Kodak Facing Patent Defeat to Apple & RIM, Patent Reaffirmed by PTO in Reexam Falters at International Trade Commission

On January 14, 2010, Eastman Kodak Company (NYSE:EK) brought an action at the International Trade Commission (ITC) challenging the importation of certain RIM Blackberry phones and Apple iPhones.   Kodak alleged that the importation of the phones violated Section 337 of the Tariff Act of 1930.  The predicate for the the alleged Section 337 violation was the infringement of claims 15, 23, 24, 25, 26 and 27 of United States Patent No. 6,292,218. Yesterday, January 24, 2011, Kodak announced that it has received notice that the Administrative Law Judge (ALJ) in the ITC action brought by Kodak against Apple Inc. and Research In Motion Limited had issued an initial determination recommending that the patent claims at issue are invalid and not infringed.

The final decision in the ITC case brought by Kodak is expected by May 23, 2011, after deliberation of the full ITC Commission.  As we wait for the full ITC Commission decision we are left to wonder.  The patent at issue relates to a technology invented by Kodak for previewing images on a digital camera-enabled device and the claims of this particular Kodak patent were recently confirmed as valid by the U.S. Patent and Trademark Office (USPTO).  So it would seem that the ITC may be poised to issue a ruling contrary to the determination of the Patent Office during reexamination proceedings.

“The ALJ’s recommendation represents a preliminary step in a process that we are extremely confident will conclude in Kodak’s favor,” said Laura G. Quatela, General Counsel, Chief Intellectual Property Officer and Senior Vice President, Eastman Kodak Company. “This very same Kodak patent was upheld by a different ALJ at the ITC in our case against LG and Samsung, whose products use the very same Kodak technology to function in the very same manner as similar products from Apple and RIM. What’s more, the attorneys at the ITC’s Office of Unfair Import Investigations, which separately examined this case, agree with Kodak’s interpretation of the patent. We fully expect the ITC Commission will ultimately rule that the patent claim at issue is valid and infringed by Apple and RIM.

Interestingly, on December 23, 2010, the United States Patent Office confirmed the patentability of claim 15 and claims 23-27, which are the ones subject to the ITC proceeding.  Patentability was confirmed for these claims of the ‘218 patent as the result of an ex parte reexamination proceeding initiated by attorney at Fish & Richardson on July 31, 2009.  In the Notice of Intent to Issue Reexamination Certificate the patent examiner, Linh Nguyen, explained that the closest prior art found fails to disclose or fairly suggest:

An electronic still camera having a motion process for initiating capture of a still image while previewing the motion images presented on the color display and a second number of color pixel values being less than a first number, in combination with the remaining limitations, as call for in claim 15 (claims 23-27 dependent directly or indirectly on independent claim 15).

(Note: italics and bold in the original).

Examiner Nguyen went on to explain the Remarks:

AS to the previous rejections that were applied, which are now withdrawn, the examiner agrees with the remarks presented in the Patent Owner’s response and the accompanying declaration of Dr. Wolf, submitted 11/15/2010, as to why Pape alone, or in combination with any other prior art reference of record fails to provide the claim features, of claim 15, initiating capture of a still images while previewing the motion images presented on the color display and a second number of color pixel values being less than a first number.

As pointed out in the Declaration of Dr. Wofl at para. 25 and 26 that Pape only provides review of motion images that are already recorded and stored on the recording medium.  For preview purpose Pape describes only a conventional, optical viewfinder, Pape does not describe a color display for previewing motion images while initiating capture of a still image.

The decrease in image quality described by Pape is not a function of a different number of color pixel values.  In fact, Pape teaches that once the interpolated fields are create (Pape at Fig. 4B), the number of fields and pixel values of the reviewed video is the same as the originally captured video.  (Pape at Fig. 4A).  Any decrease in image quality is due to the fact that for certain instances in time (when the still images were being recorded), no video data was recorded, and so the system of Pape estimates those missing fields by interpolation.  Of course, when creating interpolated fields the number of pixels of video ultimately displayed does not change relative to that originally captured, in fact the point of the interpolation is to ensure consistency in video capture/reproduction so that the viewer would not notice that certain video fields were never recorded. (Pape at 7:9-11), and Wolf Decl., Exh. A at para. 25.

In so far as obviousness is concerned, Examiner Nguyen did not find any combination of Pape, Nakao , Alston, Roberts and/or Sasaki to render claims 15 and 23-27 obvious, asserting that “a prima facie case of obviousness has not been presented…”

Kodak also has Federal Court actions pending against RIM and Apple in the Northern District of Texas and in the Western District of New York, where this same issue will be adjudicated.  Federal District Court actions tend to take much longer than an ITC proceeding to resolve, which is one reason they are favored by patent owners.  Another reason is providing the patent owner multiple bites at the same apple, so to speak.  The ITC proceeding will engage in the same analysis in terms of whether the patent claims are valid and infringed as will the District Courts.  The ITC, however, does not have the authority to issue damages, but rather can only order an injunction prohibiting the importation of infringing products.   Ultimately, the United States Court of Appeals for the Federal Circuit will resolve the issues surrounding claim interpretation, infringement and validity unless the parties settle.

“Kodak has a long history of digital imaging innovation,” Quatela said. “We have created an industry-leading portfolio of more than 1,000 digital imaging patents. We remain committed to protecting our intellectual property and to defending ourselves against those who would make erroneous claims to it.”

Kodak has licensed its imaging patents, including the ‘218 patent at issue in the ITC proceeding, to numerous leading technology companies including: LG, MEI/Panasonic, Motorola, Nokia, Olympus, Samsung, Sanyo, Sharp, Sony, and Sony Ericsson.