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Apple loses bid to transfer Kodak patent battle out of Bankruptcy Court

Rochester Business Journal
July 27, 2012

Apple Inc. on Thursday lost its bid to move its digital patent dispute with Eastman Kodak Co. out of U.S. Bankruptcy Court and into U.S. District Court.

A U.S. District Court judge in Manhattan ruled against Apple's bid.

“We are pleased the District Court has denied Apple and Flashpoint (Technology Inc.)'s motion at this time, and that the court believes an undisrupted, efficient auction process under the supervision of the Bankruptcy Court is appropriate. Our work continues toward a successful auction next month,” Kodak said in a statement Thursday evening.

Kodak reiterated “Apple’s ownership claims are baseless, and nothing but an attempt to interfere with our patent auction.”

Apple told U.S. District Judge George Daniels at a court hearing Thursday in Manhattan that Kodak’s complaint over patent ownership should be considered in federal district court, Bloomberg reported. Apple argued in court papers the bankruptcy court lacks the authority or “necessary expertise” to decide the dispute. Kodak opposes withdrawal of the case.

Daniels, at the end of Thursday's day-long hearing, said he agreed with Kodak that the dispute should remain in bankruptcy court, at least until the judge there rules on some of the key issues, Reuters reported. Bankruptcy Judge Allan Gropper should have "an opportunity to render a decision on the motion and to have an opportunity to control and move forward the process," Daniels ruled.

Kodak plans to begin the sale of two portfolios of digital patents early next month. Kodak hopes to raise billions of dollars by selling its digital capture and Kodak imaging systems and services patent portfolios.

That sale process is expected to begin Aug. 8, with a goal of announcing the buyer by Aug. 13.

Kodak, which filed for Chapter 11 protection on Jan. 19, is counting on the sale of the two patent portfolios to provide cash needed for its post-bankruptcy turnaround. Estimates have put the value of those patents at more than $2 billion. The auction is expected to attract interest from key players in the technology industry.

Kodak began the effort to sell its digital patents last year in hope of finding a buyer in 2011.

The digital capture portfolio includes more than 700 patents covering aspects of image capture, processing and transmission technologies related to the design and operation of digital cameras and multifunction devices, including camera-enabled smartphones and tablets, Kodak said.

The Kodak imaging systems and services, or KISS, portfolio includes more than 400 patents that cover technologies including image analysis, manipulation and tagging, and network-based services, including image storage, access and fulfillment, the company said.

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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