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.

At issue here is a patent covering the ability for a digital camera to preview images on an LCD screen. Apple sued Kodak over the technology, claiming that Kodak “misappropriated” it when the two companies were working together years ago. Kodak — which filed for bankruptcy in January and is looking to sell off this patent, along with a host of others, to pay off its creditors — insists that Apple’s ownership claim is “baseless.” And now it’s arguing that Apple’s intent, by alleging misappropriation, is simply to avoid paying royalty payments on it, or to drive the patent’s value down so it can purchase it at a lower price.

“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 earlier this week, adding that Apple’s ownership claim has already been “squarely rejected” by an International Trade Commission judge.

And, to some extent, it does have a point. Apple didn’t file suit against Kodak until nine years after the patent was first issued, and decades after the two companies worked together on exploring how best to commercialize Apple’s digital camera technologies.

But then, Kodak didn’t sue Apple until 2010, amid the collapse of its finances and a looming Chapter 11 filing. So if Apple’s decision to press ownership claims nine years after the fact is a ploy, then what is Kodak’s decision to assert this patent against Apple a year ealier? A ploy to drive up the patent’s price in advance of a sale?

Just another business negotiation being carried out in the courts …

Five years ago, AllThingsD.com was launched with just a few staffers, a few stories and a whole lot of hope. Also, as it turned out, with a panoply of LOLcat photos.

The site had soft-launched a little earlier, but — officially — we opened our doors in the late evening of April 26, 2007. Walt Mossberg wrote about a Kodak printer; John Paczkowski wrote about, wait for it, Apple; and I opined on how then-Yahoo-CEO Terry Semel might save the troubled company.

The more things change …

Actually, despite the fact that we have grown hugely in both traffic and staff, and have logged almost 26,000 posts, little has changed in how ATD looks at its role in covering tech, using stringent standards of fairness, accuracy, ethics and reporting.

As I wrote back then: “That is what we will be trying to do most of the time here, attempting to figure out what is happening in the digital space and explaining it in a way that is clear and cogent.”

And, of course, have some fun doing it.

Thus, mission accomplished, and mission never accomplished, too.

Walt and I want to thank everyone, from our outstanding staff to our Dow Jones colleagues to the many companies we cover to — most of all — our readers.

There is a lot more to come going forward, and we hope to never disappoint and always delight.

And, as I also wrote back then at the dawn of AllThingsD:

“But enough looking back: On to the next thing.”

And to my amazing partner, Walt, you knew I could not resist:

If you want a quick analysis of why Facebook would pay $1 billion for popular photo-sharing service Instagram, please ignore the obvious financials that just don’t add up at all and have most of the typically unshockable digerati shocked by the sheer amount of the price.

Actually, it’s pretty simple: Photos. Photos. And, oh yes, mobile photos — lots and lots and lots of them.

Astonishingly, Facebook users already upload an average of more than 250 million images daily, making it the most popular photo-sharing service on the Web.

But it’s not the best by far and not the most mobile, which is Facebook’s biggest weakness — that has been accomplished many others, especially Instagram, the favorite of power users who scoffed at Facebook’s weak tools. (The horror of no filters!)

Now — instead of all those billions of juicy digital photos snapped by an ever-growing legion of smartphone users loading up to the beautifully designed Instagram mobile app and living on the servers of the small San Francisco-based start-up — Facebook has now captured all these memories for its massive social networking site.

And while $1 billion seems an awful lot to pay for that privilege — Twitter is quaking with “OMG!” and “Wow!” and “WTF!” tweets about the acquisition — this is apparently priceless for Facebook in a deal that went down quickly and quietly in recent weeks.

That and the fact that the huge sum prevented Instagram from being scooped up by Google.

It’s a clear signal from CEO and co-founder Mark Zuckerberg — who rules all product efforts at the company — of his intent to dominate all innovations that have to do with owning the social experience.

Because while many Instagram photos quickly made their way onto Facebook — sharing on the service, as well as on Twitter, was a big part of the app’s offering — the future of the Menlo Park, Calif.-based company is tied to having control over key elements of the user experience.

Of all of those — communications, status updates, content linking — it has been photos that have become perhaps the most important part of Facebook, almost since its beginnings.

Photos are what allowed Facebook to grow so quickly and what made it more than just a blue sea of text and links to consumers. Its new Timeline depends on big, pretty photos, and Facebook even recently announced that it would allow full-screen viewing of high-resolution photos on its Web site, a pricey endeavor.

So, perhaps it was inevitable that Zuckerberg would pay up for Instagram, too — he knows a good entrepreneurial success when he sees one and apparently has the power to convince start-ups that he can make their bigger dreams come true.

Whether or not Instagram ever makes money is perhaps beside the point at this moment in time, as Facebook is poised to go public at 100 times the amount it forked over for Instagram.

But that it considers such a purchase worth as much as one percent of its expected valuation says a thousands words. And most of those words are “mobile” and “photo.”

As Ben Jacobs noted on Twitter: “Kodak goes bankrupt and Instagram is worth a billion dollars. 2012, y’all.”

Indeed. And, I have no doubt if Zuckerberg could figure out a way to shove all those Kodak moments from analog snapshots onto Facebook easily, he’d have paid up for that, too.

In what is either the boldest gamble of its history or the most boneheaded, Yahoo has filed a massive patent infringement lawsuit against Facebook.

The attack by the Silicon Valley Internet icon against perhaps the most powerful consumer social networking site today — also based in tech’s heartland and also an important partner of Yahoo — is sure to be a controversial one, pitting Yahoo against a company that has surpassed it handily in recent years in regards to popularity among consumers.

“Facebook’s entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo’s patented social networking technology,” Yahoo’s lawsuit reads, in part.

That includes, Yahoo alleges, Facebook’s popular News Feed, advertising methods, privacy settings and more. The company adds that Facebook has been “free riding” on Yahoo’s intellectual property and that royalty payments alone will not suffice.

So what does Yahoo want for this alleged free ride? Triple damages and to enjoin Facebook from operating by using said patents.

The 19-page lawsuit over 10 patents — related to advertising, privacy, customization, messaging and social networking — comes as Yahoo is seeking to right itself under new CEO Scott Thompson.

Multiple sources said he is primarily driving this new aggressiveness from Yahoo.

