Kodak Sues Apple for Interfering in Patent Sale

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Apple vs. KodakKodak has launched a new lawsuit against Apple, accusing the company of interfering with its attempt to sell a portion of its patent portfolio in order to drive down the value of that portfolio. For its part, Apple has been claiming in court that it actually owns ten patents that Kodak is trying to sell, and the company has been trying to have the ownership of those patents determined outside of the bankruptcy court overseeing the sale.

Kodak’s new lawsuit is merely the latest salvo in the patent-related battle between the two companies. Each has filed suit against the other for patent infringement, and each has filed complaints with the U.S. International Trade Commission based on the same infringement claims.

Kodak has a strong case against Apple on a particular patent that has yielded “billions” of dollars in royalty licensing for Kodak since 2001, according to court documents filed in the new lawsuit and uncovered by Reuters. That patent covers previewing images on a digital camera on an LCD display, something that most of Apple’s products do in one way or another.

Which is why Kodak claims that Apple is the biggest infringer of its patents, even while it is potential buyer of those patents. While Kodak has successfully lined up companies to license its patent—and sued others into submission on the issue—Apple is not one of those companies, and does not pay a royalty.

For its part, Apple has said that Kodak “misappropriated” the technology in ten patents—including the key LCD preview patent—dating back to a time in the early 1990s. At that time, the two companies were working together on research and development efforts relating to digital photography, which was still in its early stages for commercial applications.

Accordingly, Apple doesn’t want those patents sold as part of Kodak’s bankruptcy proceedings while Apple is trying to litigate that ownership. It also doesn’t want the bankruptcy court to determine ownership because, Apple has argued, it’s a complex issue outside of the court’s competency level.

Not so fast, Kodak has said (on multiple occasions). The photography pioneer-fallen-on-hard-times has told the court that Apple is merely employing fear, uncertainty, and doubt (FUD in Microsoft-speak) to drive down the value of the patents so that it can pick them up at a cheaper price during the auction—Apple is a potential bidder for the portfolio.

“Apple’s strategy has been to use its substantial cash position to delay as long as possible the payment of royalties to Kodak [and interfere with the sale],” Kodak wrote, according to Reuters. “Apple and FlashPoint are seeking to benefit from Kodak’s difficult financial position, which will be exacerbated if the debtors cannot obtain fair value for the patents.”

FlashPoint Technology was spun off from Apple in 1996, and it also claims ownership of the patents in question.

Monday’s lawsuit is effectively an effort by Kodak to force the issue with the bankruptcy court, where it wants everything decided. In March, that court already rejected an effort by Apple to renew a stayed lawsuit over the ownership issue.

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