Kodak Plans to Appeal ITC Loss to Apple & RIM

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Kodak plans to appeal a significant patent loss against Apple and Research In Motion. The U.S. International trade Commission upheld a preliminary ruling on Monday that found Kodak’s patent claims to be invalid, but Kodak put on a brave face and said it would appeal that ruling with the U.S. Court of Appeals.

At issue is patent ‘218, a patent that covered a method of displaying a preview image on an LCD screen for digital cameras. Kodak has successfully used that patent to earn billions in licensing royalty from a variety of electronics companies, including Apple arch-rival Samsung. The troubled company has said that Apple and RIM are also infringers, and that Apple owes Kodak more than US$1 billion in royalties based on the patent.

The patent is part of a large portfolio that Kodak is trying to auction off to pay off creditors. Much of the value of that portfolio has been tied to patent ‘218, based in part on the infringement claims against Apple, and to a much lesser extent, RIM.

Apple, however, has argued in court that Kodak misappropriated technology covered by a technology-sharing agreement between the two companies dating back to the 1990s. Apple has sued for ownership of the patent, while denying Kodak’s infringement claims.

Monday’s ruling from the ITC may make all this moot, as the ITC ruled the patent claims invalid, upholding a preliminary ruling to that effect. This would be a devastating blow to Kodak, as that patent is one of the most valuable assets the bankrupt company owns.

The company said in a statement that, “The validity of the ‘218 patent has been upheld in previous litigation at the ITC and was affirmed by the US Patent and Trade Office in the face of two separate challenges. We are confident that its validity will ultimately be upheld.”

That statement is accurate, too. The patent has been upheld in past patent infringement claims against other companies, and it was recently affirmed by the U.S. Patent & Trade Office. With various and split rulings as precedent, it remains to be seen how the U.S. Court of Appeals handles the case.

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Kodak is not telling the whole story when it claims the patent’s validity has been upheld by the ITC in the past. The ITC in preliminary rulings held in favor of Kodak against Samsung and HTC. These companies were afraid of import bans so they settled quickly without asking the full ITC commission to evaluate the preliminary findings.

Further, every defendant is entitled to make a defense. Here Apple and RIM succeeded in arguing the patent in question was invalid. This probably is largely due to Apple’s previous involvement with digital cameras.


But did you know that the invalidity was due to one of the previous KODAK patent for obvious reason clause? That is, the newer patent is invalid since the previous KODAK patent can cover the new one. So in essence, Apples is infringing the previous KODAK patent.

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