Since Yahoo told the New York Times that it was considering such a move last week, the issue has been widely debated within the company, with many top techies there opposed to it, due to the company’s longstanding ethos of using patents for defense rather than offense.

Thus, the decision to move was closely held, sources said, with only Thompson and legal chief Michael Callahan largely working on it.

Still, patent lawsuits have become ever more prevalent among tech companies, as they seek to battle for advantage in a rapidly changing competitive landscape. Apple, Google, Microsoft and others are involved in several legal actions, although they are largely related to mobile technology.

Yahoo’s lawsuit is the most prominent in the social networking arena, a sector that has seen a huge explosion of late. Its timing could not be worse for Facebook, since it is in a quiet period for its upcoming IPO, which is expected to value the company at close to $100 billion.

Yahoo has done this kind of thing before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock.

Yahoo is shaking Facebook down for much more here and with much higher stakes for both companies. If successful, Yahoo could seriously damage Facebook’s initial public offering; if not, Yahoo will cement its growing reputation as a company with nothing to lose, whose value is built not on its current business, but on non-operating assets.

More importantly, at least initially, the move did nothing to boost Yahoo’s moribund shares — the stock was down about one percent to $14.49 in after-hours trading.

More to come, but here is the entire document below. The lawsuit has been filed in San Jose, Calif., federal court.

Lastly, the official PR back-and-forth:

Said Yahoo, in its statement:

“Yahoo! has invested substantial resources in research and development through the years, which has resulted in numerous patented inventions of technology that other companies have licensed. These technologies are the foundation of our business that engages over 700 million monthly unique visitors and represent the spirit of innovation upon which Yahoo! is built. Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court. We are confident that we will prevail.”

Facebook, obviously, disagrees, and also threw in a jab about the lack of discussions over the issue between the pair:

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation. Once again, we learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”

I’ll admit to also being puzzled about the strategery here, but I am sure there will be much more to come.

Until then, read on:

Complaint

And here is what I wrote last week on the subject:

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.
That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

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.

Read the rest of this post on the original site »

It was Yahoo legal head Mike Callahan who had the thankless task yesterday of calling Facebook’s general counsel Ted Ullyot to tell him the Silicon Valley Internet giant was intent on pursuing patent lawsuits against the social networking giant.

The charge was being led by Callahan, as well as Chief Product Officer Blake Irving and, especially, Yahoo’s new CEO Scott Thompson.

Much of Yahoo’s senior leadership had no idea of the impending move until Callahan informed them it was about to happen at meeting Monday.

Facebook had known of the patent concerns of Yahoo for some months — the issue had also gotten some coverage in the media — but had not engaged formally on the topic, several sources said.

So, the suddenly aggressive call also apparently blindsided Facebook, even though it had been aware of the possibility of such an outcome.

Thus, it had little time to respond, since Yahoo was also simultaneously briefing the New York Times, according to numerous sources at both companies, and then released an astonishing statement to the newspaper:

“Yahoo has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property. We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights.”

Apparently, Yahoo’s new motto: If you can’t beat ‘em — and it can’t — sue ‘em.

That would be Yahoo — the perpetual 98-pound weakling of the Internet these days — threatening powerful Facebook, which had cleanly bested it by attracting hordes of users with a plethora of popular products and services.

Yahoo has already lost its audience to Facebook, which was most recently followed by its frittering away a commanding lead in display advertising, too.

That would also be the Yahoo whose most recent success in improving its increasingly tenuous connections with customers was, in fact, by deeply integrating Facebook’s social hooks into its Web properties.

That would be the Yahoo which has failed time and again to innovate its own offerings so drastically over the years that it has now apparently decided that its first and best strategic move under Thompson’s rule is a shakedown.

Such a cynical move on rights Yahoo has long held seems more a play for the cheap seats of Wall Street, given that the company needs to look like it is doing everything it can to turn things around right now as it faces a proxy challenge.

First, it ended difficult talks with its Asian partners, Alibaba Group and SoftBank, over selling back lucrative stakes there.

Now, according to sources, Yahoo’s Thompson has actually been trying to make very nice with activist shareholder Daniel Loeb of Third Point — on-the-down-low chitchats that might have played a part of this latest unusual move.

At least Kodak had a good excuse. The once iconic camera company had recently been trying to take advantage of its trove of patents as a way to stave off declaring bankruptcy.

That didn’t work for Kodak, and it will also not work for Yahoo, whose only real option is to try to innovate its way out of the mess it has landed itself in.

You know, with good ideas.

Instead, the company’s leadership has opted for a road that could rain down trouble and paint Yahoo as a company bereft of talent to win any other way.

And while a range of intellectual property lawsuits have broken out all over the digital sector, involving Apple, Microsoft, Google and many others, such a strategy for Yahoo could be dangerous if it fails in its legal effort to take advantage of its 1,000-plus patents, including those related to search and advertising.

Others — including such tech luminaries as LinkedIn’s Reid Hoffman, who co-owns the seminal Six Degrees patent for constructing a networking database and system — hold a number of critical social networking patents, too, so who knows where this thing will go.

Nonetheless, Yahoo has decided to emulate those companies with one of the few valuable assets it might have, waging its little war, right as Facebook is in the midst of its initial public offering period.

Yahoo has done this before, of course, having wrangled with Google until right before it went public in 2004 over search patents from its Overture acquisition. The pair settled 10 days before the Google IPO, with Yahoo getting several million more shares of that stock (which it then, of course, sold too soon).

That certainly could happen here, with Yahoo managing to grab a chunk of Facebook’s pre-IPO stock.

That would mean that Yahoo’s most valuable asset would be those shares, as well as its stake in Asian companies it bought a while back for a bargain and now makes up a bulk of the company’s valuation.

As to Yahoo’s core business — investors consider it almost entirely worthless.

And let’s not forget: Facebook could also sue right back, which it very well might do. Or, perhaps, cut off agreeable ties that have aided Yahoo in recent years.

In other words, in poking Facebook, Yahoo might now learn what it is really like to be de-friended.

As I reported this morning, an activist fund aiming at AOL took a shot today, by putting up its slate of alternate directors.

In a nutshell, Starboard Value does not like the way CEO Tim Armstrong is running the company and thinks it can do better.

My two cents: The New York-based investment firm might have actually named some directors with some more recent media or Internet operating experience.

