Speedbump for SED HDTV

Last week, electronics giant Canon lost a big court decision to a little Texas company, Nano Proprietary. Nano Proprietary holds patents on some of the technology necessary to develop the new surface emitter displays: SEDs. According to a Reuters report, Canon paid Nano a one-time $5.6 million licensing fee for the use of those patents. Then Canon teamed up with Toshiba to develop SED technology jointly, and created some beautiful displays that attracted drooling mobs at trade shows including CES.

Nano complained that the license agreement was only with Canon, and that Canon did not have the right to share the technology with Toshiba. Last week, the court ruled in Nano’s favor, which means the termination of the existing license agreement. If Canon wants to continue to develop SED, it must negotiate a new deal with Nano for the use of those patents.

While the demonstrators looked awesome — an image like a CRT with the crisp detail and thin panel of an LCD — the technology has been a long shot from the start. The question has been whether or not it can be manufactured at a price that can compete with the plummeting LCD prices. Recently, a Canon representative said that while there were plans to go into production, the product would be positioned as a high-end premium product intended largely for professional applications such as television studios.

The loss of the court case is certainly not the death knell for SED. Nano Proprietary cannot want to kill the project; the company just wants more money from the deal. The problem is that any new deal will increase the costs, and that will make worse an economic situation that already is in trouble.

The bottom line is that I expect work on SEDs to continue, but that it is now even less likely than ever that the displays will ever come to market. And if they do go into production, I expect that they will be too costly to compete, and will be limited to niche applications.