Kyocera Corp. (KYO) sued Eastman Kodak Co. (EKDKQ) for patent-infringement damages as Kodak heads to court to seek approval of the long-awaited sale of its portfolio of digital-photography and Web-based photo-application patents.
The complaint in the New York bankruptcy court that is overseeing Kodak's Chapter 11 case says the alleged infringement occurred during the bankruptcy, so the claimed damages rank as top priority claims. According to the suit, Kodak's printers and digital cameras infringe 15 patents owned by Kyocera.
Kodak spokesman Michael Veronda said Monday the company is declining to comment on Kyocera's suit. The complaint says Kodak has denied liability for the alleged infringement.
The case was filed about a week in advance of Friday's scheduled hearing, during which Kodak will seek approval to move ahead with the sale of its digital-photography patents to a group of technology heavyweights for about $525 million.
A day after the infringement suit was filed, Kyocera filed papers expressing reservations about the patent-portfolio sale, complaining that protections licensees negotiated last year aren't in the sale papers Kodak plans to take to court.
Kyocera's sale objection prompted a series of "me-too" filings from Ricoh Co. (RICOY), Nikon Corp. (NINOY), and units of Oracle Corp. (ORCL) and Motorola Solutions Inc. (MSI).
The companies that license Kodak patents fear the sale will "extinguish every right, license and defense" that Kyocera the other licensees have against Kodak in court fights over patent rights.
While they don't object to the proposed sale of the Kodak digital-photo patents, the licensees want the protective language that they claim was in documents approved last year reinserted in the new version of the sale papers.
Kodak, of Rochester, N.Y., has been trying to sell the patents for a year and a half and at one time hoped to get as much as $2.5 billion for them. In December, the company announced a smaller deal, but one that will provide cash to keep it on track to get out of bankruptcy.
Intellectual Ventures LLC, the buyer, will license the patents to a roster of technology heavyweights that includes Apple Inc. (AAPL), Google Inc. (GOOG), Samsung Electronics Co. (SSNHY), Microsoft Corp. (MSFT), BlackBerry maker Research In Motion Ltd. (RIM.T), and others.
Kyocera and other licensees don't want their rights and defenses stripped away before the patents are put into the hands of the new owners, court papers say.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
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