Several Internet execs approached by Starboard said they declined because they did not want to engage in a hostile action against AOL, even if they might agree with its assessment of the dicey situation for the company.

Instead, it’s investor guys, advisor guys and even an intellectual property guy. (Oh joy, so the plan is patent lawsuits a la Kodak?)

Yes, it is, according to Starboard’s letter to the AOL board.

It read, in part:

“We appreciate the ongoing dialog we have had with management and certain members of the Board over the past two months. However, we are extremely disappointed that our conversations regarding the issues raised in our letter have stalled. Specifically, we are troubled that the Company remains closed-minded to alternative value creation initiatives, and instead appears solely focused on pursuing the status quo.”

AOL fired back with a statement of its own, essentially saying things are just fine and Starboard’s characterization of the company was inaccurate.

Said AOL in a statement:

“We ended 2011 with our best performance as a company in the past five years, with substantial growth in advertising revenue, improvements in legacy revenue streams, and significant cost reductions. Our stock price has acted in kind, appreciating approximately 80% from our 2011 low and 20% year-­‐to-­‐date.”

Starboard declined to agree apparently.

Nothing like a he-said-he said, which follows a similar proxy fight situation at Yahoo!

Here is Starboard’s official press release with board selections, followed by AOL’s full statement:

Starboard Delivers Letter to AOL Board Nominates a Slate of Highly Qualified Candidates for Election at the 2012 Annual Meeting

NEW YORK, Feb. 24, 2012 /PRNewswire via COMTEX/ — Starboard Value LP (together with its affiliates, “Starboard”), one of the largest shareholders of AOL Inc. (“AOL” or the “Company”) AOL -0.95% with current ownership of approximately 5.2% of the outstanding shares, today announced that it has delivered a letter to the Company’s Board of Directors and has nominated a slate of highly qualified candidates for election to the AOL Board at the Company’s 2012 Annual Meeting.

The full text of the letter to the Board follows:

February 24, 2012

AOL Inc.
770 Broadway
New York, NY 10003
Attn: Members of the Board of Directors

To the Board of Directors,

Starboard Value LP, together with its affiliates (“Starboard”), currently owns approximately 5.2% of the outstanding shares of AOL Inc. (“AOL” or “the Company”), making us one of the Company’s largest shareholders. As you know, we have strong views regarding the current state and future direction of AOL, which we articulated in our comprehensive letter to the Board of Directors (the “Board”) on December 21, 2011 (the “December Letter”). We appreciate the ongoing dialog we have had with management and certain members of the Board over the past two months. However, we are extremely disappointed that our conversations regarding the issues raised in our letter have stalled. Specifically, we are troubled that the Company remains closed-minded to alternative value creation initiatives, and instead appears solely focused on pursuing the status quo. AOL is a diverse company with tremendous assets in a variety of different businesses that collectively are being undervalued in the marketplace. We continue to believe that significant opportunities exist to unlock value based on actions within the control of management and the Board.

As one specific example, in addition to the valuable assets highlighted in our December Letter, AOL owns a robust portfolio of extremely valuable and foundational intellectual property that has gone unrecognized and underutilized. This portfolio of more than 800 patents broadly covers internet technologies with focus in areas such as secure data transit and e-commerce, travel navigation and turn-by-turn directions, search-related online advertising, real-time shopping, and shopping wish list, among many others.

Since our initial public involvement in AOL, we have been approached by multiple parties specializing in intellectual property valuation and monetization, some of whom believe that (i) a significant number of large internet-related technology companies may be infringing on these patents, and (ii) AOL’s patent portfolio could produce in excess of $1 billion of licensing income if appropriately harvested and monetized. Unfortunately, several of these parties have expressed severe frustration that AOL has been entirely unresponsive to their proposals regarding ways to take advantage of this underutilized asset. The Company’s inaction is alarming given our understanding that many of the key patents have looming expiration dates over the next several years which could render them worthless if not immediately utilized.

As a result of the dynamics highlighted above, we are increasingly uncomfortable with the direction of the Company and the leadership of the Board. To this end, and as a result of our inability to arrive at a mutually agreeable resolution on the composition of the Board, we have identified the following highly-qualified candidates who have agreed to be nominated to the AOL Board at the 2012 Annual Meeting. We believe these nominees possess a well-balanced mix of skill sets to ensure that the Company evaluates, with an open mind and a keen sense of urgency, all alternative strategies to determine the best path forward to maximize value for all shareholders.

Starboard’s Director Nominees:

Ronald S. Epstein is the Founder and CEO of Epicenter IP Group LLC, a company dedicated to assisting patent owners in obtaining maximum value for their intellectual property. Previously, Mr. Epstein was Vice President and General Counsel of Brocade Communications Systems, Inc., and Director of Licensing at Intel Corporation. Before joining Intel, Mr. Epstein was a member of the Technology Licensing Group at Wilson, Sonsini, Goodrich and Rosati. Mr. Epstein has more than 20 years of experience in developing, optimizing, and transacting intellectual property asset portfolios, and has delivered significant value to patent owners from the sale or licensing of patents in over 150 transactions.

Steven B. Fink is currently a private investor with extensive experience building and managing technology companies. Mr. Fink is the former CEO of Lawrence Investments, LLC, a venture with Larry Ellison that owns and manages all of Mr. Ellison’s non-Oracle investments. Lawrence Investments founded and invested in numerous technology, education, medical, and biotechnology companies. Mr. Fink previously served as Chairman and CEO of Anthony Manufacturing Company, Chairman and Managing Director of Knowledge Universe, and Chairman and CEO of Nextera. Mr. Fink currently serves as Vice Chairman of Heron International, and as a member of the Board of Directors of K-12. Previously, Mr. Fink served as the Chairman of the Board of Leapfrog, Inc., and Spring Group until its sale in 2007.

Dennis A. Miller is a strategic advisor to Lionsgate Entertainment and has been focused primarily on investing at the intersection of media and technology. Previously, he was a General Partner at Spark Capital, a venture fund where he invested in companies including Twitter, CNET, and AdMeld. As a Managing Director for Constellation Ventures, he invested in companies such as Capital IQ. Mr. Miller has also served as Executive Vice President of Lionsgate Entertainment, Executive Vice President of Sony Pictures Entertainment, and Executive Vice President of Turner Network Television.

