Canon to take over whole SED joint venture

According to a press release, the decision was reached following discussions between Canon and Toshiba based on the assumption of prolonged litigation pending against Canon in the United States with respect to SED-technology. A report published in JPEA News indicates that Canon signed a licensing agreement with the U.S.-based Nano-Proprietary Inc. on a patent related to the SED panel technology. But Nano-Proprietary refused to regard the joint venture as a Canon subsidiary due to Toshiba ‘s influence as a major shareholder. Legal steps by Canon to recognize the venture as a subsidiary were turned down by a U.S. District Court in November 2006. Canon and Toshiba planned to start manufacturing SED panels by tentatively using an R&D line in Canon’s factory in Kanagawa for launching SED TV sets within 2007, then to build SEC’s mass-production factility in Hyogo, Japan, a US 1.7 billion investment on the premises of an existing Toshiba plant.

As a result of discussions between Canon and Toshiba on the patent problem, it was now decided that Canon will carry out the SED panel business independently in order to facilitate the earliest possible launch of a commercial SED television business.

According to a press release, SED television sets are to be introduced in Japan in the fourth quarter of this year as originally scheduled, although Canon will reassess its future mass-production plans for SED panels.

While the decision announced today represents a major change in the relationship between Canon and Toshiba, each company is expected to make every effort for the smooth launch of its television business based on the high image quality achieved by SED technology.

Kazunori Fukuma, the current president of SED Inc., appointed from Toshiba, will resign from Toshiba, after which he will be hired by Canon and continue to serve as SED Inc. president. Also, plans call for Toshiba engineers on loan to SED Inc., in accordance with the terms of a new agreement to be entered into between SED Inc. and Toshiba, to continue their assignments for the transition period during which Canon will independently establish the SED panel business.