U.S. Bankruptcy Judge Allan Gropper in Manhattan said the dispute could be resolved through a lawsuit in Kodak’s Chapter 11 bankruptcy case.

“An adversary proceeding will permit the parties to raise issues in an orderly and expeditious fashion and preserve all of their just rights,” Gropper said at a hearing Wednesday.

Kodak is planning to sell patent assets and said in court papers that it needed the order to aid in the sale. Apple has claimed ownership of the patents and is trying to “delay and derail” the sale effort, Kodak said.

Andrew Dietderich, an attorney for Rochester, New York-based Kodak, said after the hearing that the company would file an adversary proceeding against Apple.

The U.S. District Court in Manhattan, not the bankruptcy court, should hear the dispute, according to Apple. Kodak can’t use the urgency of its bankruptcy reorganization to “ramrod through a procedurally flawed and substantively meritless motion,” Apple said in court papers.

Move Sought

David Seligman, an Apple attorney, told Gropper the company wants the matter resolved.

“Kodak seeks to have this rush to judgment occur in the bankruptcy court, which is neither legally permitted nor practically equipped to address the numerous complex points of federal patent law and related issues implicated by the parties’ disputes,” Cupertino, California-based Apple said in court papers.

In his ruling, Gropper said Kodak might be able to sell the disputed assets and put the proceeds in escrow until a court rules on whether the money should go to Apple or Kodak. Kodak also can sell assets subject to any ownership interests of Apple, the judge said.

The bankruptcy case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District New York (Manhattan). The district court case is In re Eastman Kodak Co., 12-04444, U.S. District Court, Southern District of New York (Manhattan).