Eastman Kodak Co. v. Apple Inc. (In re Eastman Kodak Co.)

479 B.R. 280

In re EASTMAN KODAK COMPANY, et al., Debtors.Eastman Kodak Company, Plaintiff,

v.Apple Inc. and Flashpoint Technology, Inc., Defendants.

Bankruptcy No. 12–10202 (ALG).

Adversary No. 12–01720 (ALG).

United States Bankruptcy Court, S.D. New York.

Aug. 1, 2012.

Sullivan & Cromwell LLP, By: Andrew G. Dietderich, Esq., Steven L. Holley, Esq., Brian D. Glueckstein, Esq., Michael H. Torkin, Esq., New York, NY, for the Debtors.

Kirkland & Ellis LLP, By: James H.M. Sprayregen, P.C., Gregory S. Arovas, P.C., Paul M. Basta, P.C., Brian S. Lennon, Esq., New York, NY, and By: David R. Seligman, P.C., Marcus E. Sernel, P.C., Chicago, IL, for Apple Inc.

Pepper Hamilton LLP, By: Deborah Kovsky–Apap, Esq. Southfield, MI, and By: William D. Belanger, Esq., Todd A. Feinsmith, Esq., Lana A. Gladstein, Esq., Boston, MA, for FlashPoint Technology, Inc.

Cole, Schotz, Meisel, Forman, & Leonard, P.A., By: Michael D. Warner, Esq., Warren A. Usatine, Esq., New York, NY, for FlashPoint Technology, Inc.

MEMORANDUM OF OPINION

ALLAN L. GROPPER, Bankruptcy Judge.

Introduction

Before the Court is a motion for summary judgment filed by Eastman Kodak Company (“Kodak”), one of the debtors in the above-captioned bankruptcy case, on its claims for declaratory and injunctive relief against Apple Inc. (“Apple”) and FlashPoint Technology, Inc. (“FlashPoint”). Apple and FlashPoint have asserted inventorship claims pursuant to federal patent law and state law claims relating to certain patents registered to Kodak. Kodak contends that Apple and FlashPoint were on notice of Kodak's interests, but slept on their rights, and are thus precluded from asserting claims under the doctrine of laches and applicable statutes of limitations. For the reasons set forth below, Kodak's motion is granted in part and denied in part, without prejudice to renewal on a more complete record.

Facts

I. The Parties

On January 19, 2012, Kodak and certain of its affiliated companies (the “Debtors”) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses as debtors in possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy Code. According to the declaration accompanying its petition, Kodak created the first digital camera and has invested billions of dollars in research and development of digital imaging technology over the years. Declaration of Antoinette P. McCorvey ¶ 8 (Jan. 18, 2012), ECF No. 2.

Defendant Apple is a global leader in the design and manufacture of digital consumer products and is among the largest, if not the largest, company in the world as measured by market capitalization. Apple was interested in the development of digital camera technology at least as far back as 1994, when Apple and Kodak collaborated with respect thereto. Defendant FlashPoint was created as the result of a spin off by Apple in 1996, when Apple assigned to FlashPoint all of its “right, title, and interest” in certain digital imaging technology, patent applications, and issued patents (the “Spin Off Assignment”) as well as “the right to otherwise exercise all rights with respect thereto as Apple would have been permitted to exercise had this assignment not occurred.” Fry Declaration ¶¶ 4, 7–9. The terms of the Spin Off Agreement provided that FlashPoint would succeed to Apple's business of “developing, marketing, commercializing and licensing technology and products related to digital cameras and related host systems.” Id. ¶ 7, Ex. A, at p. 1.

II. The Disputed Patents

The inventorship and ownership of thirteen patents are in dispute. Kodak is the owner of record of each of the Disputed Patents as reflected in the records of the U.S. Patent and Trademark Office (“USPTO”). Lynch Declaration ¶ 3. Both Apple and FlashPoint claim interests in ten of the following patents (the “Jointly Disputed Patents”), and FlashPoint claims interests in three additional patents (the “Additional Disputed Patents,” and, together with the Jointly Disputed Patents, the “Disputed Patents”).

The Jointly Disputed Patents are:

(i) U.S. Patent No. 5,493,335 (the “335 Patent”), entitled “Single Sensor Color Camera with User Selectable Image Record Size,” was issued on February 20, 1996; names Kenneth A. Parulski, Richard M. Vogel, and Seishi Ohmori as inventors; and lists Kodak as the assignee of the patent.

(ii) U.S. Patent No. 5,828,406 (the “406 Patent”), entitled “Electronic Camera Having a Processor for Mapping Image Pixel Signals into Color Display Pixels,” was issued on October 27, 1998; names Kenneth A. Parulski and Timothy J. Tredwell as inventors; and lists Kodak as the assignee of the patent.

(iii) U.S. Patent No. 6,147,703 (the “703 Patent”), entitled “Electronic Camera with Image Review,” was issued on November 14, 2000; names Michael Eugene Miller and Richard William Lourette as inventors; and lists Kodak as the assignee of the patent.

