Nanosys, QD Vision Patent Fight Could Shake Up Nanotech Sector

As consumer device makers keep upping the ante with high-definition displays, a patent lawsuit between two well-funded, competing developers of “quantum dot” display technology could have ramifications for an emerging business sector.

Milpitas, CA-based nanotechnology company Nanosys is suing Lexington, MA-based QD Vision for allegedly infringing upon 13 patents that Nanosys says it exclusively licensed from MIT and the University of California system, which are both also listed as plaintiffs in the lawsuit filed last week. (See the full complaint below.)

QD Vision issued a press release Friday calling the Nanosys lawsuit “meritless” and an attempt to slow down its “legitimate progress.” As of this writing, QD Vision hasn’t filed an official response in court.

Nanosys and QD Vision produce quantum dots—tiny semiconductor crystals that, among other things, can help deliver high-definition images on device screens, including TVs and tablets. The two companies have been around for over a decade, and each has raised more than $100 million from investors.

The stakes may not be as high as for other patent suits in recent years, like the duel between Apple and Samsung. Quantum dots are still trying to go mainstream. The industry generated just $75 million in revenue in 2013, according to Touch Display Research statistics reported by the publication Semiconductor Engineering. But Touch Display Research projects the quantum dots market will exceed $2 billion by next year and could hit $10.8 billion by 2026.

This patent case could play a part in shaping the competitive landscape for nanotech. Nanosys has asked the court for an injunction to stop QD Vision’s alleged patent infringement; to order destruction of its existing product inventory; and to have QD Vision fork over payments for “lost profits,” a “reasonable royalty,” other damages, and recovery of Nanosys’s attorney fees.

Nanosys was founded in 2001 and took several years to figure out what commercial applications it wanted to pursue for its technology, Xconomy previously reported. The company brought in current CEO Jason Hartlove in 2008 and has largely focused on selling quantum dots for use in consumer device displays. Nanosys says the technology offers more vivid color, brightness, and power efficiency at a lower cost than other display technologies, such as organic light-emitting diodes (OLEDs).

According to the lawsuit filed by Nanosys, 12-year-old QD Vision initially focused on developing quantum dots that use “electroluminescence” properties, whereby electricity sent through the nanocrystals produces light. That’s different from the “photoluminescence” technique used by Nanosys, in which light is used to excite the semiconductor materials. But Nanosys alleges that when QD Vision hit a wall with its initial approach around 2008, the company switched to developing quantum dots that use the same method as Nanosys—and violate its patents.

“When QD Vision’s own technology failed, the company chose infringing on Nanosys’s patents over taking the time to innovate,” Hartlove said in a press release.

Furthermore, Hartlove claims QD Vision’s products “are creating the perception that quantum dots are a cheap and inferior quality technology.”

“If consumers come to associate this level of performance with quantum dots, then the reputation of the technology in the marketplace will be permanently tarnished,” Hartlove said.

Nanosys says it holds more than 293 patents issued and pending worldwide, including 99 in the U.S. Meanwhile, QD Vision says it owns more than 180 patents and patent applications, and is licensed to use more than 100 patents and patent applications from MIT.

“It’s apparent from multiple misstatements that our competitor is feeling threatened by our success in the market and using this improper lawsuit to try to slow our legitimate progress,” QD Vision CEO Mustafa Ozgen said in his company’s press release. “We at QD Vision are very proud of our rapidly growing portfolio of IP, products, and customers. We intend to defend ourselves and our technology vigorously.”

Here’s a copy of Nanosys’s complaint:

Nanosys Patent Infringement Lawsuit Against QD Vision

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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