Applied Nanotech Holdings, Inc. = Nano-Proprietary announced that the U.S. Court of Appeals for the Fifth Circuit issued its opinion in its litigation with Canon, Inc. The appeals court in part affirmed, and in part reversed, the rulings of the district court. While the appeals court accepted, without deciding, the district court's decision that SED, Inc. as originally formed did not qualify as a Canon subsidiary, and that Canon had materially breached the contract, it found that termination of the license agreement was not an appropriate remedy.

The appeals court also ruled that the restructured SED, Inc., which is 100% owned by Canon, now qualifies as a Canon subsidiary. The appeals court denied Applied Nanotech's appeal that the district court had improperly excluded certain evidence from the trial. The decision reinstates Canon's non-exclusive license to substantially all of Applied Nanotech's field emission patents, excluding certain display applications. The entire ruling can be found at the court's website at www.ca5.uscourts.gov.