CDT Sued For Breach Of Contract
“Luxell has complied with all requirements under the license agreement and we were encouraged by our initial progress with the incorporation of the Black Layer into LEPs,” says Luxell's president/CEO, Brian Kennedy. “We are now preparing to work directly with other LEP manufacturers.”
However, Luxell admits to “schedule setbacks” for its contrast enhancement technology.
“These issues, coupled with the delays relating to complex challenges in manufacturing small molecule organic light emitting diode (SMOLED) and light emitting polymer (LEP) OLED displays, are having an overall impact on Luxell's Black Layer licensing programme,” says a press release dated September 12, 2002.
The same release reports implementation problems at Tohoku Pioneer. The Japanese company has “unforeseen compatibility issues” with using the first generation of Black Layer in its SMOLED formulation. Tohoku Pioneer and Luxell are researching a second generation Black Layer for use in SMOLED production. Results from this work are expected in the next six months.
At CDT, “there have been difficulties and delays in implementing Black Layer in CDT's current LEP product plan.” Luxell says it is confident that “the issues are resolvable”. However, CDT did not make its $1mn license instalment due on August 31, 2002.
Luxell's chief financial officer, Roman Kocur, claims: “In essence, CDT tried to materially change the business terms of the original license agreement. We believe the terms of the agreement are clear, and we see no commercial or technical basis to make changes.”
CDT says that Luxell claimed Black Layer was compatible with CDT's technology and was ready to be licensed to CDT's display manufacturing licensees for commercial production development. CDT made an initial payment of $1mn under the terms of the license.
CDT says it has experienced difficulties similar to Tohoku Pioneer's, including an inability to establish the manufacturability of LEP displays with Black Layer for mass production. Considerable technical resources have been applied to try to replicate the application of Black Layer technology to the manufacture of LEP displays without success, says CDT.
The LEP company has offered to enter into joint development to attempt to resolve the identified shortcomings and to suspend the contract pending resolution. CDT's CEO David Fyfe reports that this offer was refused. Luxell terminated the licence on October 10, 2002, and intends to pursue the matter in court.
