Toshiba America Electronic Components Inc. distributed a memo to notify of the cancellation of a planned exhibition of its 55-inch SED prototype at next month's CES in Las Vegas. Canon Inc., Toshiba's partner in the development of SED, has no plans to exhibit SED panels at CES either, according to a company spokesman.

Canon and Toshiba Corp. have been promoting SED as a potential next-generation display technology, including demonstrations at past shows such as CES and Ceatec Japan. SED is said to offer the potential for a better picture than LCD or plasma displays.

Toshiba America's memo provided vague details about the reason for exhibition cancellation, saying it was not related to technical nor business issues.

Speculation is that Toshiba cancelled the exhibition due to the unsuccessful settlement of a dispute with Nano-Proprietary Inc., which owns field-emission display (FED)-related patents. SED display makes use of field emission phenomena.

Nano-Proprietary (Austin, Texas), filed an April 2005 suit against Canon in U.S. District Court for the Western District of Texas, claiming that the licensing agreement between the two companies does not allow Canon to transfer the licensed technology to SED Inc., the joint venture company founded by Canon and Toshiba to manufacture SED panels.

Nano-Proprietary licensed its FED-related technology to Canon in 1999. The licensing agreement granted Canon's subsidiaries authority to use the technology. But Nano-Proprietary claimed that the SED joint venture does not fall into the category of a Canon subsidiary.

Canon claimed that SED Inc. was its subsidiary because it owned one more share of common stock in the joint venture than Toshiba. But Nano-Proprietary argued that Canon and Toshiba agreed to run the joint venture on a consensus basis, which excludes it from being defined as a subsidiary of Canon.

As a countermeasure to Nano-Proprietary's suit, Canon made a motion seeking a judgment of no existence of a legal material fact. But U.S. District Judge Sam Sparks in November 2005 denied Canon's motion.

Spokesmen from both Canon and Toshiba spokesmen declined to comment on the case as the issue is pending in court, but said that their plan to release SED TVs in the forth quarter of next year has not been changed.