Kodak shares plunge after patent ruling
Shares in Kodak have plunged 15 per cent in after-hours trading after the photography company received a mixed ruling on its patent infringement suit against Apple and BlackBerry maker Research in Motion.
The US International Trade Commission issued a partial ruling on Kodak’s claim that some Apple iPhones and BlackBerrys had violated its patent on an photo image preview function, but the panel returned the main decision on the case to an administrative law judge to reanalyse the evidence.
The judge had earlier found no patent infringement, but instead concluded that Kodak’s patent was invalid. Kodak had appealed that finding, which had also caused its shares to fall steeply.
The ITC is now asking the judge to reconsider his decision by using different definitions for technical terms relating to colour pixels and motion processing. This gives Kodak more time to present arguments. The judge is to issue a new decision by August 30.
Antonio Perez, Kodak chief executive, said earlier that an eventual ruling in the group’s favour could be worth more than $1bn in revenue from royalty payments. The company said it has licensed the patent involved in the case to other smartphone makers including Nokia, Samsung, Sony Ericsson, Motorola and LG.
Though the final decision has not yet been reached, traders expressed their pessimism in the markets, where the stock tumbled to $3.05 after hours, from $3.58 when the markets officially closed.
“This is going to be an uphill battle for Kodak,” said Florian Mueller, a patent industry blogger. The administrative law judge “can still rule against Kodak, and it’s reasonably probable that he will.”
However, the company took cheer from the ruling. “We are gratified that the commission has decided to modify in our favour the judge’s initial recommendation,” said Laura Quatela, general counsel and senior vice president. “As we have said from the start, we remain extremely confident this case will ultimately conclude in Kodak’s favour.”
The dispute is one of many high-profile legal battles between technology companies over the intellectual property behind smartphones and tablet computers. Apple has been in disputes with Nokia of Finland, Motorola of the US and HTC of Taiwan. RIM has been in disputes with Motorola and paid $612.5m to NTP to settle a patent infringement suit.
Kodak has been struggling to develop new revenue streams following the rapid collapse of its once dominant film business. The company has drawn increasing revenue from royalties and intellectual property litigation, including settlements with LG and Samsung.