Apple Can't Pursue Kodak Patent Claims, Bankruptcy Judge Rules

By Nick Brown

NEW YORK (Reuters) - Apple Inc, the biggest company by market value, was told it cannot now pursue an ongoing patent infringement lawsuit against Eastman Kodak Co, and was ordered not to file similar new litigation against the bankrupt photography company.

U.S. Bankruptcy Judge Allan Gropper, who oversees Kodak's Chapter 11 case, said at a Thursday hearing it would be an "inappropriate way forward" to allow Apple to continue pursuing litigation over a Kodak patent that lets consumers preview digital photographs on LCD screens.

Apple in February had asked the court for permission to lift a stay putting that case, which has been pending in a federal court in Kodak's hometown of Rochester, New York, on hold. Apple had hoped to move the case to Manhattan for a jury trial.

But while Gropper denied that request, he agreed that the case needs to be resolved sooner rather than later, and in a way that does not interfere with Kodak's ongoing plans to sell its patent portfolio and emerge from bankruptcy.

"I would request that the parties report to me on their efforts to come up with a procedure that truly works," he said.

Kodak had accused Apple of trying to slow the patent sale process, which it must undertake by the end of June under the terms of a $950 million loan keeping it afloat through bankruptcy.

Any new patent litigation by Apple would also be improper under a federal rule designed to shield bankrupt entities from litigation that might constitute "creditor harassment," Gropper said.

Apple, which had sought the right to file new litigation against Kodak, argued that patent litigation has been a major part of Kodak's strategy.

"I'm sure they have no problem moving ahead with the lawsuits where they're the complainants," Apple lawyer David Seligman told the judge.

The bankruptcy case is In re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.

(Reporting By Nick Brown; Editing by Gerald E. McCormick)

Comments

[genamason]

02:21 AM on 03/19/2012

The case of Kodak demonstrates the increasing importance of patent enforcement. Though some in the anti-IP crowd seem to feel as if any form of patent litigation is evil, it's worth noting that a major institution like Kodak splintered due in part to its failure to timely and effectively enforce its IP rights.
http://www.aminn.org/patent-legislation

[Jared Jentzsch]

09:17 PM on 03/08/2012

Patents are stupid.

[rikilii]

09:34 PM on 03/08/2012

Yes, it would be much better if, after a company spends 10s or 100s of millions of dollars developing a new product, they're competitors can copy it for free and and undercut them and drive them out of business.

[Jared Jentzsch]

10:09 PM on 03/08/2012

Just like Apple iPad did to the Pear meTouch? Or what are you talking about? An idea belongs to no one. It belongs to everyone. If I share with you, you should share with me. If we were to share, then we would all benefit. If Kodak and Apple were to work together, rather than fight, what would happen?

[brux]

08:16 PM on 03/08/2012

This is basically the judge making a determination that Kodak's debts to its creditors are somehow more important than Apple's right to what might be illegal profits on the part of Kodak … without looking at the facts. Some judge, if he cannot make a real legal judgement he should declare the case void and let Apple go to a higher court if Apple thinks it can win.

[rikilii]

08:33 PM on 03/08/2012

Actually, it's a determination by our bankruptcy laws.  Secured creditors get priority over unsecured creditors, and potential liabilities for IP infringement are at the bottom of the list of unsecured debts.

[brux]

08:39 PM on 03/08/2012

So if I rob a bank to pay my bills, my creditors get preference over that money instead of the bank? I think you are spinning this like a beach ball.

[amajamus]

12:43 AM on 03/09/2012

My cousin filed for bankruptcy and the same thing happened . . . the judge said no action can be taken against him while his case was going through court. We all know how "special" apple is . . . but the law stands for individuals as it does for corps.

[spmalan]

07:56 PM on 03/08/2012

Everybody posting here has no idea what they are talking about. Apple came out with the first digital camera , working with Kodak. Apple says Kodak ran off and patented its IP. Now, let the courts and lawyers with knowledge in this field try to get to the truth. Foxconn makes electronics for almost everybody, including Samsung. Apple has done more to raise the wages than any other foreign company in China. Thousands of Chinese line up for a chance to work there. They do tis because of better pay & better working conditions than other plants. And, No, Apple does not own China or Foxconn, or set any of the laws for that country. It's as if all the commenters are from Redmond, Wa. and have orders to post here from Steve Balmer.

[brux]

08:17 PM on 03/08/2012

Nice post, but …

> Apple has done more to raise the wages than any other foreign company in China.

Not doing much for wages here, so that does not impress me much. And I only have one Windows machine left, 4 Macs, iPhone & iPad, so get real.

[amajamus]

12:43 AM on 03/09/2012

This is about bankruptcy laws . . . first and fore most.

[KarateKid]

06:51 PM on 03/08/2012

All of you who are typing comments, um, where were your keyboards made?

[jokamachi]

06:01 PM on 03/08/2012

Try bringing your jobs back to the States instead, Apple.

[DeepThought24]

06:00 PM on 03/08/2012

Is Apple the new Microsoft?

[grant06]

06:29 PM on 03/08/2012

I don't recall Microsoft using slave labor and driving its employees to suicide.

[KarateKid]

06:50 PM on 03/08/2012

I guess you didn't read about Samsung having the same problem at their factory, too, huh?

[brux]

08:22 PM on 03/08/2012

> I don't recall Microsoft using slave labor and driving its employees to suicide.

