Kodak Sues Apple, HTC Over Patents; Restructures Business Groups

Eastman Kodak Company filed lawsuits Tuesday against Apple and HTC, claiming the smartphone and tablet makers have infringed on its digital imaging technology patents. The once-iconic Kodak, which reportedly is preparing to seek bankruptcy protection, filed the complaints with the U.S. International Trade Commission (ITC) and the U.S. District Court for the West District of New York.

The complaint filed with the ITC claims that certain models of Apple’s iPhones, iPads and iPods infringe on Kodak’s patents for the transmission of digital images. The company simultaneously claims HTC is basing its smartphone models on Kodak patents for digital image previewing. The same claims were filed in the U.S. District Court for the Western District of New York.

"As we have stated before, 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, president and COO, Eastman Kodak Company, in a statement. "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.”

Kodak is hoping to be granted an exclusion order, preventing the ITC from importing the specific Apple and HTC devices called into question. Kodak also is asking the District Court to award it damages for the infringements.

Kodak CEO Antonio Perez has emphasized the importance of patent portfolio sales in Kodak’s move toward sustainability and growth. "Remember as well that the eventual sale of our digital patent portfolios will materially increase our cash balance and help to accelerate our efforts to complete the transformation," he said during the company’s third-quarter earnings call in November.

Kodak has licensed digital imaging patents to more than 30 companies, including LG, Motorola, Samsung and Nokia, all of which deliver royalties to Kodak, the company said.

In a separate announcement Tuesday, Kodak said it has undergone an internal restructure. Specifically, the company has reduced its business segments from three to two; specific product lines in the Graphic Communications Group, Consumer Digital Imaging Group, and Film, Photofinishing and Entertainment Group have been folded into either the newly launched Commercial Segment or Consumer Segment.

"As we complete Kodak’s transformation to a digital company, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution," said Perez. "This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak."

Kodak shares jumped 50 percent on the New York Stock Exchange Tuesday afternoon, according to The Wall Street Journal. Its restructure, however, won’t necessarily stop Kodak from seeking bankruptcy protection in the coming weeks if the company isn’t able to sell its patent portfolio, the Journal reported, citing sources.