Patent matters are tough to report. Most outlets get things wrong. Take what you read with a grain of salt.

As mentioned in my previous post, the U.S. International Trade Commission gave notice today of a fairly intricate set of determinations in an investigation involving Kodak, Apple, and RIM. As is invariably the case with patent matters, the details of the determinations are being misreported.

This is not surprising. These are complex matters both procedurally and technically. However, it's important that readers know that what they are reading is not always correct. I'll pick out a few such inaccuracies from today's articles to demonstrate.

First, from the AP:

The federal agency did find limited patent infringement. It also sent some matters back to the judge for further review, and Kodak could still prevail in the remaining claims.

The Commission did not find "limited patent infringement." The Commission found that the accused products "infringed" or "practiced" certain limitations of the one patent claim at issue, but the Commission did not itself render an infringement determination. The question of infringement is remanded.

Also from the AP:

The commission also found that Apple and RIM infringed on a patent related to "initiating capture of a still image while previewing a motion image." ...

The commission ruled that Apple and RIM did infringe a Kodak patent under the commission's revised definition of "at least three different colors."

Again, there was no determination by the Commission of infringement announced today, and there is only one patent, and one claim of that patent, at issue. The Commission modified constructions of claim terms and remanded the matter.

From TUAW:

However, two other claims have been restructured by the ITC, siding with Kodak on one claim and not making a determination on a third. The entire case is being sent back to lower courts for further review, giving Eastman Kodak Co. a remote possibility of prevailing with the other claims.

Multiple claims were not "restructured." There is only one patent claim at issue in the investigation. The Commission modified the constructions of terms within multiple limitations of that one claim. The case is also not being sent back to "lower courts." The matter is remanded to the administrative law judge at the ITC.

From AppleInsider:

The commission did however rule that Apple and RIM were guilty of infringing on a Kodak patent related to "initiating capture of a still image while previewing a motion image," and another under the commission's revised definition of "at least three different colors."

Again, the Commission made no such ruling. The Commission found that under the modified constructions, the accused products meet some of the claim limitations. No finding was made regarding overall infringement of that patent claim.

 

Patent cases are very tough to report accurately, especially for a general tech reporter or blogger without a legal background. If you really are interested in patent issues, however, consider taking the extra time and look to more legally-oriented sources who might have a firmer grasp on the subject matter and terminology. You might find that things make more sense.

Related Posts:

• Kodak v. Apple/RIM @ ITC: Claim Constructions Modified, Remanded
• Kodak v. Apple/RIM @ ITC: Extended by a Week
• Apple v. Kodak @ ITC: Initial Determination
• Kodak v. Apple @ ITC: Extended by a Month
• Kodak Was Granted Full Commission Review by 5-1 Vote
• Kodak v. Apple at the ITC: What Happens Now?
• Tangled Procedural Webs of the ITC and the USPTO
• RGB, YCC, and the importance of claim drafting
• Kodak v. Apple at the ITC: What's This About?
• Kodak enlists New York politicos in ITC dispute with Apple
• WSJ: ITC Revives Kodak Hopes in Apple, RIM Patent Case
• PowerCD & Quicktake: Apple and Kodak, in happier days together
• Bloomberg: Kodak Says $1B at Stake in Apple, RIM Patent Dispute

Chief ALJ's claim constructions modified. Invalidity to be revisited. New target date is August 30.

The US International Trade Commission today announced its determination to "affirm in part, reverse in part, and remand in part, the final initial determination of the administrative law judge" in investigation 337-773 initiated by Kodak against Apple and RIM. The key elements of the notice were the Commission's announcement of modifications of the constructions of multiple claim terms important to the ALJ's findings of non-infringement. The matter is remanded to the ALJ so the issues of infringement and invalidity can be revisited under the new constructions. The new target date is August 30.

Kodak shares ended after-hours trading down nearly 15% at $3.05, a market cap decline of over $142M.

Kodak filed its complaint against Apple and RIM with the ITC on January 14, 2010. The ITC issued a Notice of Investigation on February 17, 2010. The investigation centered around claim 15 of Kodak's US Patent 6,292,218 and its applicability to Apple's iPhone 3G, 3GS, and 4, and a variety of RIM devices.

Chief ALJ Luckern's Final Initial Determination was issued January 24, 2011 with a finding that claim 15 is invalid as obvious, and with findings of non-infringement for all of the accused Apple and RIM devices.

To "win," Kodak needed the full commission to reverse both the invalidity -and- non-infringement findings from the Final ID. The full commission did neither, but did modify the claim constructions chosen by the ALJ at the Markman stage such that the non-infringement finding is weakened, particularly with respect to the iPhone 3G and RIM devices. The Commission did not itself address the invalidity finding, but left it to be revisited on remand using the new claim constructions.

