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Eastman Kodak Co. shares were up nearly 30 percent in mid-afternoon trading Thursday, one day after a U.S. Bankruptcy Court judge said Kodak can sell two disputed patents despite Apple Inc.’s objections.
Around 3 p.m., Kodak shares (OTC: EKDKQ) were trading at 52 cents, up from a close of 40 cents the day before.
Manhattan Judge Allan Gropper on Wednesday shot down Apple’s challenge to the sale of two digital imaging patents— “218” and “335”—that it and the former camera giant are wrangling over. At the same time, he said it was premature to grant Kodak’s motion for the right to sell several other patents.
Kodak wants the patents in dispute to be among those offered in a Bankruptcy Court auction of some 1,000 patents.
Beginning with Kodak’s attempt to collect royalties for patents it claims Apple’s iPhone cameras infringe on, Apple and Kodak had sparred over the ownership and validity of a number of imaging patents before Kodak sought Bankruptcy Court protection. Cases filed by both sides are pending in federal district courts, California state court and before the International Trade Commission.
Claims made by Apple in the court cases include that Kodak stole imaging technology from it when the companies cooperated in research and development projects years ago and that some Kodak patents are invalid.
Apple spinoff Flashpoint Technologies Inc. also is a party to the Bankruptcy Court dispute. Flashpoint claims Apple ceded rights to certain digital patents to it as part of an agreement covering Flashpoint’s 1996 spinoff from Apple.
In the bankruptcy Kodak filed last January, Apple filed papers early on, seeking to exclude the disputed patents from the auction.
Gropper said the time for raising objections to the patent sale had passed.
Raising money through a sale of much of its digital imaging patent portfolio is a key part of the cash-strapped Kodak’s strategy to emerge from Chapter 11. Some have speculated that a July ITC ruling that found a key Kodak patent be invalid would take much of the wind out of the patent auction’s sails.
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