Judge Allan L. Gropper of U.S. Bankruptcy Court in Manhattan’s rulings covered both a pending suit Apple has against Kodak over the patent, as well as another complaint it wants to bring that covers damages the company thinks it is owed since Kodak filed for Chapter 11. The pending suit in the U.S. District Court in Rochester, N.Y., had already been stopped automatically by both the International Trade Commission and bankruptcy law, but Apple sought to lift the “automatic stay” shielding Kodak from litigation so the suit could continue.

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The new executive would report to the board and could have broad powers to manage Kodak’s finances and operations.

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The struggling photography icon, which employs about 19,000 people, is in discussions with potential lenders for around $1 billion in so-called debtor-in possession financing that would keep it afloat during bankruptcy proceedings, the people said. A filing could occur as soon as this month or early February, one of the people said.

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The people said the onetime film giant has approached photo-sharing websites, competitors, private-equity firms and retailers about buying the unit, which enables users to store their digital photos and print them out into scrapbooks, cards and calendars for a fee.

The Rochester, N.Y.-based company is seeking “hundreds of millions of dollars” for Kodak Gallery, according to a person who has been approached to buy the business. But the site has been losing users in recent years, and the drop in traffic is a big deterrent to potential buyers, people who were approached say.

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The cautionary statement, in a filing with the Securities and Exchange Commission, came as the company reported another drop in cash in for third quarter, even after it drew $160 million from its credit line.

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Imax will pay Kodak an upfront fee of tens of millions of dollars — but less than $50 million — and will pay recurring royalties and other payments as it uses the Kodak patents to make products, said a person familiar with the matter.

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The move to hire restructuring lawyers signals Kodak is intensifying efforts to ensure it has the financial wherewithal to complete a difficult strategic and financial revamp. Shares in the 131-year-old company have lost around a third of their value this week following Kodak’s disclosure that it pulled $160 million from a credit line.

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Investment bank Lazard Ltd. began marketing the portfolio this week, reaching out to companies that might be interested, said a person familiar with the matter. One interested company is a large, strategic buyer in the wireless industry looking to use the patents for defensive protection, said another person familiar with the matter.

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The imaging company recently said it is considering the sale of 1,100 patents, or 10% of the company’s portfolio. Kodak said the patents at stake covered capturing, storing, organizing and sharing digital images, but didn’t specify whether the sale would include the one at issue in the Apple and RIM lawsuits.

Kodak now acknowledges the image-previewing patent is up for sale, as well as patents that Kodak is litigating against Shutterfly Inc. The move makes clear Kodak’s eagerness to raise cash after two straight quarters in which patent litigation income dried up, contributing to losses.

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This marks the first time the Rochester, N.Y.-based company has received what is known as a negative initial determination recommendation from the trade body. An administrative law judge at the ITC found Kodak’s patents invalid and not infringed by Apple’s iPhone or RIM’s BlackBerry devices. The final decision is expected May 23.

Kodak reports fourth-quarter earnings Wednesday.

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BoomTown did an interview last night with outgoing RealNetworks (RNWK) CEO Rob Glaser after the announcement yesterday of his departure from the company he founded and led for 16 years.

That will be posted later today, but here is a profile of Glaser I wrote after spending time with him in Seattle, when I was covering the Internet for The Wall Street Journal.

It’s from Feb. 12, 1998–yes, that means Rob and I are genuine Web antiques–and focuses on Glaser’s decidedly complicated relationship with his former employer, Microsoft (MSFT).

As you will see, it comes from a much different era of the Internet, when Microsoft was much scarier, RealNetworks represented innovation and the medium was still in its infancy. My favorite line is a description of Glaser as “radiating so much intensity that his face resembles a clenched fist.”

Here it is:

Rob Glaser learned the software business as one of Bill Gates’s most aggressive proteges at Microsoft Corp. So he knows all too well the anguishing strategic decision that most software entrepreneurs inevitably confront: Go head-to-head against Mr. Gates and risk annihilation. Or cooperate with him–and risk annihilation.

