Apple has been denied the permission to sue Kodak

Category: WTO Sub-category: Intellectual Property
Document type: news

20-Mar-2012 |9:46 IST | Edited by: Sharmila Maitra

A US bankruptcy judge has stopped Apple from pursuing claims of patent infringement against Kodak, saying that allowing the particular action to continue will be 'inappropriate'.

However, judge Allan Gropper, who is overseeing Kodak's application for chapter 11 bankruptcy protection, said that Apple couldn't continue its case against Kodak or file a new patent infringement lawsuit relating to digital cameras and printers.

The patent dispute is over the QuickTake 100 and 150 digital cameras that Kodak manufactured for Apple in the mid-1990s. Kodak alleged that both Apple and cellphone manufacturer HTC violated its patents with the design of the photo-taking and sharing features on their smartphone products. Kodak brought a legal action against Apple in January claiming that four of its patents were infringed.

Kodak had, earlier lodged its opposition to restarting the case, with Apple wanting to move the litigation to a court in Manhattan for a jury trial.

But Judge Gropper is of the opinion that the case needed to be resolved sooner rather than later in order to enable Kodak to sell its patent portfolio quickly and emerge from bankruptcy. Kodak needs to sell the patents by the end of June under the terms of a loan it has received in order to keep itself afloat in the market.

Kodak is looking to sell patents related to its digital imaging products, which in February it stopped production of, for as much as $2.6 billion.

Apple, however, countered Kodak's claims saying that it was in fact the owner of the patents. Apple contends that back in the early 1990s, when the two companies worked together "to explore how the two companies could work together on various projects including commercialization of Apple's digital cameras", it revealed a number of confidential digital camera technologies to Kodak.

Apple argued that, it also was at that time Kodak agreed to a non-disclosure agreement which stated that any changes or developments made to these technologies by Kodak simply remained the property of Apple.

Apple's attorneys have also accused Kodak of using patent litigation as part of its strategy to stave off bankruptcy. However, that suit is pending.  But the pending suit which is in the US District Court in Rochester, New York, was stopped automatically by both the International Trade Commission (ITC) and bankruptcy law, but Apple sought to lift the "automatic stay" which protects Kodak. 

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International Trade Commission (ITC) is an independent, bi-partisan, quasi-judicial, federal agency of the United States that provides trade expertise to both the legislative and executive branches.

Apple QuickTake (codenamed Venus, Mars, Neptune) was one of the first consumer digital camera lines. It was launched in 1994 by Apple Computer and was marketed for three years before being discontinued in 1997. Three models of the product were built including the 100 and 150, both built by Kodak; and the 200, built by Fujifilm.

Chapter 11 is a chapter of the United States' Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities.