By: Susan Decker
Source: http://www.businessweek.com
Category: Patent News
Jan. 11 (Bloomberg) -- Eastman Kodak Co., seeking to sell or license a portfolio of more than 1,100 patents, sued Apple Inc. and HTC Corp. in an expansion of a legal strategy that may help boost the value of its inventions to fund a turnaround.
Source: http://www.businessweek.com
Category: Patent News
Jan. 11 (Bloomberg) -- Eastman Kodak Co., seeking to sell or license a portfolio of more than 1,100 patents, sued Apple Inc. and HTC Corp. in an expansion of a legal strategy that may help boost the value of its inventions to fund a turnaround.
Two infringement lawsuits filed yesterday in
federal court in Rochester, New York, accuse the smartphone makers of
using without permission Kodak technology for image transmission,
including a way for users to share images directly from cameras. Kodak
also claims HTC is infringing an additional patent for a preview
feature, which is at the center of a U.S. International Trade Commission
case against Apple and Research In Motion Ltd.
“They’re trying to generate value for their
patent portfolio,” said Ron Epstein, chief executive officer of patent
brokerage Epicenter IP Group LLC in Redwood City, California.
Kodak, which is predicted by analysts to report
its fourth straight annual net loss, has put the Rochester-based
company’s digital-imaging patents up for sale to help fund changes to
its business. CEO Antonio Perez, who is now betting on digital printers
for publishers, packagers, advertisers and households to lift Kodak, has
said that the Apple-RIM trade commission case could generate $1 billion
in new revenue from settlements.
Kodak, which didn’t say how much the new Apple
and HTC cases could be worth, also filed companion complaints at the
trade commission yesterday in Washington, seeking to block imports of
products including Apple’s iPad and iPhone, and HTC’s Flyer tablet and
Wildfire S phone.
Bankruptcy Risk
“This is an important part of ongoing operations
to get them through the transition,” said Erin-Michael Gill, chief
intellectual property officer for MDB Capital Group LLC, a Santa Monica,
California-based investment bank. “A bad sign would be them sitting on
their hands and waiting for these to sell.”
Kodak said last year it hired Lazard Ltd. to help
it sell the patents and retained Jones Day among advisers helping on
strategic options.
The Apple-RIM trade commission case filed in
2010, involving the single image-preview patent, has met with delays
including the retirement of the judge handling the case, and a final
decision isn’t scheduled until September.
Moody’s Investors Service on Jan. 5 cut ratings
on about $1 billion of Kodak debt with a negative outlook, citing “a
heightened probability of a bankruptcy over the near-term” as liquidity
deteriorates, making a patent sale more challenging.
Portfolio Perceptions
Adding four new patents into the mix “helps, even
without litigating any of the issues, to counteract the impression that
there’s only one good patent” in the portfolio, said Ron Laurie,
managing director of Inflexion Point Strategy LLC in Palo Alto,
California, which counsels companies on intellectual property purchases.
Kodak “wanted to defuse that impression.”
The four patents asserted against Apple and HTC
have as co- inventor Kodak researcher Kenneth Parulski, who has more
than 190 patents and is “recognized as a pioneer in numerous digital
camera technologies,” according to the complaints.
Kodak claims infringement by Apple’s iPad 2,
iPhone and iPod Touch, and by HTC’s tablets and phones, including the
Flyer, EVO View 4G, Jetstream, Vivid, Amaze 4g, Desire, Hero S, Rezound,
Rhyme, Sensation 4G and Wildfire S.
“We’ve had numerous discussions with both
companies in an attempt to resolve this issue, and we have not been able
to reach a satisfactory agreement,” Laura Quatela, Kodak’s chief
operating officer, said in a statement. “Our primary interest is not to
disrupt the availability of any product but to obtain fair compensation
for the unauthorized use of our technology.”
HTC, based in Taoyuan, Taiwan, had no comment on
the complaints. Officials with Cupertino, California-based Apple didn’t
reply to a request for comment.
Stock Market Value
Selling patents and debt will help determine “the
company’s ability to continue its operations” in the next 12 months,
Kodak said in a quarterly regulatory filing in November. Kodak said then
it would pursue licensing opportunities for the patents if unable to
sell them at “an appropriate price.”
Kodak, which lost 88 percent of its stock market
value last year, has struggled since demand for photographic film began
evaporating as the world embraced digital cameras. Kodak’s cash and
equivalents fell to $862 million at the end of its third quarter from
$1.4 billion a year earlier. The company is scheduled to report
fourth-quarter results Jan. 26.
Management Changes
Kodak rose 50 percent yesterday, to 60 cents,
after saying it was adjusting its management structure and creating a
chief operating office to reduce costs as its sales decline and cash
reserves dwindle. The chief operating office will be led by Quatela and
Philip Faraci, both presidents at Kodak. Faraci will focus on the
commercial segment and sales and regional operations, and Quatela will
lead the consumer segment and certain corporate functions, Kodak said.
The company’s $162 million market value “is lower
than the potential damages” the company could generate from litigation,
Epstein said.
“They’re looking at the mobile device companies
and saying, ‘The brilliance of your user interface and product
integration does not detract from the fact that you have integrated my
innovation into your product and you owe me something for it,’” Epstein
said.
The new case against Apple is Eastman Kodak Co.
v. Apple Inc., 12cv6020, and the case against HTC is Eastman Kodak Co.
v. HTC, 12cv6021, both U.S. District Court for the Western District of
New York (Rochester).
Source: http://www.businessweek.com/news/2012-01-11/kodak-s-latest-apple-htc-lawsuits-may-goose-value-of-patents.html
