U.S. District Judge Denies Canon, Inc.'s Motion for Summary Judgment in Intellectual Property Case: Kelley Drye & Warren LLP Represents Plaintiff Nano-Proprietary, Inc.

For Immediate Release - November 15, 2006

Contact: Laura Templeton
202-342-8415

Washington , DC - "Dead fish don't swim, dead dogs don't hunt, and Canon's dead voting rights don't give it a 'majority of the shares entitled to vote' in SED." With these words, the United States District Court for the Western District of Texas denied Canon, Inc.'s motion for summary judgment in a hotly contested intellectual property case pending in the Austin , Texas federal court.

Kelley Drye & Warren LLP intellectual property litigators Tom Gilbertsen, David Yohannan, and Basil Culyba are representing Nano-Proprietary, Inc. ("NPI"), an Austin-based technology company, against the Japanese copier and camera manufacturer Canon. The suit alleges that a Canon/Toshiba joint venture - SED, Inc. - is not covered by a patent license that NPI granted Canon in 1999. SED is manufacturing a new generation of flat panel display televisions that use NPI's patented technology.

NPI is seeking a declaratory judgment that SED is not a Canon "subsidiary" under the 1999 license, and that Canon has effectively sub-licensed NPI's patents to SED and Toshiba in violation of that license. NPI also alleges that Canon committed fraud by keeping its Toshiba venture a secret while negotiating the license.

"Throughout the case, Canon's principal contention has been that its ownership of one additional share in SED makes the joint venture a Canon subsidiary, and therefore, neither SED nor Toshiba need a license from NPI to make, use, or sell the new flat panel televisions," said Mr. Gilbertsen. In its November 14, 2006, ruling, the court characterized Canon's one-share majority as "a corporate fiction designed for the sole purpose of evading Canon's contractual obligations."

"The ruling on Canon's summary judgment motion is a significant development in this litigation because it effectively puts Canon's subsidiary argument to rest. We are now preparing for trial," Gilbertsen concluded. NPI is also represented in this case by Austin-based Brown McCarroll LLP.

About Kelley Drye & Warren LLP and Nano-Proprietary, Inc.

Nano-Proprietary is represented by Kelley Drye & Warren LLP, a New York-based firm serving domestic and international clients through combined expertise in regulation, litigation, and government relations. Kelley Drye has successfully represented U.S. companies and industries in many unfair trade practice cases, including cases involving Japanese and Chinese televisions and flat panel displays from Japan . NPI is an Austin-based nano-technology firm with extensive R&D development ventures underway with leading electronics firms and the United States government. NPI trades on the OTC BB under the symbol "NNPP."