Jeffrey C. Smith is co-Founder and CEO of Starboard Value, a New York-based investment firm that is one of the largest shareholders of AOL. Mr. Smith has extensive public company board experience. Currently, he serves on the boards of Regis Corp., and SurModics Inc. Previously, he was the Chairman of the Board of Phoenix Technologies Ltd., and a director of Zoran Corporation, Actel Corporation, S1 Corporation, and Kensey Nash Corp. Mr. Smith also served as a member of the Management Committee for Register.com.

James Warner is the principal of Third Floor Enterprises, an advisory firm specializing in digital marketing and media. Previously, he was Executive Vice President of Avenue A | Razorfish, and served on the executive committee of aQuantive, its parent company. He has also served as President of Primedia Magazine Group, President of the CBS Television Network, President of CBS Enterprises, and Vice President at HBO. Mr. Warner served as a director on the board of MediaMind Technologies Inc until its sale to DG FastChannel, Inc. in July 2011.

It is our understanding that the terms of eight directors currently serving on the Board expire at the 2012 Annual Meeting. We would view any attempt by the Company to expand the size of the Board following the receipt of this letter, and given our previous discussions regarding board composition, as a tactic designed to manipulate the composition of the Board with regard to this year’s Annual Meeting. To preserve our rights, and in the event that the Company expands the Board prior to the 2012 Annual Meeting, we are therefore nominating five director candidates. We do not currently intend to seek to replace a majority of the Board. However, we do believe significant change to the composition of the Board is warranted given the qualifications of our nominees and the long-term underperformance of AOL.

We remain prepared to engage in constructive dialog with the Board to reach a mutually agreeable resolution. However, if an agreement is not reached, we are fully prepared to solicit the support of our fellow shareholders to elect a new slate of directors at the 2012 Annual Meeting who are committed to representing the best interests of all AOL shareholders. Starboard has a long history of working constructively with undervalued public companies to improve board effectiveness and enhance shareholder value. We hope that the Board will begin to recognize that our interests are directly aligned with those of all shareholders and that we only want what is best for AOL and its shareholders.

Best Regards,

Jeffrey C. Smith
Managing Member
Starboard Value LP

AOL ISSUES STATEMENT

NEW YORK, NY — February 24, 2012 – AOL Inc. (NYSE: AOL) issued the following statement in response to Starboard Value LP’s Letter to the AOL Board

The recent improved earnings results of AOL Inc. (“AOL” or “the Company”) highlight the significant progress we are making in executing our strategy to improve AOL’s growth trajectory and create meaningful shareholder value. We ended 2011 with our best performance as a company in the past five years, with substantial growth in advertising revenue, improvements in legacy revenue streams, and significant cost reductions. Our stock price has acted in kind, appreciating approximately 80% from our 2011 low and 20% year-­‐to-­‐date.

AOL’s Board of Directors and management team consistently review the strategy and performance of the Company and have taken meaningful actions to enhance shareholder return including the divestiture of non-core assets, significant cost reduction, a meaningful buyback of Company equity, and the implementation of an accountable and performance-based culture to operate against our clear strategy.

AOL has held several meetings with Starboard Value LP to address their questions. AOL communicated our continued intent to simplify AOL’s business and our efforts to accelerate shareholder value creation. AOL has offered Starboard Value LP an opportunity to help shape the Company’s Board of Directors composition and size. Unfortunately, Starboard Value LP has a singularly focused agenda and rejected this productive path to address their stated concerns and drive increased shareholder value.

Our Board of Directors and management team remain firmly committed to creating value for all shareholders. We have a valuable patent portfolio and several months ago, prior to Starboard’s first letter, the AOL Board of Directors authorized the start of a process, and hired advisors, to realize the value of these non-strategic assets. AOL has a clear plan to provide our consumers and customers with exceptional value, which we believe will lead to the creation of shareholder value. We will continue to aggressively execute and innovate on our strategy as we continue the turnaround of AOL.

Apple late Tuesday asked a U.S. Bankruptcy Court in New York for permission to sue the photography pioneer for allegedly infringing patents related to technologies used in printers, digital cameras and digital picture frames. If the court gives its approval, Apple intends to file a complaint against Kodak at the International Trade Commission, and a suit in U.S. District Court in Manhattan, as well. Its aim: An order blocking Kodak’s infringement and an ITC bar on the importation of certain Kodak devices.

An unfortunate turn of events for Kodak, which really seems to have brought all this upon itself. Back in 2010, Kodak sued Apple, claiming the iPhone infringes a Kodak patent related to previewing images. But Apple argues that it is the true owner of the patents, and that Kodak pilfered some of its IP when the two companies were exploring how best to commercialize Apple’s digital camera technologies back in the early ’90s.

So, as I said, ugly news for the beleagured Kodak, which is clearly in a poor financial position to defend itself against such claims.

In 2007, after its CEO, Antonio Perez, appeared on stage at the fourth D: All Things Digital conference, I was invited to visit the HQ of Kodak in Rochester, N.Y., to see up close the transition to a digital imaging company he was attempting.

At the time, I wrote:

“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.”

Yesterday, Kodak gave up that effort and filed for Chapter 11 reorganization. Where it will go from here is anybody’s guess.

While the iconic company has tried to leverage its patent portfolio, suing Apple, HTC and Samsung, it needs more than just that as it seeks to remake its ailing business.

Here are the two videos I did with its execs of the ideas back then that obviously did not work out, as well as one of the classic “The Times of Your Life” commercials (I dare you not to tear up watching it, a potent memory of the emotional power Kodak once had over consumers):

]]> http://allthingsd.com/20120119/the-times-of-its-troubled-life-a-2007-visit-to-kodak-video/feed/ 0 http://allthingsd.com/20120118/not-a-kodak-moment-as-camera-maker-files-for-bankruptcy/ http://allthingsd.com/20120118/not-a-kodak-moment-as-camera-maker-files-for-bankruptcy/#comments Thu, 19 Jan 2012 05:29:53 +0000 Ina Fried http://allthingsd.com/?p=165172 Struggling camera maker Kodak said on Wednesday night that it has filed for Chapter 11 reorganization.

The move, which had been expected, follows years of struggle by the film giant to transition to a digital imaging company. In recent months, the company has sought to capitalize on its patents and, in recent days, has sued Apple, HTC and Samsung.