Kodak CEO Antonio Perez set expectations of revenue from Apple and RIM similar to the nearly $1B extracted from LG and Samsung when Kodak settled the separate 337-663 investigation.

I will be able to provide opinion and analysis after the conclusion of the investigation.

 

Related Posts:

• Kodak v. Apple/RIM @ ITC: Extended by a Week
• Apple v. Kodak @ ITC: Initial Determination
• Kodak v. Apple @ ITC: Extended by a Month
• Kodak Was Granted Full Commission Review by 5-1 Vote
• Kodak v. Apple at the ITC: What Happens Now?
• Tangled Procedural Webs of the ITC and the USPTO
• RGB, YCC, and the importance of claim drafting
• Kodak v. Apple at the ITC: What's This About?
• Kodak enlists New York politicos in ITC dispute with Apple
• WSJ: ITC Revives Kodak Hopes in Apple, RIM Patent Case
• PowerCD & Quicktake: Apple and Kodak, in happier days together
• Bloomberg: Kodak Says $1B at Stake in Apple, RIM Patent Dispute

 

 

New target date is June 30.

The US International Trade Commission announced today a one week extension of the target date in the review of Chief ALJ Luckern's Final Initial Determination in investigation 337-703.

Kodak filed its complaint against Apple and RIM with the ITC on January 14, 2010. The ITC issued a Notice of Investigation on February 17, 2010. The investigation centered around claim 15 of Kodak's US Patent 6,292,218 and its applicability to Apple's iPhone 3G, 3GS, and 4, and a variety of RIM devices.

Chief ALJ Luckern's Final Initial Determination was issued January 24, 2011 with a finding that claim 15 is invalid as obvious, and with findings of non-infringement for all of the accused Apple and RIM devices.

To "win," Kodak will need the full commission to reverse both the invalidity -and- non-infringement findings from the Final ID. Reversal of the invalidity finding would require successful challenges to multiple invalidating combinations of art. Reversal of the non-infringement findings would require modification of the Chief ALJ's constructions of multiple claim terms.

Kodak CEO Antonio Perez set expectations of revenue from Apple and RIM similar to the nearly $1B extracted from LG and Samsung when Kodak settled the separate 337-663 investigation.

 

Related Posts:

• Apple v. Kodak @ ITC: Initial Determination
• Kodak v. Apple @ ITC: Extended by a Month
• Kodak Was Granted Full Commission Review by 5-1 Vote
• Kodak v. Apple at the ITC: What Happens Now?
• Tangled Procedural Webs of the ITC and the USPTO
• RGB, YCC, and the importance of claim drafting
• Kodak v. Apple at the ITC: What's This About?
• Kodak enlists New York politicos in ITC dispute with Apple
• WSJ: ITC Revives Kodak Hopes in Apple, RIM Patent Case
• PowerCD & Quicktake: Apple and Kodak, in happier days together
• Bloomberg: Kodak Says $1B at Stake in Apple, RIM Patent Dispute

On May 12, 2011, Administrative Law Judge of the USITC Robert K. Rogers, Jr., issued an Initial Determination in investigation 337-717.  The investigation involves two Apple patents, U.S. Pat. No. 6,031,964 and U.S. Pat. No. RE38,911, and alleged infringement by Kodak.

The initial determination was not in Apple's favor.  While there is not a public version of the Initial Determination yet available, the Conclusions of Law have been made public.  The key findings are:

• An industry does not exist in the United States that exploits U.S. Pat. No. 6,031,964, as required by 19 U.S.C. § 1337(a)(2).
• Claims 1, 3, 5, 7, and 8 of U.S. Pat. No. 6,031,964 are not invalid.
• The accused Kodak products do not infringe claims 1, 3, 5, 7, and 8 of U.S. Pat. No. 6,031,964.
• There is no violation of 19 U.S.C. § 1337(a)(l) with respect to U.S. Pat. No. 6,031,964.

and:

• An industry exists in the United States that exploits U.S. Pat. No. RE38,911, as required by 19 U.S.C. § 1337(a)(2).
• Claims 15, 27, 30, and 38 of U.S. Pat. No. RE38,911 are invalid pursuant to 35 U.S.C. § 102.
• The accused Kodak: products do not infringe claims 15,27,30, and 38 of U.S. Pat. No. RE38,911.
• There is no violation of 19 U.S.C. § 1337(a)(l) with respect to U.S. Pat. No. RE38,911.

From Bloomberg:

“We’re pleased by today’s ruling and we are looking forward to the full ITC commission’s ruling in our case against Apple and RIM, which is expected in late June,” David Lanzillo, a spokesman for Kodak, said in a statement.