Now an Internet entrepreneur himself, Mr. Glaser thinks he has another strategy: A delicate dance with Microsoft that combines a little bit of competition and a little bit of cooperation.

His newly public company, RealNetworks Inc., popularized the use of realtime audio and video on the Internet’s World Wide Web. It already has more than 18 million registered users of its free “streaming” software for receiving multimedia over the Net. It also has a rapidly growing business selling server software for transmitting audio and video to Website operators.

But it stands squarely in the path of the strategy that has drawn Microsoft into trouble with antitrust regulators: Emulating innovative products, integrating them into its operating systems and then giving them away free. RealNetworks’ daunting task is to prove it can do a better job of outmaneuvering Microsoft than Netscape Communications Inc., the browser pioneer whose market share and profitability have been devastated by Microsoft’s integration strategy.

Mr. Glaser insists he and the software giant can coexist. “I learned an amazing amount from Bill,” he says, speaking in staccato bursts and radiating so much intensity that his face resembles a clenched fist. “We knew we could either compete head-on like Netscape or do something a lot more interesting.”

His strategy is known internally as “coopetition.” Out of mistrust, Netscape two years ago rejected an unsolicited offer from Microsoft to become a partner and investor. But Mr. Glaser approached his former colleagues last summer seeking just such an alliance. In July, he sold a nonvoting 10% stake to Microsoft for $30 million, and licensed RealNetworks’ technology to the software giant for another $30 million. Microsoft also agreed to bundle RealNetworks’ software with Internet Explorer.

In making the deal, Mr. Glaser helped himself to Microsoft’s cash and prestige and calculated that Microsoft wouldn’t consider streaming technology to be as strategic to its future as the browser.

“What we were trying to do in the partnership is to set it up so that our success would not disadvantage their core business,” Mr. Glaser says. “Microsoft is a very paranoid company and so we have tried to create an environment where while they might be covetous of some of our success, analytically they would not fear it.”

The deal gave Mr. Gates the opportunity, if he so desired, to clone RealNetworks’ products during the period when they were licensed to Microsoft. “There’s no question they could use our own technology to become extremely vigorous competitors and try to put us out of business,” says James Breyer, a director and member of Accel Partners, a venture-capital firm that helped finance RealNetworks.

So Mr. Glaser needs to stay ahead of Microsoft by rapidly improving his software, accumulating enough customers to become the standard for sending audio and video over the Internet and diversifying into related businesses.

Last month, for example, he announced an agreement with one of Microsoft’s archrivals, Sun Microsystems Inc., to finetune his software to perform better on Sun’s popular Internet servers than on Windows-based servers.

“They are neither friend nor foe, but Microsoft is most certainly the environment we live in,” says Mr. Glaser, now 36 years old. “It’s how we work within that environment that will make all the difference.”

Mr. Glaser’s own personality seems suited to the relationship’s contradictions. He has been a committed liberal since his days at Yale University, where he wrote a column called “What’s Left” for the student newspaper. He initially named his company Progressive Networks to reflect his politics. And he donated 700,000 RealNetworks shares to causes related to freedom of speech and environmental issues after the public offering, and promises to contribute 5% of the company’s future profits as well.

But he became a notoriously hardcharging and sometimes arrogant manager after he joined Microsoft in 1983, at the age of 21. Some colleagues dubbed him a “screamer.” When deadlines approached for projects, several former colleagues at Microsoft say he became increasingly revved-up, downing one Diet Coke after another and erupting at even tiny mistakes. “My intensity sometimes manifested itself in less positive ways,” Mr. Glaser concedes.

“Like Microsoft, Rob was smart, young, perhaps a little hard to take, and convinced he was absolutely right about a lot of stuff,” recalls Mike Slade, a friend of Mr. Glaser’s at Microsoft who now runs an Internet publishing company, Starwave Corp. “But that was what was rewarded at the company and everything was going too fast there for a lot of management training.”