No … true …. just it's customers !! ;-)

[amajamus]

12:45 AM on 03/09/2012

They wish they were half as successful and innovating as MS.

[DeepThought24]

07:40 AM on 03/09/2012

I assume that's a joke?

[Nerdiac]

05:45 PM on 03/08/2012

Apple is the rich kid bully on the playground. Ugh.

[LeftFoLyfe]

06:53 PM on 03/08/2012

'MERCA!

[max pain]

05:40 PM on 03/08/2012

You can be proud that a good chunk of your money was made on the backs of slave labor

[mlowejazz]

07:07 PM on 03/08/2012

Let's be technically correct. It's cheap labor. If Yao San gets fed up and leaves, I doubt the Chinese gov't will hunt him down with bloodhounds to bring him back to his job pushing in memory chips. He'll just be replaced with one of the other 12 million newly arrived workers bussed in from the country to work in the plants.

[brux]

08:24 PM on 03/08/2012

whether or not it is slavery in China or exactly what it is the bottom line is that jobs are lost in America and wages go down, also China gets our technology and money and the American people get to pay for it all.

[max pain]

05:40 PM on 03/08/2012

No doubt. Greed pays big time.

[max pain]

05:40 PM on 03/08/2012

I won't be surprised when Apple files patent claim against mother nature for making Apple. And we have to shell out a dollar every time we eat an apple.

[Nerdiac]

05:46 PM on 03/08/2012

and apples would be renamed iCore

[Lonnie DeVorak]

06:05 PM on 03/08/2012

Funny but probably very true.

[gclum]

05:39 PM on 03/08/2012

This story would never make HPO if it were any other company. I'm beginning to think HPO has something against Apple. Any idea why? Seems to me that Apple is a successful American company that is both profitable and yes innovative. Something more of us aught to be.

Yes, slave labor is bad and needs to be pointed out to Apple, but name one technology hardware company that makes anything in America these days. I would be happpy if all these jobs could be moved to the US but it is still an American institution.

[Nerdiac]

05:47 PM on 03/08/2012

You're missing the whole point of why people dislike apple. The low wages and deathly work conditions aren't even half of it. Maybe you "aught" to do some more research instead of making excuses for evil.

[gclum]

06:04 PM on 03/08/2012

Thanks, I've done my homework on this and there is some troubling things that should be addressed. And I understand if people dont like Apple for whatever reason. But Evil? Seriously? Its an iPad, or a Cell Phone, or a computer. What is Evil about Apple? And thanks for the dismissive tone to your post. Really helps make your point.

[oilfield]

07:07 PM on 03/08/2012

maybe you could cite examples...

[berrycuda]

06:07 PM on 03/08/2012

If by "innovative" you mean steal and buy ideas, then yes Apple is succesful.

For the price they charge for thier junk, EVERYTHING they build should already be made in America.

Apple is fast becoming the most hated company in America. They better wake up over there.

[gclum]

06:11 PM on 03/08/2012

Maybe but they are also the most successful American company right now. Their "junk" is changing the world.

[jetscan]

06:55 PM on 03/08/2012

The list of the crooks so far:
Microsoft - check
AIG - check
BoA - check
Citigroup - check
Freddie & Fannie - check
Wall Mart - check
Ralph Lauren - check
Tommy Hilfiger - check
Dell - check
Apple - check
Google - check
Facebook - check
Other electronic "manufacturers" - check
Kitchenware manufacturers** - check
**You will be dumbfounded when you find out about the huge margins made on these items. 500 - 1500 % is not uncommon, but nobody cares.

You see, it's not hard to come up with a list. The American people have a short span of attention. If it's not Apple, then it's the banks, Facebook or Google.

One more thing: If you think that Apple stuff is "junk", then don't buy it. It seems that you want to have "an Apple", but don't have the $ to pay for it. If you can't afford it, buy something else. I don't see you or any other Apple basher get agitated at BMW or Mercedes because you can't afford one while driving your crappy car....

[themiddleistheproblem]

05:07 PM on 03/08/2012

APPLE suing our way to the top.

[Jme Saunders]

05:39 PM on 03/08/2012

Nothing to do with sales then.

[Nerdiac]

05:48 PM on 03/08/2012

It's never had anything to do with sales, only image. Luckily hipsters and fanboys don't total more than the rest of the tech population.

[themiddleistheproblem]

07:29 AM on 03/09/2012

They are suing everyone and when there is no case they refer it to a shadow company to tie things up in litigation for years. So, yes they are suing to stay on top. Anyway, they have topped out except for those silly enough to wait in line for the next ipad which is pretty much the same as the last one. They wouldn't be where they are without suing everyone, that's just a fact.

[cchristi42]

05:07 PM on 03/08/2012

Normally I am not against patent law suits, as they are a necessity to protect your IP, but in this case it really comes off as kicking someone while there down.

[CianSloan]

06:19 PM on 03/08/2012

To make certain they never return as a competitor or so they hold their price down and buy off all of Kodak's patents for cheap. It seems Apple cares more about acquiring and suing for patents than anything else to the point they seem spiteful.

[rikilii]

08:32 PM on 03/08/2012

The entire purpose of having a patent system is to encourage people to invest in new inventions by guaranteeing them the sole right to profit from those inventions for a period of time.  The only way to enforce that right against infringers is to sue them.

[bigredsuperjock]

04:51 PM on 03/08/2012

Patent Laws: Once useful, now a way for lawyers to leech the economic life blood of America.