Kodak said it hopes to emerge from bankruptcy in 2013 and intends to conduct business during the restructuring using $950 million in financing from Citigroup. As part of the move, the company said it has named Dominic DiNapoli, vice chairman of FTI Consulting, as its Chief Restructuring Officer.

Here’s the full text of the company’s press release:

ROCHESTER, N.Y.–(BUSINESS WIRE)– Eastman Kodak Company (“Kodak” or the “Company”) announced today that it and its U.S. subsidiaries filed voluntary petitions for chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines. The Company has made pioneering investments in digital and materials deposition technologies in recent years, generating approximately 75% of its revenue from digital businesses in 2011.

Kodak has obtained a fully-committed, $950 million debtor-in-possession credit facility with an 18-month maturity from Citigroup to enhance liquidity and working capital. The credit facility is subject to Court approval and other conditions precedent. The Company believes that it has sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.

Kodak expects to pay employee wages and benefits and continue customer programs. Subsidiaries outside of the U.S. are not subject to proceedings and will honor all obligations to suppliers, whenever incurred. Kodak and its U.S. subsidiaries will honor all post-petition obligations to suppliers in the ordinary course.

“Kodak is taking a significant step toward enabling our enterprise to complete its transformation,” said Antonio M. Perez, Chairman and Chief Executive Officer. “At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003. Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core IP assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company.”

“After considering the advantages of chapter 11 at this time, the Board of Directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak,” Mr. Perez continued. “Our goal is to maximize value for stakeholders, including our employees, retirees, creditors, and pension trustees. We are also committed to working with our valued customers.

“Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses.”

Mr. Perez concluded, “The Board of Directors, the senior management team and I would like to underscore our appreciation for the hard work and loyalty of our employees. Kodak exemplifies a culture of collaboration and innovation. Our employees embody that culture and are essential to our future success.”
Kodak has taken this step after preliminary discussions with key constituencies and intends to work toward a consensual reorganization in the best interests of its stakeholders. Kodak expects to complete its U.S.-based restructuring during 2013.

The Company and its Board of Directors are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. In addition, Dominic DiNapoli, Vice Chairman of FTI Consulting, will serve as Chief Restructuring Officer to support the management team as to restructuring matters during the chapter 11 case.
More information about Kodak’s Chapter 11 filing is available on the Internet at www.kodaktransforms.com. Information for suppliers and vendors is available at (800) 544-7009 or (585) 724-6100.

Kodak will be filing monthly operating reports with the Bankruptcy Court and also plans to post these monthly operating reports on the Investor Relations section of Kodak.com. The Company will continue to file quarterly and annual reports with the Securities and Exchange Commission, which will also be available in the Investor Relations section of Kodak.com.

]]> http://allthingsd.com/20120118/not-a-kodak-moment-as-camera-maker-files-for-bankruptcy/feed/ 0 http://allthingsd.com/20120118/kodak-considers-restructuring-chief-sues-samsung/ http://allthingsd.com/20120118/kodak-considers-restructuring-chief-sues-samsung/#comments Wed, 18 Jan 2012 22:31:03 +0000 Dana Mattioli and Mike Spector http://allthingsd.com/?p=165016 Eastman Kodak Co. is preparing to appoint a chief restructuring officer, a move that could help the company secure financing needed to stay afloat during bankruptcy proceedings, people familiar with the matter said.

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

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]]> http://allthingsd.com/20120118/kodak-considers-restructuring-chief-sues-samsung/feed/ 0 http://allthingsd.com/20120110/beleaguered-kodak-tries-patent-suit-strategy-on-apple-htc/ http://allthingsd.com/20120110/beleaguered-kodak-tries-patent-suit-strategy-on-apple-htc/#comments Wed, 11 Jan 2012 00:25:52 +0000 John Paczkowski http://allthingsd.com/?p=162588 Looks like Kodak has settled on a novel way of drumming up interest in those digital-imaging patents it’s hoping to sell off to avoid bankruptcy: Assert them against some high-profile smartphone makers.

Late Tuesday, the company filed suit against Apple and HTC claiming they’ve infringed upon a handful of patents on technologies for transmitting digital images from cameras and other devices.

Kodak’s complaint covers Apple’s iPad 2, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S, and iPod touch, and a number of HTC tablets and phones — the Flyer, EVO View 4G, Vivid, Hero S, etc. And it seeks a proscription against further infringement as well as damages. But what Kodak’s really looking for here are the royalties.

As Tim Lynch, Kodak’s Chief IP officer, notes in a statement announcing the suit, “We remain open to negotiating a fair and amicable agreement with these companies, which has always been our preference and our practice with other licensees.”

News of the suits comes amid reports that Kodak is contemplating Chapter 11 bankruptcy protection.

]]> http://allthingsd.com/20120110/beleaguered-kodak-tries-patent-suit-strategy-on-apple-htc/feed/ 0 http://allthingsd.com/20120104/kodak-preparing-for-chapter-11-filing/ http://allthingsd.com/20120104/kodak-preparing-for-chapter-11-filing/#comments Wed, 04 Jan 2012 19:24:48 +0000 Mike Spector and Dana Mattioli http://allthingsd.com/?p=160037 Eastman Kodak Co. is preparing for a Chapter 11 bankruptcy-protection filing in the coming weeks should efforts to sell a trove of digital patents fall through, people familiar with the matter said.

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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]]> http://allthingsd.com/20120104/kodak-preparing-for-chapter-11-filing/feed/ 0 http://allthingsd.com/20111229/in-memoriam-tech-products-we-lost-too-soon/ http://allthingsd.com/20111229/in-memoriam-tech-products-we-lost-too-soon/#comments Thu, 29 Dec 2011 17:30:54 +0000 Lauren Goode http://allthingsd.com/?p=157904 The year is nearing its end, and while 2012 is expected to be increasingly cloud-y, voice-controlled and filled with more mobile madness, this seems like an appropriate moment to look back and remember those that have gone to the tech-product graveyard in 2011.

The Flip Camera
San Jose, Calif. — The Cisco Flip, a beloved handheld video recorder, was killed on April 12, 2011. Its untimely death was a result of the realignment of Cisco’s consumer electronics business.

