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.

"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken

Most Popular Articles

Copyright 2018 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki