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Kodak's patent infringement case against phonemakers RIM and Apple was dealt a major setback as the invalidation of one of its key patents was upheld.  (Source: Reuters)

Apple and Microsoft were among a consortium to add 6,000+ Nortel patents to their arsenal, winning the bid for the communication giant's IP portfolio.  (Source: Novosti Group)
Court does allow some Kodak claims to continue, though licensing will likely be greatly reduced

American Camera giant Eastman Kodak Comp. (EK) saw the writing on the wall decades ago, when digital imaging was first being talked about.  Long a visionary in the field of photography, Kodak invented the first true digital camera in 1975 and moved aggressively to bring the technology to market.  Even as it has continued to innovate, though, in recent years Kodak has fallen on hard times as more lithe Asian competitors have outsold it in the digital camera market.  With the advent of smartphones and shrinking digital camera sales, Kodak is in danger of sinking into obscurity.

I. Kodak's Search for Cash

In an attempt to stay relevant, the pioneer has increasingly turned to licensing its intellectual property -- and litigating against those unwilling to play ball.  In February 2010, it filed suit against Canada's Research in Motion (TSE:RIM) and Cupertino, California's Apple, Inc. (AAPL), alleging they stole its IP involving image previews on a digital screen.

The case was estimated to be worth $1B USD, plus could allow South Korea's Samsung Electronics (SEO 005930) and LG Electronics (SEO:066570) to back out of $1B+ USD in licensing fees if Kodak loses.

In January, a judge ruled that Kodak's patent that the case hinged upon was invalid for reason of obviousness.  The blow was softened in March when a larger judicial panel voted to review the decision.  

II. Awaited Ruling Goes Against Camera Giant

The larger panel at the U.S. International Trade Commission ruled this week that while there were some examples of infringement that were upheld in Kodak's claims, that its most important patent was indeed invalid as per the January ruling. 

While Kodak is permitted to continue its lawsuit(s) with regards to the upheld claims (image previews without a flash), the decision is viewed as a major loss for the company, as it almost certainly eliminates the billion-dollar payday that company executives were anticipating.

Kodak representatives tried to look on the bright side.   Laura Quatela, Kodak's chief intellectual property officer commented, "[We were] gratified that the commission has decided to modify in our favor the judge's initial recommendation. As we have said from the start, we remain extremely confident this case will ultimately conclude in Kodak's favor."

The loss plunged Kodak stock by as much as 16 percent during trading (the stock is current down over 14 percent).  

Kodak still has a bit of hope to staying relevant.  The multi-billion dollar company has four growing sectors -- consumer inkjet printers, high-speed commercial inkjet presses, workflow software and packaging -- which it says could double in revenue by next year, accounting for $2B USD, or roughly 25 percent of the company's earnings.  In that regard it hopes to reinvent itself similar to computer pioneer International Business Machines Corp. (IBM).

III. Microsoft, Apple, and Other Pick Up Key Portfolio

In related news Apple, Research in Motion, Sony Corp. (TYO:6758), Microsoft Corp. (MSFT), EMC Corp. (EMC), and Swedish telecommunications giant Ericsson (ERIC) have joined forces to acquire Nortel Networks Corp. treasure trove of intellectual property for a cool $4.5B USD.

The portfolio contains over 6,000 patents, in fields including wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors, internet search, social networking, and more.

The collection should prove a powerful mutual defensive (or offensive, perhaps) tool for the buyers.  For the seller it's a huge payday, which sent share prices of the company's pink sheet penny stock (OTC:NRTLQ) soaring 68 percent.  The Canadian company has been trying to offload its assets and restructure since it filed for bankruptcy in 2009.



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RE: Poor Kodak....
By Solandri on 7/1/2011 8:33:48 PM , Rating: 4
They did pursue DSLRs. Some of their first commercial digital cameras were modified Canon and Nikon bodies with a digital sensor and hard drive strapped on. At the time, they cost $10k-$30k, so only the press agencies could afford them. So Kodak, perhaps rightly, concluded that rather than develop their own SLRs and obsolete the lens collections of the press, they should just piggyback their technology onto existing SLR bodies.
http://en.wikipedia.org/wiki/Kodak_DCS

Kodak's problem has been that while they were great at making film and imagers, they sucked at making cameras. I think their most successful cameras were the disposable ones (prepackaged with a roll of film, which you sent back for developing). Unfortunately there's not much market for a disposable digital camera.

In contrast, Fuji actually had a couple decent point and shoot film bodies before everything went digital. Consequently, you see they're still a competitor in the digital camera market. Kodak still markets digital cameras, but they (and Fuji for that matter) are nowhere near as dominant in the industry as they used to be.

