Apple Appeals Partial Kodak Patent Victory

Posted by at 4:11 pm on August 23, 2012

Nearly three weeks after US Bankruptcy Court Judge Allan Gropper ruled that the company had no claim to two imaging patents in its struggle with Kodak, Apple has filed an appeal challenging the judge’s finding. The two companies are locked in a dispute over the ownership of a total of 10 patents, with Apple seeking to block the auction of the two patents in particular.

Judge Gropper has allowed the auction of all 10 disputed patents to proceed, even though Apple argued that they should be removed from the auction portfolio due to the ongoing litigation. The auction itself covers some 1,100 patents Kodak has amassed over its long history, and which it is now trying to sell in order to raise money.

The disputed patents come from the early 90s, when Apple and Kodak collaborated on one of the earliest consumer digital cameras, the QuickTake and its related software. Apple maintains that the subsidiary FlashPoint Technology, which it set up for the collaboration, is the rightful owner.

Part of the reasoning behind Judge Gropper’s decision had to do with Apple’s 20-year wait to assert its ownership of the patents. Apple claims that Kodak “misappropriated” the shared technology, and tried repeatedly to stop or at least delay the auction unsuccessfully.

Kodak has said that it believes Apple is trying to sabotage the sale or lower the price so that it can buy back the patents itself, but despite Apple’s failure the auction has been said to have been unsuccessful, with the portfolio fetching far less in bids — including one from a group that finds Apple, Samsung and Google collaborating with NPE Intellectual Ventures — than it expected.

In his ruling, Judge Gropper rejected both the ownership of the patents as belonging to Apple along with state law “ownership” claims. Ironically, one of the two patents Apple has lost its claim on has been ruled invalid by the International Trade Commission, leaving Kodak with a hollow victory as the ruling complicates any effort to sell that particular patent.

Kodak has scheduled a final auction hearing for August 30, indicated that it has already picked a winning bid. Kodak may decide to keep some or all of the patents, but is struggling in bankruptcy and needs the liquidity to pay back creditors. Sources have indicated that the portfolio could fetch around $500 million.

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