NEW YORK, July 26 Apple Inc lost on
Thursday a bid to transfer its patent dispute with Eastman Kodak
Co out of bankruptcy court, a move that could have
complicated the photography company's plan to sell the
U.S. District Judge George Daniels in Manhattan quashed
Apple's bid to have him take up the patent dispute instead of
the bankruptcy judge to whom the lawsuit was assigned.
In a lawsuit last month in U.S. bankruptcy court in
Manhattan, Kodak said Apple, the largest U.S. company by market
value, wrongly claimed to own 10 patents arising from work that
the companies did together in the early 1990s.
Privately held FlashPoint Technology Inc also claimed
ownership through an assignment from Apple, which spun it off in
1996, and is also a defendant, Kodak said.
The patents include technology that helps camera owners
preview photographs on LCD screens.
They are part of Kodak's digital-capture portfolio, which
the company said includes more than 700 patents for devices such
as digital cameras, smartphones and tablets, and has generated
more than $3 billion in revenues since 2001.
In the case before bankruptcy judge Allan Gropper, Kodak has
argued that Apple's claims to the patents are time-barred and
are designed to cloud an expected auction of the patents in
early August. Gropper has yet to rule on the matter.
"These issues are teed up before judge Gropper," Kodak
lawyer Brian Glueckstein said at Thursday's hearing. "The claims
were barred years ago."
District Judge George Daniels, at the end of Thursday's
day-long hearing, said he agreed with Kodak that the dispute
should remain in bankruptcy court, at least until the judge
there rules on some of the key issues.
Gropper should have "an opportunity to render a decision on
the motion and to have an opportunity to control and move
forward the process," Daniels ruled.
Apple lawyer Gregory Arovas argued that the dispute involves
substantive patent law, which would be best addressed by a
federal district judge and required "mandatory withdrawal to
Kodak owns about 10,700 patents overall and has hired Lazard
to help market the digital-capture portfolio and a
digital-imaging portfolio, which includes more than 400 patents.
It said more than 20 possible buyers have signed confidentiality
Patent sales are needed under terms of a $950 million loan
that Kodak obtained to keep operating while in bankruptcy.
Rochester, New York-based Kodak filed for Chapter 11
bankruptcy protection on Jan. 19.
Apple is based in Cupertino, California, and FlashPoint is
headquartered in Peterborough, New Hampshire.
The cases are Eastman Kodak Co v. Apple Inc et al, U.S.
Bankruptcy Court, Southern District of New York, No. 12-ap-01720
and Eastman Kodak Co v. Apple Inc et al, U.S. District Court for
the Southern District of New York, No. 12-cv-4881.
The main bankruptcy case is In re: Eastman Kodak Co et al in
the same court, No. 12-10202.