Kodak Plunges 19%: Suit Against Apple, RIM Remanded To Judge

By Tiernan Ray

The U.S. International Trade Commission this afternoon said it voted to uphold in essence an earlier ruling that threw out a claim of patent infringement by Eastman Kodak (EK) against Apple (AAPL) and Research in Motion (RIMM), while remanding other matters back to the administrative law judge for further consideration, with a deadline of August 30th.

Notice is hereby given that the U.S. International Trade Commission has determined to affirm in part, reverse in part, and remand in part, the final initial determination (“ID”) issued by the presiding administrative law judge (“ALJ”) on January 24, 2011, finding no violation of section 337 in the above-captioned investigation.

Kodak shares are down 68 cents, or 19%, at $2.90 in late trading, as clearly the partial affirmation of the earlier rejection of the company’s claims is a disappointment for those who were expecting a victory against Apple and RIM.

The Commission’s statement this afternoon lays out — in quite technical detail — aspects that were upheld, clarified, and remanded back to the judge. Kodak had claimed some of RIM’s and Apple’s mobile devices violated its intellectual property claims as regards imaging technology.

Having examined the record of this investigation, including the ALJ’s final ID and the submissions of the parties, the Commission has determined to modify certain of the ALJ’s claim constructions. The Commission has modified the ALJ’s construction of the claim terms “motion processor” and “still processor,” and remands the question of infringement of these limitations to the ALJ.

The Commission has also modified the ALJ’s construction of “at least three different colors” in the limitation “a second number of color pixel values provided in a second color pattern having at least three different colors.” We find that the accused products infringe this limitation.

Finally, the Commission has determined to modify the construction of “initiating capture of a still image while previewing a motion image.” The Commission finds that the Apple iPhone 3G and the RIM accused products practice this limitation, and affirms the ALJ’s determination that Kodak has waived the argument that in a flash-photography mode of operation the Apple iPhone 3GS and Apple iPhone 4 practice this limitation. We find that the Apple iPhone 3GS and iPhone 4 do not literally infringe the asserted claim in their non-flash-photography modes of operation. The Commission takes no position on whether Kodak has waived its opportunity (including by its representations to the ALJ in connection with Order No. 27) to argue that the iPhone 3GS and iPhone 4 in their non-flash modes infringe this limitation, so construed, under the doctrine of equivalents or whether the iPhone 3GS and iPhone 4 practice this limitation under the doctrine of equivalents. These questions are remanded to the ALJ.

Update: Kodak issued a statement this evening saying that it finds the ruling to be favorable, and saying that it expects to prevail in its suit.