Apple Inc, the biggest U.S. company by market value, was told it cannot now pursue an ongoing patent infringement lawsuit against Eastman Kodak Co, and was ordered not to file similar new litigation against the bankrupt photography company.
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 litigation over a Kodak patent that lets consumers preview digital photographs on LCD screens.
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Apple in February had asked the court for permission to lift a stay putting that case, which has been pending in a federal court in Kodak's hometown of Rochester, New York, on hold. 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 loan keeping it afloat through bankruptcy.
Any new patent litigation by Apple would also be improper under a federal rule designed to shield bankrupt entities from litigation that might constitute "creditor harassment," Gropper said.
Apple, which had sought the right to file new litigation against Kodak, 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.