(iv) U.S. Patent No. 6,292,218 (the “218 Patent”), entitled “Electronic Camera for Initiating Capture of Still Images While Previewing Motion Images,” was issued on September 18, 2001; names Kenneth A. Parulski and Timothy J. Tredwell as inventors; and lists Kodak as the assignee of the patent. The 218 Patent is a division of application No. 08/367,399, which was filed on December 30, 1994.¹

(v) U.S. Patent No. 6,441,854 (the “854 Patent”), entitled “Electronic Camera with Quick Review of Last Captured Image,” was issued on August 27, 2002; names Richard William Lourette, Michael Eugene Miller, Peter Fellegara, Linda M. Antos, and Robert H. Hibbard as inventors; and lists Kodak as the assignee of the patent. The application for the 854 Patent was published on August 23, 2001.

(vi) U.S. Patent No. 6,879,342 (the “342 Patent”), entitled “Electronic Camera with Image Review,” was issued on April 12, 2005; names Michael Eugene Miller and Richard William Lourette as inventors; and lists Kodak as the assignee of the patent. The 342 Patent is a division of application No. 08/769,573, which was filed on December 19, 1996.

(vii) U.S. Patent No. 7,210,161 (the “161 Patent”), entitled “Automatically Transmitting Images from an Electronic Camera to a Service Provider Using a Network Configuration File,” was issued on April 24, 2007; names Kenneth A. Parulski, Joseph Ward, and James D. Allen as inventors; and lists Kodak as the assignee of the patent. The 161 Patent is a continuation of application No. 09/004,046, which was filed on January 7, 1998.²

(viii) U.S. Patent No. 7,453,605 (the “605 Patent”), entitled “Capturing Digital Images To Be Transferred to an E–Mail Address,” was issued on November 18, 2008; names Kenneth A. Parulski, Joseph Ward, and Michael C. Hopwood as inventors; and lists Kodak as the assignee of the patent. The 605 Patent is a continuation of application No. 09/821,152, filed on March 29, 2001, which itself was a continuation of application No. 08/977,382, filed on November 24, 1994.

(ix) U.S. Patent No. 7,742,084 (the “084 Patent”), entitled “Network Configuration File for Automatically Transmitting Images From an Electronic Still Camera,” was issued on June 22, 2010; names Kenneth A. Parulski, Joseph Ward, and James D. Allen as inventors; and lists Kodak as the assignee of the patent. The 804 Patent is a continuation of application No. 09/783,437, filed on February 14, 2001, which was a division of application No. 09/004,046, filed January 7, 1998.

(x) U.S. Patent No. 7,936,391 (the “391 Patent”), entitled “Digital Camera with Communications Interface for Selectively Transmitting Images Over a Cellular Phone Network and a Wireless LAN Network to a Destination,” was issued on May 3, 2011; names Kenneth A. Parulski, Joseph Ward, and James D. Allen as inventors; and lists Kodak as the assignee of the patent. The 391 Patent is a continuation of application No. 11/692,224, filed on March 28, 2007, which itself was a continuation of application No. 09/783,437, filed February 14, 2001, which in turn was a division of application No. 09/004,046, filed January 7, 1998.

The Additional Disputed Patents are:

(i) U.S. Patent No. 6,288,743 (the “743 Patent”), entitled “Electronic Camera for Processing Image Segments,” was issued on September 11, 2001; names George E. Lathrop as inventor; and lists Kodak as the assignee of the patent.

(ii) U.S. Patent No. 6,542,192 (the “192 Patent”), entitled “Image Display Method and Digital Still Camera Providing Rapid Image Display by Displaying Low Resolution Image Followed by High Resolution Image,” was issued on April 1, 2003; names Hideki Akiyama and Masaki Izumi as inventors; and lists Kodak as the assignee of the patent. The application for the 192 Patent was published on May 31, 2001.

(iii) U.S. Patent No. 7,508,444 (the “444 Patent”), entitled “Electronic Camera with Quick View and Quick Erase Features,” was issued on March 24, 2009; names Thomas A. Napoli, Masaki Izumi, Kyoicki Omata, Carolyn A. Bussi, and Clay A. Dunsmore as inventors; and lists Kodak as the assignee of the patent.

III. Relationship Between Kodak and Apple

Between 1992 and 1996, Apple enlisted Kodak to assist it in developing certain aspects of digital cameras under the Apple project code names Adam, Aspen, and Phobos. Internal Kodak files establish that, in 1992, Apple had discussed developing “burst” technology for digital cameras. Ex. 23 to Apple's Opposition to Summary Judgment, ECF No. 22. On November 24, 1992, Apple gave a presentation to Kodak entitled, “Adam Project Technical Overview.” Ex. 31 to Apple's Opposition to Motion. On January 25, 1993, Eric Zarakov, a project manager at Apple, sent a letter (the “Zarakov Letter”) to David Lewis, a manager in Kodak's computer camera products division. Ex. 30 to Apple's Opposition to Motion. The Zarakov Letter documents that Apple and Kodak representatives met in December 1992 to discuss digital camera technology, including technical architecture associated with the Adam project. The discussions were also documented...