Apple filing could delay Kodak patent sale

Apple Inc on Thursday asked a federal judge to move a lawsuit against it by Eastman Kodak Co to a new court, which could derail the photography pioneer’s plan to quickly sell a large patent portfolio through the bankruptcy process.

Kodak had sued Apple on Monday, seeking to stop the largest U.S. company by market value from claiming ownership of 10 patents, including for technology that helps camera owners preview photographs on LCD screens.

These patents are part of a “digital-capture” portfolio of more than 700 patents for devices such as digital cameras, smartphones and tablets.

This portfolio has generated more than $3 billion of revenue since 2001. Kodak is trying to sell it fast, and remain in compliance with a $950 million bankruptcy loan.

But in a filing with the U.S. District Court in Manhattan, Apple said the dispute should be reviewed by a jury in a federal district court, not as Kodak wishes by a judge in a federal bankruptcy court, where there are no juries.

Apple also said that while it is “amenable to a reasonably-expedited proceeding,” it should be in district court, because a bankruptcy judge lacks the power and expertise to get involved.

“Kodak wants the bankruptcy court to rule on its claims in a matter of weeks based on a self-imposed, artificially-accelerated sale process,” Apple said. “No law or policy permits giving Apple’s intellectual property rights such short shrift.”

Chris Veronda, a Kodak spokesman, did not immediately respond to a request for comment. A lawyer for Kodak declined immediate comment.

Privately held FlashPoint Technology Inc, which Apple spun off in 1996, has also claimed ownership of the 10 disputed patents, and is also a defendant in the bankruptcy case.

Kodak owns about 10,700 patents overall and has hired Lazard to help market its digital-capture and digital-imaging patent portfolio, which together include more than 1,100 patents.

Last week, Kodak said it expected to auction the patents in early August, with a winning bidder announced by August 13.

Kodak is based in Rochester, New York. It filed for Chapter 11 protection on January 19. Apple is based in Cupertino, California.

The case is Apple Inc v. Eastman Kodak Co, U.S. District Court, Southern District of New York, No. 12-04881. Kodak’s lawsuit is Eastman Kodak Co v. Apple Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-ap-01720. The bankruptcy case is In re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.

Copyright Thomson Reuters 2012

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