Apple barred from pursuing Kodak patent claims now

NEW YORK Fri Mar 9, 2012 3:21am GMT

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NEW YORK (Reuters) - Apple Inc, the biggest U.S. company by market value, was told it cannot now pursue ongoing patent infringement litigation against bankrupt photography giant Eastman Kodak Co.

U.S. Bankruptcy Judge Allan Gropper, who oversees Kodak's Chapter 11 case, said at a Thursday hearing it would be an "inappropriate way forward" to allow Apple to continue pursuing claims against Kodak while the company is in bankruptcy. The infringement claims centre on a Kodak patent that lets consumers preview digital photographs on LCD screens.

Judge Gropper also denied Apple's request to file a new patent infringement lawsuit against Kodak over printer and digital camera patents.

A Kodak spokeswoman said the company was "pleased" with the judge's ruling.

Apple in February had asked the court for permission to lift a stay freezing a patent lawsuit pending in a federal court in Kodak's hometown of Rochester, New York. Apple had hoped to move the case to Manhattan for a jury trial.

But while Gropper denied that request, he agreed that the case needs to be resolved sooner rather than later, and in a way that does not interfere with Kodak's ongoing plans to sell its patent portfolio and emerge from bankruptcy.

"I would request that the parties report to me on their efforts to come up with a procedure that truly works," he said.

Kodak had accused Apple of trying to slow the patent sale process, which it must undertake by the end of June under the terms of a $950 million (600 million pounds) loan keeping it afloat through bankruptcy.

Apple had also sought to bring new patent infringement claims against Kodak, but Gropper nixed that effort under a federal rule designed to shield bankrupt entities from litigation that might constitute "creditor harassment."

Apple had argued that patent litigation has been a major part of Kodak's strategy.

"I'm sure they have no problem moving ahead with the lawsuits where they're the complainants," Apple lawyer David Seligman told the judge.

The bankruptcy case is In re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.

(Reporting By Nick Brown; Editing by Gerald E. McCormick, Gary Hill)

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