Born in May 2006 as the Pure Digital Point & Shoot, the pocket camera went through many evolutions in its lifetime, later becoming the Flip Ultra and spawning the Flip Mino and Flip MinoHD. It found a new home in 2009, when it was acquired by Cisco for $590 million. The Flip was known as the life of the party at birthday and wedding celebrations, and will be remembered for its simplistic design and pop-out USB arm. “People literally flipped for the Flip when it first came out,” a friend of its parents, Pure Digital, said. It is survived by a number of boiled-down point-and-shoots and countless smartphone cameras, as well as video-sharing apps with annoyingly cute names like “Viddy.”

Its distant cousin, the Kodak Zi8, also went missing from the Kodak store earlier this year.

Guitar Hero
Santa Monica, Calif. — For Guitar Hero, Feb. 9, 2011, was the day the music died. The videogame franchise was killed when Activision announced during its fourth-quarter earnings call that it was shuttering the business unit dedicated to Guitar Hero.

The popular game was born in 2005 to Red Octane and Harmonix, and was distributed by Activision. Later iterations of Guitar Hero, which were developed by Neversoft, had band-specific titles and also incorporated more instrumental props, so fans could play drums or sing as well as play guitar.

But Guitar Hero sales fell off, and the game was eventually overshadowed by its record-breaking Activision siblings, the Call of Duty and World of Warcraft series. Revenues of Guitar Hero fell from $1.7 billion in 2008 to about $300 million in 2010.

Guitar Hero will be remembered for its love of music, with Aerosmith, Metallica and Van Halen among its favorite artists, and for creating living-room rock arenas for millions of users.

Guitar Hero is survived by Rock Band, Rocksmith, Rock Revolution and likely many other console and mobile games starting with “Rock” that we’re not aware of or haven’t been invented yet.

HP TouchPad
Palo Alto, Calif. — That flame which doth burn brightest often burns out quickly, or something like that.

The HP TouchPad was effectively killed on Aug. 18, 2011, at the young age of just 49 (that’s days). Prior to its demise, the TouchPad was praised for its bright 9.7-inch display, Beats audio and mostly for the fact that it ran HP’s intuitive webOS mobile operating system, though the tablet ultimately saw disappointing sales during its short life.

Hewlett-Packard, its maker, said webOS devices had not gained enough traction in the marketplace with consumers, and couldn’t justify continuing to produce hardware like the TouchPad around it.

HP’s new CEO, Meg Whitman, said later on, “I think we’ve got to walk before we run here.” The TouchPad is survived by a newly open source webOS system and a cult of rabid fans, as evidenced by its post-mortem fire sales. It joins the Microsoft Kin phone in a special Afterlife for Tech Products Less Than 50 Days Old, while its operating system remains in a state of purgatory.

Dell Streak Tablets and Mini 10 Netbook
Round Rock, Texas — The streak was not a long one.

Dell’s Streak 5 tablet, which was originally demoed at D8 in 2010, disappeared from store shelves in mid-August of this year. Dell hardly had time to recover from the loss before its sibling, the Dell Streak 7, was also discontinued.

Shortly after the loss of the Streak tablet, tragedy again struck the Dell family, when Dell confirmed it would no longer make consumer netbooks, feeling the pressure of tablets as well as an emerging shift toward thin, light “ultrabooks” in the laptop category. The Dell Mini 10 was known for being small, as netbooks are, and for being that laptop you knew you could always fit on the seatback tray on an airplane.

Apple MobileMe
Cupertino, Calif. — June 6, 2011, was Steve Jobs’s last appearance at an Apple Worldwide Developers Conference. It was also the day MobileMe effectively went away, with Jobs saying the $99 dollar service wasn’t Apple’s “finest hour.”

MobileMe launched at WWDC in July of 2008, and was meant to sync calendars, emails, bookmarks and photo galleries. For individual accounts, it came with 20 gigabytes of online storage and 200GB of monthly data transfer.

While great in theory, our friend MobileMe was not without flaws. In fact, AllThingsD’s Walt Mossberg said, in his review of the service, that MobileMe was “far too flawed to be reliable.”

Apple’s Internet-based sync services since 2000 have evolved, but have never truly gone away: Like an actual ghost, we know they’re there, and we see glimpses of how they work, but they still elude many people. MobileMe, in its earliest form, was iTools, and later on, the subscription service .Mac. Even now, we’re not entirely sure whether MobileMe was killed or simply reincarnated as something new — in this case, iCloud.

Adobe Flash on Mobile
San Jose, Calif. — This is the way mobile Flash ends: Not with a bang, but a whimper.

On Nov. 9, Adobe said it would no longer be developing Flash, its platform for interactive and rich media content, for mobile devices.

Macromedia Flash was born in 1997, the spawn of FutureWave’s FutureSplash Animator. Macromedia was acquired by Adobe Systems in 2005, thus becoming Adobe Flash.
As smartphone and tablet wars heated up in recent years, Flash support became one of the features that iPad competitors — mainly Google Android devices — touted to set themselves apart from Apple’s mobile products.

The tech world has contemplated what this could all mean for the future of Flash. As AllThingsD’s Ina Fried wrote, Flash’s death on mobile was seen as a vindication for the late Steve Jobs, who took a controversial stand by not supporting Flash on Apple’s mobile products. Could Jobs once again have seen the future? Flash is not a completely dead standard yet, but with developers increasingly adopting HTML5 as the new standard for Web language, it’s unclear what exactly will become of Flash.

Google Buzz
Mountain View, Calif. — A standard housecleaning session turned fatal this past October when Google pulled the plug on its social networking effort. Google Buzz, the predecessor to Google+, aimed to create a social network through Gmail.

Social and gregarious by nature, Google Buzz was born in February of 2010. Its early life was filled with strife, as users struggled to grasp the real-time social interactions that were occurring within email chains, and real privacy concerns emerged.

Despite its short life span, the memory of Google Buzz surely remains, as the search giant eventually had to settle with the FTC over privacy violations and is now committed to 20 years of privacy audits.

Memories, indeed.

Google Buzz is survived by Google+, and follows Friendster and Myspace to the social graveyard, although technically those still exist.

Readers, what do you think was the greatest tech product loss in 2011?

