Eastman Kodak Company Wins Approval To Auction Digital Imaging Patents

Eastman Kodak Company announced that it has obtained approval from the Bankruptcy Court to conduct an auction to sell its Digital Capture and Kodak Imaging Systems and Services (KISS) patent portfolios. Kodak’s motion was contested by Apple, Inc. (Apple) and FlashPoint Technologies, Inc. (FlashPoint) which have asserted ownership interests in a small number of the 1,100 patents in the portfolios. The Bankruptcy Court, over Apple and Flashpoint’s objections, found that all of the patents in the Digital Capture and KISS patent portfolios are property of Kodak’s estate. Accordingly, the Court granted Kodak the right to sell these patents free and clear of Apple and FlashPoint’s claims at the auction, subject to the applicable provisions of the U.S. Bankruptcy Code. Kodak is selling the patents under section 363 of the U.S. Bankruptcy Code which permits a sale free and clear of any adverse claim or interest. The patents will be sold in a fair, competitive process overseen by the Bankruptcy Court. At closing, the winning bidder can obtain an order of the Bankruptcy Court that protects it against any third-party ownership claims. The Bankruptcy Court’s ruling provides a path to separate the auction process from continuing litigation about the Apple and Flashpoint claims. Kodak believes these claims are without merit, and is also seeking a determination on summary judgment, expected to be heard in July, that the claims are time-barred.