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Monday, January 24, 2011, 04:00 pm PT (07:00 pm ET)

Kodak loses imaging patent claim against Apple, RIM

A patent infringement case filed by Eastman Kodak against Apple and RIM has been ruled to be invalid by a US International Trade Commission judge.

The patent, pertaining to low resolution previews of video that are displayed while recording full quality video, was successfully used by Kodak to reach mobile-related licensing agreements with Samsung and LG over the past two years worth $864 million, according to a report by Bloomberg.

Because the patent relates to essentially every modern mobile phone that includes a camera, Apple and RIM were seen as prime targets for similar agreements. However, Apple and RIM argued that the patent was invalid because it was an "obvious variation of an earlier invention," and the ITC judge agreed.

The report noted that if the commission overturns the judge's ruling, the judge would recommend that all affected devices be blocked from US import, a move that would kill domestic distribution of virtually all BlackBerry models and all iPhones.

Most patent cases involve a plea to block imports with the ITC, a move that greatly leverages the importance of the case, given that virtually all electronics are now being imported from Far East assemblers. Virtually every mobile manufacturer is now engaged in a web of intellectual property lawsuits, many of which include demands that the ITC block all imports of the challenged devices.

RIM and Apple are both suing Kodak, with RIM filing a federal civil suit challenging the validity of other Kodak patents while Apple is suing Kodak directly for patent infringement in a trial that begins the end of January.

Kodak's setback caused the company's stock to fall 8.6 percent after the ruling was announced. Once a leader in the now dying world of chemical photography, the company is seeking to transition toward digital imaging and hopes to use its portfolio of more than a thousand patents related to imaging to earn royalties that can fund that shift.

The imploding demand for Kodak's traditional film products has slashed the company's revenues nearly in half in the last five years to $7.6 billion in 2009.