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Kodak Trims Units, Files Lawsuits

Photonics.com
Jan 2012
By Melinda Rose, Senior Editor

ROCHESTER, N.Y., Jan. 18, 2012 — Amid widespread speculation that the company will soon file for bankruptcy, Eastman Kodak Co. showed last week that it will not go down without a fight, throwing patent punches against smartphone giants Apple and HTC for infringement and cutting its business structure from three segments to two.

Kodak filed a complaint with the US International Trade Commission (ITC) this month claiming that Apple iPhones, iPads and iPods, as well as some HTC smartphones and tablets, infringe its patents relating to transmitting digital images. It is asking the ITC to prevent importation of the devices in question.

The company also filed suit in the US District Court for the Western District of New York alleging the same infringement and seeking to permanently enjoin Apple and HTC from further infringement, as well as the recovery of damages.

The complaints against HTC also assert infringement of a patent for initiating the capture of still images while previewing motion images. A suit filed in January 2010 against Apple and Research in Motion Ltd. alleging the same infringement is still pending.

"Kodak is the leader in digital imaging innovation, and we have invested hundreds of millions of dollars creating our pioneering patent portfolio," said Laura G. Quatela, Kodak president and COO. "We've had numerous discussions with both companies in an attempt to resolve this issue, and we have not been able to reach a satisfactory agreement."

The company said it has licensed the technology in question to more than 30 companies, including LG, Motorola, Samsung and Nokia.

Kodak also filed suit against Fujifilm Corp. on Jan. 13, alleging infringement of its digital imaging technology patents.

The sale of Kodak's digital imaging portfolio, announced by the company in July 2011, is seen as key to its continued economic survival.

The Wall Street Journal, citing unnamed sources, reported on Jan. 4 that the company will file for Chapter 11 bankruptcy protection should it fail to sell a slew of digital patents to raise capital. Bloomberg News had reported in September that Kodak was weighing options, including a bankruptcy filing.

In September the company released a statement saying, "Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy. The company also continues to actively pursue its previously announced strategy to monetize its digital imaging patent portfolio."

The portfolio includes more than 1100 US patents pertaining to capturing, processing, storing, organizing, editing and sharing digital images, as well as imaging monetization applications, and represent about 10 percent of Kodak's entire patent portfolio.

The 132-year-old company, which once controlled the photographic film market and invented the digital camera, lost 88 percent of its value last year, and was warned by the New York Stock Exchange earlier this month that it is in danger of being delisted because its stock has slipped below $1 per share for 30 consecutive trading days. The company has six months to regain compliance.

At its peak in 1997, Kodak's stock was valued at nearly $30 billion. Today it stands at $145 million and shrinking, according to the Wall Street Journal. At the close of trading on Jan. 17, the company's stock was listed at about 53 cents a share.

Kodak also said this month it will reduce costs by reducing its business segments from three to two. The Commercial and Consumer segments replace the Graphic Communications Group, which provides digital printing equipment, consumables and software to the publishing and commercial printing industries; the Consumer Digital Imaging Group; and the Film, Photofinishing and Entertainment Group, which handled the company's traditional film and photographic paper products.

The company plans to announce its fourth-quarter results on Jan. 26.

For more information, visit: www.kodak.com  

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