]]> http://allthingsd.com/20111229/in-memoriam-tech-products-we-lost-too-soon/feed/ 20 http://allthingsd.com/20111117/kodak-seeks-to-sell-online-photo-sharing-business-kodak-gallery/ http://allthingsd.com/20111117/kodak-seeks-to-sell-online-photo-sharing-business-kodak-gallery/#comments Thu, 17 Nov 2011 23:13:31 +0000 Dana Mattioli http://allthingsd.com/?p=145453 In a bid to raise money to fund its turnaround, Eastman Kodak Co. is trying to sell its online photo-sharing business, Kodak Gallery, people familiar with the matter said.

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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]]> http://allthingsd.com/20111117/kodak-seeks-to-sell-online-photo-sharing-business-kodak-gallery/feed/ 0 http://allthingsd.com/20111103/kodak-warns-it-cant-continue-operations-without-patent-proceeds-or-new-debt/ http://allthingsd.com/20111103/kodak-warns-it-cant-continue-operations-without-patent-proceeds-or-new-debt/#comments Thu, 03 Nov 2011 17:30:30 +0000 Dana Mattioli http://allthingsd.com/?p=140186 Eastman Kodak Co. warned Thursday that it will have trouble staying in business if it can’t squeeze more money out of its patent portfolio or raise new funds by selling debt.

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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]]> http://allthingsd.com/20111103/kodak-warns-it-cant-continue-operations-without-patent-proceeds-or-new-debt/feed/ 0 http://allthingsd.com/20111017/kodak-licenses-patents-to-imax/ http://allthingsd.com/20111017/kodak-licenses-patents-to-imax/#comments Mon, 17 Oct 2011 15:48:34 +0000 Dana Mattioli http://allthingsd.com/?p=132912 Eastman Kodak Co. has licensed a portion of its patents to big-screen movie specialist Imax Corp., in a deal that will provide it with some extra cash while it works to complete a large patent sale that is crucial to its turnaround.

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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]]> http://allthingsd.com/20111017/kodak-licenses-patents-to-imax/feed/ 0 http://allthingsd.com/20110930/kodak-hires-restructuring-lawyers/ http://allthingsd.com/20110930/kodak-hires-restructuring-lawyers/#comments Fri, 30 Sep 2011 20:05:39 +0000 Mike Spector and Dana Mattioli http://allthingsd.com/?p=127040 Eastman Kodak Co. has hired law firm Jones Day for restructuring advice as it faces growing concerns from investors over its turnaround prospects, people familiar with the matter said.

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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]]> http://allthingsd.com/20110930/kodak-hires-restructuring-lawyers/feed/ 0 http://allthingsd.com/20110831/potential-buyers-sizing-up-kodak-patents/ http://allthingsd.com/20110831/potential-buyers-sizing-up-kodak-patents/#comments Wed, 31 Aug 2011 14:47:50 +0000 John Paczkowski http://allthingsd.com/?p=115624 Are Kodak’s digital imaging patents truly worth more than the entirety of the company itself? We may soon find out.

Kodak CEO Antonio Perez says interest in that portion of its patent portfolio has been running high since the company began shopping it around earlier this summer, and already a number of potential buyers are evaluating it. Reportedly among them: Apple, Google, Samsung and Microsoft.

“At the moment we announced [the sale], the phone started to ring,” he told Bloomberg. “… This is the right time. The conversations are going. We are hoping quickly to get to a good conclusion.”

Right time, indeed. Given the current bull market for patents, the 1,100 or so Kodak is shopping around could fetch as much as $3 billion, according to IP investment bank MDB Capital Group. That’s more than five times the struggling company’s market capitalization. “There are some pretty crucial patents here, and there are a lot of people who should be very interested in buying these,” said MDB Capital CEO Chris Marlett. “The auction for the sale of these patents is going to underscore that there’s a big disconnect between the value of the IP and the value of the stock.”

]]> http://allthingsd.com/20110831/potential-buyers-sizing-up-kodak-patents/feed/ 0 http://allthingsd.com/20110817/kodak-launches-sale-of-patents/ http://allthingsd.com/20110817/kodak-launches-sale-of-patents/#comments Thu, 18 Aug 2011 00:15:53 +0000 Dana Mattioli http://allthingsd.com/?p=111386 Eastman Kodak Co. has kicked off its patent sale, as the beleaguered imaging company seeks to ride the bull market for patents and capitalize on its intellectual property in the booming market for tablet computers.

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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]]> http://allthingsd.com/20110817/kodak-launches-sale-of-patents/feed/ 0 http://allthingsd.com/20110804/itc-judge-kodak-apple-patent-spat-retires/ http://allthingsd.com/20110804/itc-judge-kodak-apple-patent-spat-retires/#comments Thu, 04 Aug 2011 15:01:14 +0000 John Paczkowski http://allthingsd.com/?p=106338 The patent infringement case Kodak brought against Apple and Research In Motion with the International Trade Commission may drag on longer than expected, now that the judge presiding over it has retired. ITC Chief Administrative Law Judge Paul Luckern, who ruled in January that Apple’s and RIM’s smartphones don’t infringe on Kodak’s image-preview patents, stepped down on Wednesday, leaving that case to be reassigned to other judges. Unfortunate for Kodak and everyone else involved, as Luckern was expected to issue a decision in the case by the end of this month.

]]> http://allthingsd.com/20110804/itc-judge-kodak-apple-patent-spat-retires/feed/ 0 http://allthingsd.com/20110719/apple-loses-itc-case-against-kodak/ http://allthingsd.com/20110719/apple-loses-itc-case-against-kodak/#comments Tue, 19 Jul 2011 15:29:58 +0000 John Paczkowski http://allthingsd.com/?p=99778 Looks like Kodak CEO Antonio Perez has a shot at the $1 billion in royalties he wants from Apple and Research In Motion after all. Late Monday, the U.S. International Trade Commission ruled that Kodak did not infringe on Apple’s digital photography patents, upholding an ITC judge’s decision from May.

Lousy news for Apple, particularly since the ITC is still reviewing Kodak’s claims that two of its patents generally covering image preview and processing have been used illegitimately in the iPhone. In June, the Commission said it had decided to “affirm in part, reverse in part, and remand in part,” a ruling of an administrative law judge who found Apple (and Research In Motion, as well), hadn’t infringed Kodak’s patents.

A decision in that case is expected on Aug. 30 and if it goes Kodak’s way could force Apple to pay the imaging company royalties. But as the commenter below notes, it might be cheaper for Cupertino to simply acquire Kodak.