The pace did take its toll. Even though Mr. Glaser rose to become vice president of multimedia systems and one of Mr. Gates’s favorites, his last years at Microsoft were rocky. Some at the company point to an internal power struggle with Microsoft’s head of technology, Nathan Myhrvold. “They both wanted to be Bill’s boy genius and visionary for the company,” says a colleague. “Obviously, Nathan won.”

Mr. Glaser dismisses tales of infighting, blaming his departure on a diminishing feeling of “joy” in his work. “I began to think that Bill had the best job of all,” he says. In 1993, at the age of 31, he resigned, with about $15 million of stock in his pocket.

His retirement didn’t last long. Soon after, he saw a version of the Mosaic browser, the first graphical interface software for navigating the Web. He had an epiphany, he says, realizing that the Internet could eventually become a major purveyor of audio and video.

Mr. Glaser sank about $1 million of his own money into a start-up that would first produce software for compressing and transmitting sound. With additional funding from friends, such as Lotus founder Mitch Kapor, RealAudio 1.0 quickly made its debut in April 1995.

RealAudio was greeted with more than a little disdain from the Internet elite because it was a tinny and unsatisfying experience for most users. But it gave the Internet a voice, and Mr. Glaser kept plugging away, improving fidelity and striking deals with more content providers to use it on their Web sites. The hook: Free player software for consumers.

He is attempting to repeat the process with RealVideo. It currently provides small, jerky moving pictures but will, he believes, someday transform the Internet as data transmission speeds increase. In a recent demo of the player, Mr. Glaser selected a music video by the languid singer Jewel, he joked, “because she doesn’t move around too much.”

Meanwhile, Microsoft has been developing its own Media Player and NetShow streaming software, partly with technology acquired by purchasing VXtreme, a RealNetworks competitor.

The Microsoft products are now free. But the company may decide to charge for the latest version of NetShow coming out this year, which would be good for RealNetworks. Meanwhile, Microsoft will continue to bundle RealNetworks’ player software with the Microsoft browser, also good for RealNetworks. And the day after RealNetworks’ Sun deal, Microsoft announced an agreement to make its own Media Player compatible with RealNetworks’ server software, yet another positive development for RealNetworks.

“The user only wants it to work,” says Rich Tong, a Microsoft marketing vice president. “So it is good business to work with RealNetworks to set standards for compatibility and expand the market for all of us.”

Skeptics assert that RealNetworks has forged only a temporary truce with Microsoft. Like Netscape, it must continually confront the challenge of trying to make money on technology that Microsoft gives away. RealNetworks charges $29.95 for an enhanced version of the player it gives away free, and $695 and up for its most powerful server software.

Some large companies are snapping the products up. Mercedes Benz, Eastman Kodak and Lockheed Martin are buying RealNetworks’ latest software, RealSystem 5.0, to bring their internal networks to life. Boeing Co., for example, uses RealNetworks’ software to communicate with employees world-wide and conduct training sessions. A variety of media concerns such as Metro-Goldwyn-Mayer, the Public Broadcasting System, AOL, Fox News’s 24-hour newsfeed and Paramount Pictures use it as well.

Mr. Glaser recently cut a deal with Macromedia Inc., the largest provider of animation-editing software, to transmit animated material over the Internet. RealNetworks is also operating multimedia Web sites for other companies, and has a joint venture with MCI Communications Corp. to create a broadcast network on the Web.

All these initiatives are running up big bills. Earlier this month, RealNetworks reported that revenue more than doubled for 1997, to $32.7 million from $14 million the year before. But heavy research and development spending tripled losses to $11.2 million, or 40 cents a share, from $3.8 million, or 14 cents a share. The company’s high costs, plus the looming threat of Microsoft, have depressed the stock, which hovers at around $16 a share, only slightly above the $12.50 a share it opened at when it went public in November.