The company that's fallen furthest though is Polaroid. Their one trick pony was instant developing film, which is made almost completely obsolete by digital. They went bankrupt in 2001. Their current incarnation bought their name and IP, and is marketing some products based on it. Their instant film had some niche applications in science and fine arts, so it's good that the film is still around.


RE: Poor Kodak....
By wordsworm on 7/2/11, Rating: -1
RE: Poor Kodak....
By AssBall on 7/2/11, Rating: 0
RE: Poor Kodak....
By wordsworm on 7/3/11, Rating: -1
RE: Poor Kodak....
By SunTzu on 7/3/2011 8:42:06 AM , Rating: 2
...what? Are you drunk or high, or just stupid?


RE: Poor Kodak....
By wordsworm on 7/3/11, Rating: 0
RE: Poor Kodak....
By zmatt on 7/3/2011 2:22:38 PM , Rating: 2
If you are an American you do know what it is as they are very common here. It's made by chevy. I'm not going to fault you for not being a car person because not everyone has to be in to it, but I will fault you for being woefully ignorant of something you likely see everyday as you drive to work.


RE: Poor Kodak....
By AssBall on 7/3/2011 11:49:20 PM , Rating: 2
quote:
When cars don't cause pollution and can drive themselves I might be more interested in your car-talk.


Because the silver nitrate and selenium in your old camera and cadmium and lithium and arsenic in your cameras are so very environmentally friendly.

I don't care if you want to be ignorant but try not to be a hypocrite.


RE: Poor Kodak....
By wordsworm on 7/4/2011 5:51:16 AM , Rating: 2
You're going to compare the environmental impact of a camera to a car? Really? Did you know that it's easier to recycle a camera than it is a car? Did you know that a camera doesn't require CO2 generating fossil fuel in order to operate? You're comparing a snowflake to an avalanche. You're a Republican/conservative, aren't you?


RE: Poor Kodak....
By AssBall on 7/4/2011 10:45:44 AM , Rating: 2
I am not a republican, and I don't see what that has to do with you being ignorant of the pollution caused by technology.

What is your problem with carbon dioxide? Did someone tell you it steals babies from their cribs and plunders the peaceful?

Typical of political activists like you to automatically assume I have any kind of political agenda.


RE: Poor Kodak....
By Alexvrb on 7/4/2011 3:08:22 PM , Rating: 2
If only all staunch opponents of CO2 generation would start with themselves...


RE: Poor Kodak....
By wordsworm on 7/4/2011 10:47:51 PM , Rating: 2
My problem with an overabundance of CO2 is the same as any sane person's. The oceans are acidifying as a result, causing massive dead zones which are growing at an alarming rate. But I don't need to tell you that. You've kept your head in the sand when much more knowledgeable researchers have written detailed explanations exposing the problem. A few sentences from me isn't going to help you get a clue.


RE: Poor Kodak....
By melgross on 7/2/2011 10:53:31 PM , Rating: 2
Kodak made great professional cameras for decades. They made view cameras and lenses, they made SLR's and others. But as happened to other American camera manufacturers, they were killed by the cheaper products out of the far east in the '60's. They should have moved manufacturing there as others did.

In addition, financial people in the industry weren't happy about Kodak's growth. So they were forced to divest themselves of Eastman Chemical, and other divisions years ago. While film photography was growing rapidly, that worked. But afterwards, they were weakened by this as others were bolstered by their other divisions, such as Fuji Heavy Industries, and Canon.

This is all very sad, but it's what happens. Out with the old, and in with the new.


RE: Poor Kodak....
By Manch on 7/3/2011 9:18:14 PM , Rating: 1
Fuji was able to make cheaper disposable cameras because they performed a little industrial espionage and stole from Kodak.


RE: Poor Kodak....
By melgross on 7/2/2011 11:13:31 PM , Rating: 2
Kodak made great professional cameras for decades. They made view cameras and lenses, they made SLR's and others. But as happened to other American camera manufacturers, they were killed by the cheaper products out of the far east in the '60's. They should have moved manufacturing there as others did.

In addition, financial people in the industry weren't happy about Kodak's growth. So they were forced to divest themselves of Eastman Chemical, and other divisions years ago. While film photography was growing rapidly, that worked. But afterwards, they were weakened by this as others were bolstered by their other divisions, such as Fuji Heavy Industries, and Canon.

This is all very sad, but it's what happens. Out with the old, and in with the new.


RE: Poor Kodak....
By Justin Case on 7/4/2011 12:33:55 AM , Rating: 2
They were not great at making imagers. Kodak's DSLRs had over-ambitious specs, delivered terrible image quality (tons of noise and very agressive noise reduction that you couldn't turn off, even in raw mode), and that's why they failed. By the time they learned to make decent sensors, all the main camera manufacturers were making their own (well, Nikon's sensors are manufactured by Sony, but they're designed in-house).

Kodak was (is) great at one thing: film.


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