]]> http://allthingsd.com/20110719/apple-loses-itc-case-against-kodak/feed/ 0 http://allthingsd.com/20110630/kodak-patent-fight-with-apple-rim-remains-unresolved/ http://allthingsd.com/20110630/kodak-patent-fight-with-apple-rim-remains-unresolved/#comments Thu, 30 Jun 2011 22:29:43 +0000 John Paczkowski http://allthingsd.com/?p=90493 Looks like Kodak CEO Antonio Perez will have to wait a while longer before he knows if he’s in for a big patent infringement payday.

The U.S. International Trade Commission issued a split ruling today on Kodak’s suit charging that Apple’s iPhone and Research In Motion’s BlackBerry violate its patent on an image-preview function in smartphones. The commission did some upholding, some modifying and some clarifying (mostly not helpful to Kodak’s cause) and ultimately sent the preliminary findings back to the administrative law judge for further review. The commission’s new target date is Aug. 30 — unless the judge sees the need for more time.

Kodak looked for the brightest spot it could find in the news and expressed continued confidence. After-hours investors, not so much.

]]> http://allthingsd.com/20110630/kodak-patent-fight-with-apple-rim-remains-unresolved/feed/ 0 http://allthingsd.com/20110517/mining-facebook-to-make-a-real-photo-album/ http://allthingsd.com/20110517/mining-facebook-to-make-a-real-photo-album/#comments Tue, 17 May 2011 22:34:52 +0000 Katherine Boehret http://solution.allthingsd.com/?p=1797 As kids, we’re taught to share and share alike, and nowhere is this more clear than on Facebook, where some 600 million users share private details about their lives—and a lot of that sharing involves photos. People who once shared digital albums via photo-sharing websites now simply post those on Facebook for friends to see.

This week, I tested an effort by photo-sharing sites to win back users’ attention: by importing photos from none other than Facebook, itself. With your permission, these sites access your Facebook page’s photos, as well as the pages of any friends who share their Facebook photos with you, and use these images to make photo albums—for online or for the coffee table.

I tested Shutterfly Inc.’s new Custom Path for making photo books, which produced a handsome book but didn’t link as smoothly as it should with Facebook. I also tried a beautiful new website called ZangZing that grabs and organizes images from a variety of social networks to create digital albums.

Shutterfly’s Custom Path lets users make pages their own by adding stickers and images.

There are ups and downs to using photos from Facebook in this manner. The major advantage is you can access several people’s photos rather than relying on just your own photos to create an album or project. This means if you forgot a camera at your parents’ 40th anniversary party, you may be able to use a friend’s photos to create a digital album or a photo book. And because photos shared on Facebook are often captured using smartphones and shared nowhere else but Facebook, they are then unique memories of the event.

On the negative side, Facebook downsizes photos before storing them on its website, so the quality isn’t that of the original digital file. This factors in when creating photo books. I planned to make a large photo book but had to choose a smaller one because the photos were too low resolution to be used as large, full-bleed images spread across a page; images from Facebook couldn’t be larger than 4-by-6-inches. If the photos imported from Facebook were captured on smartphones, the quality is already lower than that of a digital camera, though smartphone-camera technology is improving steadily.

I checked in with Google’s Picasa, Kodak Gallery, and Yahoo’s Flickr services to see if they were considering the idea of importing photos from Facebook. Each of these photo-sharing services already shares its albums out to Facebook—table stakes in the social-networking world. Of the three, only Kodak disclosed imminent plans to import photos from Facebook to its Kodak Gallery website; it will start this in late June. Kodak already lets people use in-store kiosks, like those in Target stores, to import images to albums from Facebook.

The end result is an album book.

Shutterfly’s Custom Path photo-book-making process automatically places photos onto book pages while allowing the book’s creator to tweak and adjust the book to a high degree. The books come in five options ranging from $13 for a 5-by-5-inch softcover book to $55 for a 12-by-12-inch hardcover book. Prices are currently marked at 20 percent off; adding pages will increase the price. I chose a 20-page, 8-by-8-inch book with a padded photo cover that cost $28 by the time I was finished with it (prices for this size book start at $20).

I skimmed through nine categories of book styles and several options within each category before deciding to create a photo-filled wedding guest book. Photos for the book can be added from one’s computer, a Shutterfly account, other people’s shared Shutterfly photos or Facebook. I chose photos from all of these sources and they dropped into a digital bin, showing me what I already had in the book so as not to grab the same photo twice from two sources.

I used Facebook Connect, a one-click option to enable my Shutterfly account to access my Facebook content and that of my friends, but it took me several tries to see the photos from Facebook. Shutterfly couldn’t replicate my problem and a spokeswoman thought it might be an issue with Facebook. It was fixed later in the day, but photos from Facebook still seemed sluggish to display on the screen.

Custom Path is easy to use but not easy enough. Text boxes are difficult to maneuver, and while some items can be taken away when you press Delete, others must be dragged off the screen. But once I figured out how to customize images and added stickers on pages, I could really make the page my own—not just another cookie-cutter pattern from Shutterfly.

ZangZing is a sharing site with a clean and easy-to-use user interface. It’s focused on the idea of creating digital albums by getting photos from all sorts of sources, including Facebook, Flickr, Instagram, Kodak Gallery, Picasa Web, Shutterfly, Photobucket, SmugMug or your own PC. I created albums with photos from five sources, and I enjoyed watching the elegant animations that illustrated the step of adding an image to an album. One click will add all photos from an album, or individual ones can be selected, and the images appear in a tray at the bottom of the screen. The site walks users through six steps to build an album, making the procedure feel transparent and uncomplicated.

The simplest part of using ZangZing was setting an album’s privacy permissions. I selected from Public, Hidden (anyone who knows the link to the album can see it), or Password. Too often, the process of sharing a digital photo album feels nerve-wracking because it’s hard to know if it will be shared with hundreds of people or too difficult for anyone to view. ZangZing’s emphasis on clarity shines here and throughout this sharing site.

Thanks to Shutterfly, ZangZing and other sites, creating a book or album to share doesn’t need to be restricted to your own photos. Rather than putting everything into your social networks, these sites let you take something out.

Write to Katherine Boehret at katherine.boehret@wsj.com

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