But Mr. Glaser exudes confidence. His intense personality seems calmer these days. Once divorced, he now has a steady girlfriend and is traveling more frequently, including a summer trip to New Zealand, Australia and French Polynesia, where he made the decision to take RealNetworks public. His 13.5 million shares are worth $218.5 million. And he thinks he has Microsoft figured out. “People in Silicon Valley see things unnecessarily in black and white: You either hate Microsoft or you are a vassal of them. I am saying there is a third way.”

Thankfully, we’ll always have that wonderful Paul Simon song by which to remember it.

Kodachrome was on the market for 74 years–all those birthday parties and National Geographic covers. But you can’t stop progress, as Steve McCurry, who snapped what may well be the most famous Kodachrome photo ever (above), notes.

“The early part of my career was dominated by Kodachrome, and I reached for that film to shoot some of my most memorable images,” said McCurry. “While Kodachrome Film was very good to me, I have since moved on to other films and digital to create my images. In fact, when I returned to shoot the ‘Afghan Girl’ 17 years later, I used Kodak’s E100VS film to create that image, rather than Kodachrome Film as with the original.”

[Image credit: Steve McCurry via Wikipedia]

Thankfully, we’ll always have that wonderful Paul Simon song by which to remember it.

Kodachrome was on the market for 74 years–all those birthday parties and National Geographic covers. But you can’t stop progress, as Steve McCurry, who snapped what may well be the most famous Kodachrome photo ever (above), notes.

“The early part of my career was dominated by Kodachrome, and I reached for that film to shoot some of my most memorable images,” said McCurry. “While Kodachrome Film was very good to me, I have since moved on to other films and digital to create my images. In fact, when I returned to shoot the ‘Afghan Girl’ 17 years later, I used Kodak’s E100VS film to create that image, rather than Kodachrome Film as with the original.”

[Image credit: Steve McCurry via Wikipedia]

The Kodak Theatre HD Player’s motion-sensing pointer remote works much like a mouse on a TV screen.

This week I tested the Kodak Theatre HD Player, the photo-centric company’s attempt to snag valuable real estate in the living room. This small, black box pulls photos and videos from computers around the house and displays them on an HDTV. It also enables the sending and receiving of photos via Kodak Gallery, and connects to Web-based photos stored on Flickr, Facebook, Picasa, .Mac and others. Podcasts, Internet Radio and updates from news feeds, weather forecasts and stock quotes are also accessible using the HD Player. And it has a terrifically simple motion-sensing remote that works like using a mouse on a TV screen.

But the HD Player isn’t all smiles. Its $299 price doesn’t include any built-in storage for keeping content directly on the device. It currently has no way of accessing HD movies or television shows, nor will it work with Macs. In comparison, Apple’s (AAPL) $229 Apple TV has 40 gigabytes of storage, can access HD television shows and movies via the iTunes Store, and works with Macs and Windows PCs. This is important because as budgets tighten in the current economy, gadgets have to prove their value and versatility more than ever.

After using the Kodak Theatre HD Player with Windows XP and Vista machines over the past week, I can conclude that this device’s interface shines in its simplicity and is a lot of fun to use. Kodak teamed with Hillcrest Labs to make the player’s motion-sensitive remote and corresponding software, which includes satisfying extra features like images that automatically magnify when the remote control’s cursor points at them and icons that make chirping sounds when selected. The remote itself is shaped to rest comfortably in a hand and has three simple buttons and a scroll wheel.

Quick-access memory-card slots for six types of memory cards appear on the box’s front, and two USB ports can connect to digital cameras or USB storage devices.

Currently, the player’s software works directly with Flickr, RadioTime (8,750 radio stations) and FrameChannel, which grants access to various “channels” like Facebook, .Mac, Picasa, People.com news and National Geographic. Kodak says it will incorporate YouTube access in January; I got a sneak peek at the interface for this and it looks well-organized.

Yet the HD Player’s smart combination of software and remote left me wishing it did a bit more. Photo sharing is enabled only via Kodak Gallery, so you can’t use another Web-based account to share photos directly from your TV. Likewise, a blue light on the box slowly blinks only when new Picture Mail (a message containing shared photos) is received on a Kodak Gallery account, not when new photos are added on other sources such as Flickr Photostreams or Facebook pages.

