Court Rules Kodak Digital Imaging Patents Are Part of EK Estate and...

Court Rules Kodak Digital Imaging Patents Are Part of EK Estate and May Be Sold

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Rochester, NY—Kodak 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 had been contested by Apple and FlashPoint Technologies, which asserted “ownership” interests in a small number of the 1,100 patents in the portfolios. The court, however, 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, it 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.

“We are gratified that the court has enabled us to move ahead with our patent auction in a timely manner and with clarity on ownership for the winning buyer,” said Timothy Lynch, Kodak vice president and chief intellectual property officer.

Interested buyers will be able to submit bids on a confidential basis, subject to review by Kodak, certain of its creditors and the Bankruptcy Court. The auction is scheduled for early August. 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 is also seeking a determination on summary judgment, to be heard this month, that those claims are time-barred. Even if the dispute with Apple and FlashPoint has not been fully resolved by the time of closing of the patent sale, Kodak may still sell the patents free and clear of Apple and FlashPoint’s claims by establishing “adequate protection” under the Bankruptcy Code for Apple and Flashpoint at the time of sale. kodak.com

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