Eastman Kodak Co. lost a ruling in a two-year legal fight against Apple Inc. and Research In Motion Ltd. over a patent for digital image-preview technology, a decision that may hurt the value of assets Kodak is selling.
RIM and Apple didn’t violate Kodak’s rights because the patent is invalid, U.S. International Trade Commission Judge Thomas Pender said in a notice posted on the agency’s website. The judge’s findings are subject to review by the six-member commission in Washington, which has the power to block imports of products that infringe U.S. patents.
Kodak sought Chapter 11 protection in January after years of burning through cash as digital technology hurt its film business. Chief Executive Officer Antonio Perez, who took the helm in 2005, is selling photography and patent assets as part of a plan to shrink the 131-year-old imaging company into a digital-printing specialist that sells faster, more flexible commercial and consumer printers to profit from ink sales.
The company’s two digital patent portfolios may be its most valuable assets. The patent in today’s ruling is part of a portfolio of more than 1,100 related to digital capture that the Rochester, New York-based Kodak is selling. The other collection covers imaging systems and services.
Together, the technology is valued at $2.21 billion to $2.57 billion, based on an estimate by 284 Partners LLC, a patent advisory firm cited in a debtor’s motion it filed before a U.S. bankruptcy court in January.
Kodak has been trying to charge for the use of its digital- imaging patents, and suing in instances where that strategy failed. It had said a victory may force RIM and Apple to settle and pay for licensing.
Kodak contends that Apple already owes it more than $1 billion in damages for infringement of digital capture patents, according to a bankruptcy court filing this month.
The disputed patent, which Kodak claims is used in all modern cameras, covers a feature that previews low-resolution versions of a moving image while recording still images at a high resolution. Higher resolution requires more processing power and storage space. Samsung Electronics Co. and LG Electronics Inc. have already paid $964 million in settlements to Kodak for using the technology.
Pender said that the patent was an obvious variation of earlier inventions. He did say that, were it valid, BlackBerry devices and the Apple iPhone 3G would infringe it, while the iPhone 3GS and iPhone 4 do not.
The commission is scheduled to complete the investigation by Sept. 21. The case targets Apple’s iPhone and BlackBerry devices including the Tour, Storm, Bold, Curve and Pearl. Kodak had lost its fight before another ITC judge, only to have the commission revive the case last year.
Apple sold 152.1 million iPhones and iPads in fiscal 2010 and 2011, data compiled by Bloomberg shows. RIM shipped 102.6 million BlackBerrys and PlayBook tablets in its last two fiscal years.
HTC Corp. and Cupertino, California-based Apple were named in a second ITC case brought by Kodak that accuses the two device makers of infringing four patents related to image transmission. HTC also is accused of violating the image-preview patent that’s in the case against Apple and RIM. That trial is scheduled to begin in February.
Other Case Pending
Apple has another case pending against Samsung over its Galaxy tablet computer, which wasn’t covered by the earlier agreement. It also has patent-infringement claims pending against Fujifilm Holdings Corp., and a breach of contract case against Ricoh Company Ltd. over a patent license.
Apple has claimed in civil suits that it holds rights to the Kodak patents because of a past work agreement, an issue the ITC rejected. The iPhone maker lost the patent-infringement case it filed at the ITC against Kodak and was barred by a bankruptcy judge in March from filing a second one.
The patent case is In the Matter of Certain Mobile Telephones and Wireless Communication Devices Featuring Digital Cameras, and Components Thereof, 337-703, U.S. International Trade Commission (Washington).
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