The Home screen of the HD Player shows four categories: Pictures & Videos, Kodak Gallery, Music and Entertainment. Subcategories are where you might guess they would be, for example podcasts are listed under Entertainment. And a tiny Home icon appears in the top right corner of every screen so you can always get Home with one click. The Pictures & Videos category holds photos and videos from a currently selected Windows PC.

An unlimited number of Windows PCs can wirelessly pair with the player as long as they have special Kodak software installed on them. But only one PC’s content can be accessed at a time. I toggled between two paired computers without a problem, but would’ve preferred accessing music and photos from both sources simultaneously.

The HD Player’s motion-sensing pointer remote works much like a Wii remote control. Wherever you move it, a tiny leaf-shaped cursor appears on-screen. A Hide button on the remote will hide the cursor while you watch slideshows. The remote’s Back button is helpful; when pressed, it backs you out of one screen using visual effects that make the screen shrink into the TV as if you were moving backward.

A play button appears on the first photo in a folder so users can select this icon to quickly start slideshows. Whenever the HD Player receives new Kodak Gallery Picture Mail, or a slideshow is created on a connected PC, yellow alert circles appear on the screen to notify users and a number in the middle of these yellow circles indicates how many new items are available for viewing.

Some content on my PCs took a little while to be recognized by the HD Player, including podcasts that I subscribe to on iTunes. When they did show up, both audio and video podcasts played without issue and on-screen playback buttons made them easy to control.

The HD Player uses your photos to create automatically generated slideshows, called Picture Chronicles, once a week. These Picture Chronicles use up to 50 photos from the same time of year in all of your folders, for instance grouping all Thanksgiving photos together from the past five years.

Kodak has plans to make its player Mac-compatible in the future and also hopes to add other partnerships with new types of content following its YouTube announcement early next year.

The Kodak Theatre HD Player does its job well, bringing photos and videos that might otherwise live only on your PC to your big screen HDTV. For the holidays, this device could be a real plus. But Kodak has some work to do to make this a more useful Web-connected tool.

Edited by Walter S. Mossberg

• Email us at mossbergsolution@wsj.com. Find this and other columns and videos online free at the All Things Digital Web site: http://walt.allthingsd.com

So I took a trip up to Rochester, N.Y., over the summer to visit Kodak, the once powerful film giant, which has been struggling in recent years to make the difficult transition from film to digital.

I made a few videos there and then neglected to post them in the rush of other breaking news.

But this glimpse at the declining city Kodak once ruled, along with an interview with Philip Faraci, who was recently named President and COO for all of Eastman Kodak, is illuminating as the company tries to transform itself drastically. (In a side note, Faraci previously worked at Hewlett-Packard for a little more than two decades.)

Here is the first video with Faraci:

That’s a lot harder when you are talking about a business with such a massive legacy as Kodak has carried, even though it was once considered to be the tech marvel of the day. That’s especially true when it is compared to its current competitors, the shape-shifting digital entrepreneurs of Silicon Valley.

Under current CEO Antonio Perez (also a former H-P exec), whom I interviewed at D4 in 2005, Kodak has been trying to dig itself out of a hole and into consistent profitability. (Full disclosure: Kodak has been a regular sponsor of the D: All Things Digital conference that I run with Walt Mossberg.)

That shift has obviously been painful, including huge cuts in its employee base, due to the sharp decline of its market might. Since 2004, Kodak has cut its employee head count from about 64,000 to 30,600 as it has undergone a massive restructuring.

Things are looking up, though. In its most recent quarter, reported in early November, Kodak had a profit on a small sales decline. Its digital sales, from products like inkjet printers and digital cameras, rose to $1.59 billion, up 12%, and represented 60% of revenue. Film-based revenue was down 16%, to $698 million.

Whatever happens, Kodak is an interesting tech turnaround to watch.

(Here is my second Kodak video.)