Key Moment Arrives In Kodak's Patent Fight

U.S. International Trade Commission set to decide whether to review a judge's finding that Apple's iPhone and RIM's BlackBerry don't violate a Kodak image-preview patent.

ROCHESTER, New York (AP) -- Shares of Eastman Kodak Co. surged 9 percent Friday with a federal decision pending in a high-stakes dispute that pits the 131-year-old camera maker against technology giants Apple and Research in Motion Ltd.

The U.S. International Trade Commission in Washington, D.C., was set to decide later Friday whether to review a judge's finding in January that Apple's iPhone and RIM's BlackBerry don't violate a Kodak image-preview patent that the photography pioneer obtained in 2001.

A favorable decision would revive Kodak's hopes of negotiating royalties worth $1 billion or more. The agency's six commissioners would then decide by May 23 whether to alter the initial determination by its chief administrative judge, Paul Luckern.

Kodak has amassed more than 1,000 digital-imaging patents, and almost all digital cameras rely on that technology. Mining its rich array of inventions has become an indispensable tool in a long and painful turnaround.

That campaign was stalled by the recession, which began just after Kodak completed a three-year, $3.4 billion digital overhaul in 2007. Its payroll has plunged to 18,800 people, from 70,000 in 2002.

Kodak's shares jumped 28 cents to $3.41 in afternoon trading. They are trading at the lower end of a 52-week range of $2.90 to $9.08, however.

After failed negotiations, Kodak filed a complaint against Apple Inc. and Canada-based RIM in January 2010 with the commission that oversees U.S. trade disputes. It also filed two lawsuits against Apple in federal court in Rochester, but it has not specified the damages it is seeking.

In December 2009, the commission ruled that cell phones made by Samsung Electronics Co. and LG Electronics Inc. infringed the same Kodak patent, and Kodak received one-time $550 million royalty payment from Samsung and a $414 million deal was reached with LG Electronics.

Kodak has said it expects to continue to generate an average of between $250 million and $350 million annually through 2013 from licensing its digital technology. Over the last three years, it outpaced that figure, booking $1.9 billion in revenue.

Kodak has banked on replacing hefty profits it once made on film, with promising new lines of home inkjet printers and high-speed inkjet presses. It expects to generate its first profits from consumer printers this year and its commercial line is targeted to turn profitable in 2012.
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