nano-Proprietary.

From court papers: On April 11, 2005, Nano filed suit against Canon and Canon USA asserting "(1) Canon materially breached the PLA by sublicensing its patents to SED/Toshiba; and (2) Canon tortiously interfered with Nano's prospective business relations" (specifically, its prospective license with SED/Toshiba). In addition, Nano-Proprietary sought a declaratory judgment that SED Inc. did not qualify as a subsidiary under the PLA. An amended suit was brought in April 2006 that added charges of fraud and asked the court to rescind the patent license agreement.

While lawyers were busy, Canon and Toshiba continued to present papers on SED technology and showed a new 55-inch 1080p model at CES 2006. SED Inc. was even talking about Q4 2006 product delivery, just in time for the holiday season.

Except it didn't happen. December came and went with no sign of an SED HDTV. Meanwhile, LCD and plasma manufacturers were engaged in an all-out price war.

In 2007, Canon came up with a clever idea: Buy all of Toshiba's shares in SED Inc. and turn the joint venture into a subsidiary. It did so almost two months after Nano-Proprietary notified Canon it was terminating their agreement. Both sides filed for summary judgments on whether SED Inc. was still a joint venture or a subsidiary, and whether Canon was subject to financial penalties.

The courts decided:

(1) SED Inc. in its original form was not a Canon subsidiary;
(2) Canon had materially breached the PLA because creating SED Inc. "was effectively an attempt to sublicense its rights to the Nano patents;"
(3) Nano-Proprietary was damaged by this breach (although the district court did not assign a value to this damage);
(4) Nano-Proprietary's termination of the PLA was effective; and
(5) Canon's restructuring of SED Inc. was ineffective to prevent termination because it "was not undertaken within a reasonable time."

So Where's the TV?

Enough legal stuff. What about that cool TV we were promised? Not to worry, said Canon, a 55-inch HDTV would be in production by Q4 2007.

The court case came to a head in May 2007 when a jury awarded Nano-Proprietary the $5.5 million dollars it had already received from Canon and nothing more. Canon promptly said it would appeal the court's decision that it had breached the original agreement.

As 2007 wore on, Canon began pushing back its delivery date for a best-in-class HDTV. Q4 2007 wasn't looking so good anymore, and talk began circulating of a new target date–August 2008, in time for the Beijing Olympics. Apparently Canon hadn't learned the lessons of the 2006 World Cup, when TV manufacturers overproduced LCDs amid high sales expectations, only to realize that (at least in Europe) soccer enthusiasts liked to gather at their local watering holes to cheer on their teams, not sit at home in front of a new 52-inch LCD TV.

Long story short, no SED HDTVs materialized in time for the Olympics. The only news of note was a decision by the U.S. Fifth Circuit Court of Appeals in July 2008 that reversed the lower court's decisions, ruling against what is now called Applied Nanotech Holdings and allowing Canon to proceed with SED research, design, and fabrication using the original patent license agreement.

As of this writing, there's been no word on what steps (if any) Applied Nanotech Holdings will take next. Canon announced this year that it has repatented some discoveries in FED design that it will use in future efforts. And we're still no closer to a production-model SED than we were three years ago.

Rumors on the Web hint at a SED cameo at the 2009 Consumer Electronics Show. But amidst $1,000 42-inch 1080p plasmas and $1,500 52-inch LCD HDTVs, it would likely be a case of too little, too late. Then again, many people still believe Elvis never left us either.

InfoComm Educator of the Year Pete Putman is a Pro AV contributing editor and president of ROAM Consulting in Doylestown, Pa.



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