Bloomberg News

Apple Asks for Approval to Sue Bankrupt Kodak Over Patents

February 16, 2012

(Updates with Kodak complaint in seventh paragraph.)

Feb. 15 (Bloomberg) -- Apple Inc. asked a bankruptcy judge for permission to sue Eastman Kodak Co. over allegations it’s infringing patents that Apple says cover technologies used in printers, digital cameras and digital picture frames.

Apple said in a filing yesterday in U.S. Bankruptcy Court in New York that it intends to file a complaint against Kodak at the International Trade Commission and a corresponding suit in U.S. District Court in Manhattan based on patent-infringement claims. The suit will seek an order blocking Kodak’s infringement, according to the filing.

While arguing bankruptcy law doesn’t prevent the filing of infringement suits against a company in court protection, “Apple requests express authority from this court before it initiates the actions out of an abundance of caution,” the company’s lawyers wrote in the filing.

Kodak will have the right to ask the court to halt the district court case until the ITC makes its ruling, though a court order on that request “is not required before Apple commences” its lawsuits, Apple said in the filing.

Apple previously claimed it is the true owner of the image- preview patent that is the subject of infringement claims lodged against Apple and Research in Motion Ltd. The Cupertino, California-based company contends that it developed a digital camera in the early 1990s that it shared with Kodak, and that Kodak then sought the patent on the technology. Kodak has denied the allegations.

ITC Rejection

The U.S. International Trade Commission rejected the ownership arguments in a case that’s still pending at the Washington agency. Those arguments are also an issue in the lawsuit now on hold in federal court in Rochester, New York. In yesterday’s filing, Apple asked to move that case to Manhattan.

Apple has objected to a patent-infringement complaint that Kodak filed last month at the ITC against Apple and HTC Corp. In a Feb. 7 filing with the agency, Apple argued that the ITC shouldn’t investigate the complaint because of the bankruptcy filing and the company’s plan to sell its patents and digital camera business.

“It is against the public interest for the commission to expend its resources initiating and prosecuting an investigation when it is known, based on Kodak’s own admissions, that Kodak will be selling the asserted patents and divesting itself of the parts of its business” that are part of the ITC case.

Licenses Sought

Kodak, in a Feb. 10 response, said the bankruptcy doesn’t alter the fact that the company has invested in digital imaging technology and continues to seek licenses for its inventions. The commission is scheduled to decide by Feb. 23 whether it will institute the investigation.

“Apple should not be using the bankruptcy to seek to disrupt Kodak’s enforcement of its patents given that infringers like Apple, who continue to violate Kodak’s intellectual property rights and refuse to properly compensate it, have contributed to Kodak’s current circumstances,” Kodak wrote.

Kodak, the photography pioneer that introduced its $1 Brownie Camera more than a century ago, filed for bankruptcy Jan. 19 after consumers embraced digital cameras, a technology Kodak invented and failed to commercialize.

The company, based in Rochester, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents.

Andrew Dietderich, a lawyer for Kodak, didn’t immediately return a call yesterday after regular business hours seeking comment on Apple’s filing.

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

--With assistance from Sue Decker in Washington, Dawn McCarty in Wilmington and David McLaughlin in New York. Editors: Michael Hytha, John Pickering

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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