Thursday, June 30, 2011

Kodak v. Apple/RIM @ ITC: Reconstructed & Remanded

Chief ALJ's claim constructions modified. Invalidity to be revisited. New target date is August 30.

The US International Trade Commission today announced its determination to "affirm in part, reverse in part, and remand in part, the final initial determination of the administrative law judge" in investigation 337-773 initiated by Kodak against Apple and RIM. The key elements of the notice were the Commission's announcement of modifications of the constructions of multiple claim terms important to the ALJ's findings of non-infringement. The matter is remanded to the ALJ so the issues of infringement and invalidity can be revisited under the new constructions. The new target date is August 30.

Kodak shares ended after-hours trading down nearly 15% at $3.05, a market cap decline of over $142M.

Kodak filed its complaint against Apple and RIM with the ITC on January 14, 2010. The ITC issued a Notice of Investigation on February 17, 2010. The investigation centered around claim 15 of Kodak's US Patent 6,292,218 and its applicability to Apple's iPhone 3G, 3GS, and 4, and a variety of RIM devices.

Chief ALJ Luckern's Final Initial Determination was issued January 24, 2011 with a finding that claim 15 is invalid as obvious, and with findings of non-infringement for all of the accused Apple and RIM devices.

To "win," Kodak needed the full commission to reverse both the invalidity -and- non-infringement findings from the Final ID. The full commission did neither, but did modify the claim constructions chosen by the ALJ at the Markman stage such that the non-infringement finding is weakened, particularly with respect to the iPhone 3G and RIM devices. The Commission did not itself address the invalidity finding, but left it to be revisited on remand using the new claim constructions.

Kodak CEO Antonio Perez set expectations of revenue from Apple and RIM similar to the nearly $1B extracted from LG and Samsung when Kodak settled the separate 337-663 investigation.

I will be able to provide opinion and analysis after the conclusion of the investigation.


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