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UniPixel (NASDAQ:UNXL) and CIT (Conductive Inkjet Technologies) a subsidiary of Carclo PLC (OTC:CCEGF) have entered into a legal dispute. CIT has filed proceedings against UniPixel in the U.K. high court for "breach of contract, breach of confidence, and patent entitlement." In the short term CIT is seeking an injunction to halt UniPixel's sales in the U.K. plus damages. The claim states

UniPixel has made unauthorized use of confidential CIT know-how, relating to the formulation and use of catalytic inks and metallization technology in touch screen applications, in the development of its own metal mesh process and products (which it calls UniBoss) and related patents it has filed (or been issued) on these processes.

CIT and UniPixel worked together in 1996 as part of a common project of a third party developer and CIT believes that UniPixel has used CIT's know how to develop the UniBoss touch sensor.

UniPixel responded "These claims are based on unfounded speculation and inaccurate assumptions, and are completely without merit," and

UniPixel's extensive and dedicated research and development efforts are not dependent on appropriating the knowledge of our competitors. To make such a claim is simply false, and we look forward to defending our company in court if necessary.

UniPixel has hired international renowned law firm Fish & Richardson for its representation.

I do not claim to understand the validity or the outcome of these claims. In this article I want to clarify the differences between CIT's and UniPixel's touch sensor technologies and give a quick overview of UniPixel.

Touch Sensors Overview

A touch sensor is the touch sensing element used on millions of touch enabled smart phones and computer tablets. The touch sensor market is a $4 billion industry that is expected to increase to $7.7 billion by 2016. Currently with the release of Windows 8, touch sensors manufacturers are struggling trying to keep up with the demand. That's why it is important to find a new manufacturing process to fabricate a new generation of touch sensors that are more economical and provide better performance. Recently I featured emerging touch sensor technologies in my article Touch Sensors: The Next Generation.

Metal Mesh Touch Sensors

One of the most promising emerging touch sensor technologies are metal mesh touch sensors. A metal mesh touch sensor is basically a printed circuit on film; the only difference in this case is that the printed circuit lines are so small that they become virtually invisible. To achieve this invisibility the touch sensor circuit lines must be printed in sizes smaller than 5 microns. To give you a comparative example a human hair is 40 to 120 microns wide. Both UniPixel and CIT are the first companies to have achieved printed circuit lines under 5 microns in size on transparent film. UniPixel manufactures the UniBoss touch sensor and CIT manufactures the Xsense touch sensor.

Metal mesh touch sensors are superior to ITO touch sensors because metal mesh has less electrical resistance than ITO; this improves latency and battery life.

Manufacturing Process

The manufacturing process to fabricate metal mesh touch sensors consists of drawing the touch sensing circuit with a special catalytic ink on transparent film. The touch sensing circuit is drawn with lines and structures under 5 microns in size. The film is then submerged into a plating bath where the metal grows on the catalytic ink by autocatalytic deposition forming the printed metal circuit. The end result is a printed circuit on film that is virtually invisible.

Basically, both UniPixel and CIT use the same manufacturing process; the only difference is how they apply the catalytic ink.

CIT's Process

CIT uses a special multilayered photoimageable catalytic film that works like carbon paper. The outer layers of the multilayered film are pre-coated on the inner side with catalytic ink. When the film is exposed to UV photolithography the catalytic ink is transferred from the outer layers of the film to the inner layer drawing the printed circuit on the inner film. Then the outer layers of the multilayered film are removed leaving the inner layer film with the circuit drawing ready for the plating bath.

UniPixel's Process

UniPixel uses embossing; basically, they press the circuit pattern on the film. Then the catalytic ink is applied to the raised areas of the embossed film forming the catalytic circuit drawing.

Comparison

Both UniPixel and CIT can print on both sides of the film. This is important because a double sided touch sensor saves space. A traditional touch sensor stack requires two layers of touch sensors to determine the X and Y coordinates of the touch. With a double sided touch sensor you can do this by only using one touch sensor layer.

Performance wise both XSense and UniBoss should provide equal performance but no side by side comparison has been made yet.

XSense will be featured this week at the 2013 CES where it won the CES Innovation Award in the embedded technologies category. After the award ceremony Atmel (NASDAQ:ATML), the sole distributor of XSense, announced that Asus will be releasing a tablet incorporating Xsense in the first quarter of this year.

Pricing

Atmel has not released XSense's pricing yet but UniPixel has announced that their touch sensor UniBoss will cost around 22 cents a square inch compared to 36 cents a square inch for current ITO touch sensors. This translates into a 39% cost savings over ITO.

UniPixel uses a simpler manufacturing process that is more cost effective. UniPixel can emboss and apply the catalytic ink in a single step whereas CIT requires the fabrication photoimageable catalytic film and expensive photolithography.

UniPixel in Focus

UniPixel is a manufacturer of performance-engineered films; basically they are able to modify the surface of performance films with micro structures in order to give the film new attributes like finger print resistance, ice and dirt resistance, and improved optical performance. For example, UniPixel can modify the surface of optical films to evenly distribute lighting from LEDs. This expertise with films is what enabled UniPixel to create UniBoss.

UniPixel is not a profitable company yet, last quarter they had a quarterly loss of $2 million and a 9 month loss of $6.1 million; compared to September 2011 where UniPixel had a quarterly loss of $1.9 million and a 9 month loss of $6.7 million. But UniPixel's cash in hand went up to $15.4 million from $7.2 million because of the sale of $12.1 million of common stock.

On December 7, 2012, UniPixel announced that they have entered a multimillion dollar license agreement with an unknown PC manufacturer that provides for "priority development, dedicated production capacity and preferred pricing." Since the license agreement UniPixel stock value has almost doubled in price.

So UniPixel is currently at a turning point, they are getting ready to enter into preproduction of what can be one of the hottest products of the touch sensor market, a $4 billion dollar industry. If UniPixel can achieve production qualifications and mass produce UniBoss, UniPixel's profit potential could be limitless. If they can't UniPixel's could be facing bankruptcy. Luckily, UniPixel's management is very confident of their technology and their ability to go into production. I see UniPixel as the most promising investment in the street but also at the same time the riskier one. It will all depend on UniPixel's ability to deliver or not.

Source: Touch Sensor Wars: Uni-Pixel Vs. CIT