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Apple Fights Kodak in Bankruptcy Court Over Patents

Apple Inc. (AAPL) and Eastman Kodak Co. clashed in federal bankruptcy court over the ownership of patents Kodak is planning to sell as part of its restructuring.

Kodak said Apple wants to disrupt the planned auction by claiming ownership of 10 patents and asked U.S. Bankruptcy Judge Allan Gropper in Manhattan to reject the personal computer maker’s claims.

Gropper didn’t immediately rule on the issue at a hearing today, saying he would issue a decision “as quickly as I can.”

A ruling for Kodak would bolster the Rochester, New York- based company as it seeks to reinvent itself and raise money after filing for bankruptcy earlier this year. Kodak is planning an auction next month for about 1,100 patents.

Apple waited too long to assert ownership claims, which arise out of joint work by the companies in the 1990s, according to Kodak, which cited the statute of limitations.

Kodak obtained the patents and enforced them through licensing deals “in a very public way” while Apple and Flashpoint Technology Inc., which is also part of the dispute, did nothing to challenge Kodak, Steven Holley, a Kodak attorney, told Gropper.

“Apple and Flashpoint cannot claim that this issue was only recently brought to their attention,” he said.

Pre-Trial Ruling

Kodak sued Apple in U.S. bankruptcy court in June over the patents. The company was asking Gropper for a pre-trial ruling in its favor, known as summary judgment. Apple has filed counterclaims against Kodak, saying the bankrupt company is claiming Apple’s technology as its own.

Apple is claiming ownership as part of an effort to prevent Kodak from getting a fair price for the assets, or Apple wants to buy the patents cheaply and extinguish its “very substantial” risk of patent infringement claims, Kodak said.

Cupertino, California-based Apple contends it wasn’t required to monitor patents Kodak obtained over time, looking for potential claims, nor would that have been practical.

“Kodak’s decision to file patent applications based on technology disclosed by Apple would have required extensive efforts and difficulty in monitoring and analyzing many thousands of Kodak patents,” Apple said in court papers.

Lost Patent Case

The hearing in bankruptcy court comes after Kodak lost a patent case against Apple and Research in Motion Ltd. The U.S. International Trade Commission on July 20 upheld a judge’s findings that neither Apple nor RIM violated Kodak’s rights in the patent. Kodak said it would appeal.

The bankruptcy case is In re Eastman Kodak Co. (EKDKQ), 12-10202, U.S. Bankruptcy Court, Southern District New York (Manhattan). The Apple lawsuit is Eastman Kodak Co. v. Apple Inc., 12-01720, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David McLaughlin in U.S. Bankruptcy Court in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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