Posted by the venerable Ken Penders on his messageboard, which it would seem quite a few people missed:

I was approached by one of the producers who had been involved with a Dreamworks animated project about the possibility of an animated Knuckles film based on the comics series. Some initial discussions took place, but because there were was some question as to the availability of the rights, the project went nowhere.

Currently, Sega's contention is that if such a project were to be done, they would want both Sonic and Knuckles involved. This, in fact, is the approach they're taking with the latest animated series currently in production, as well as another animated project currently in development with my involvement.

The only thing I can say at this point is that if the second project does come to pass, besides Sonic, Knuckles, Tails and Doctor Robotnik - which is a given - there's a better than even chance that Sally, Bunnie, Antoine, Rotor, Julie-Su, Lara-Le, Locke, Snively, Crabmeat, Jules, Bernie, Rouge and Shadow will also be featured. And if they can't play a main part in the story, it's also possible Vector, Mighty, Espio, Geoffrey and Hershey will be featured in quick cameo appearances.

I'll release more details when the time is right. Stay tuned.

Those of us who follow SegaSonic know the first production to be the recently announced new Sonic anime project Sega let out of the bag a while back.

There's no guarantee anything will come of it, but it's nice to envision, yes?

Source: Ken's Comic Book Stories & Art