John Paczkowski

Recent Posts by John Paczkowski

Unpleasant Development for Kodak: ITC Judge Rules Key Patent Invalid

Kodak’s plan to squeeze some much-needed cash out of its intellectual property portfolio has suffered another setback, one that may bleed it of some value.

On Monday, a U.S. International Trade Commission judge ruled one of Kodak’s key patents invalid, undermining the photography pioneer’s efforts to assert it against Apple and Research In Motion. In his decision, ITC Judge Thomas Pender wrote that while some Apple and RIM products did indeed violate some claims of Kodak’s 6,292,218 patent, the patent itself, which covers the ability for a digital camera to preview images on an LCD screen, is invalid.

The ’218 patent is referred to by some as the “crown jewel” of Kodak’s portfolio, so Pender’s ruling is potentially a major blow to the company, which is looking to maximize the value of its IP ahead of a bankruptcy auction. Indeed, just last week Kodak accused Apple of attempting to undermine its efforts by asserting ownership claims over the ’218 patent.

“Apple’s decision to press its ownership claims now … should be seen for what it is, namely, a ploy calculated to prevent the debtors from using the [bankruptcy] sale process to obtain a fair price for Kodak’s digital capture portfolio (or to enable Apple to buy it on the cheap and extinguish its infringement exposure),” Kodak said in court documents filed last week.

It seems now that the ploy was a wasted effort. There are few better ways of extinguishing a company’s infringement exposure than having the patent asserted against it ruled invalid. And, as RIM noted in a statement issued Monday afternoon, Pender is the second ITC judge to rule the ’218 patent invalid.

That said, Apple and RIM aren’t entirely out of the woods yet. Kodak plans to appeal Pender’s ruling to the full commission. And it says it’s confident it will prevail in the end, since the U.S. Patent and Trademark Office confirmed ’218’s validity in 2010.

Regardless, Pender’s ruling couldn’t come at a worse time. Sources say that Kodak has been looking to attract a stalking-horse bidder who would put down an initial offer for its patent portfolio as it gears up for its bankruptcy auction. Having the patent that’s at the center of its high-profile battle with Apple and RIM tossed aside by the ITC isn’t going to aid that effort.

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