The investigation against Apple is number 337-703, with a target date for completion of June 23.

 

Note: This post was delayed due to the extended blogger.com outage.

 

Previous coverage:

• Kodak v. Apple @ ITC: Extended by a Month
• Kodak Was Granted Full Commission Review by 5-1 Vote
• Kodak v. Apple at the ITC: What Happens Now?
• Tangled Procedural Webs of the ITC and the USPTO
• RGB, YCC, and the importance of claim drafting
• Kodak v. Apple at the ITC: What's This About?
• Kodak enlists New York politicos in ITC dispute with Apple
• WSJ: ITC Revives Kodak Hopes in Apple, RIM Patent Case
• PowerCD & Quicktake: Apple and Kodak, in happier days together
• Bloomberg: Kodak Says $1B at Stake in Apple, RIM Patent Dispute

In an action approved on April 8, 2011, the Commissioners in Kodak's USITC investigation against Apple and RIM (337-TA-703) voted 6-0 to extend the target date of the investigation by one month.  The new target date is June 23, 2011.

The Commission is currently considering final disposition of the January 24, 2011 Initial Determination by the ALJ, which found no violation of Section 337 by Apple.

Also listed as having been filed on April 8 were Apple's Brief on the Issues Under Commission Review and Kodak's Response to the Commission's Notice of Review, neither of which are available for public review.

 

Previous coverage:

• Kodak Was Granted Full Commission Review by 5-1 Vote
• Kodak v. Apple at the ITC: What Happens Now?
• Tangled Procedural Webs of the ITC and the USPTO
• RGB, YCC, and the importance of claim drafting
• Kodak v. Apple at the ITC: What's This About?
• Kodak enlists New York politicos in ITC dispute with Apple
• WSJ: ITC Revives Kodak Hopes in Apple, RIM Patent Case
• PowerCD & Quicktake: Apple and Kodak, in happier days together
• Bloomberg: Kodak Says $1B at Stake in Apple, RIM Patent Dispute

 

 

The just-published voting record for the decision on March 25 to allow full commission review in Investigation 337-TA-703 reveals a 5-1 vote in favor.

For: Commissioners Pinkert, Aranoff, & Pearson, Vice Chairman Williamson, and Chairman Okun

Against: Commissioner Lane

The lop-sided vote is not surprising given the number of issues the parties were directed to brief for the full review.

On March 25, 2011, the U.S. International Trade Commission "determined to review 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."

The breadth of what the parties are now asked to brief suggests the possibility of a fresh review of the infringement case, taking into account prior ITC claim constructions and the successful reexam of the '218.

The parties are being asked to address:

1. whether the ALJ permissibly relied on prior art combinations that Kodak did not have a chance to address and whether they render claim 15 invalid for obviousness,
2. whether the ALJ should have considered the claim constructions in Inv. No. 337-TA-663 (prior Kodak ITC case against LGE) and what effect those constructions should have in this case,
3. whether the ALJ should have considered the reexaminations and what effect those reexaminations should have in this case,
4. whether U.S. Patent No. 5,493,335 (the Pularski '335 discussed in a prior post) is prior art, and if so, on what statutory basis,
5. the meaning of “color pixel value” in part (b) of claim 15 and whether is is “the value of a color pixel”.

The weight given to the reexamination is certainly a key issue.  A presumption that the claims are valid based on the results of the reexam would move the discussion substantially toward item 5, and the associated issues of YCC color space, RGB values, and the meaning of a "at least three different colors."

For reference, claim 15, element (b):

(b) a motion processor for generating from the captured images, a second number of color pixel values provided in a second color pattern having at least three different colors and representative of a series of motion images to be previewed, the second number of color pixel values being less than the first number of color pixel values, and the second color pattern being different from the first color pattern;

The Commission also asks for written submissions on the form of remedy, should one be required.  The Commission has the power to "(1) issue an order that could result in the exclusion of the subject articles from entry into the United States, and/or (2) issue one or more cease and desist orders that could result in a respondent being required to cease and desist from engaging in unfair acts in the importation and sale of such articles."  The impact that a block of importation of Apple products would have on the public and the economy, however, make that path highly unlikely.

Sources:

• US ITC Investigation 337-TA-703 NOTICE OF COMMISSION DETERMINATION TO REVIEW A FINAL DETERMINATION OF NO VIOLATION OF SECTION 337; SCHEDULE FOR FILING WRITTEN SUBMISSIONS ON THE ISSUES UNDER REVIEW AND ON REMEDY, THE PUBLIC INTEREST, AND BONDING
• US Patent 6,292,218

 

Adding to the complexity of Kodak's ITC matter against Apple are the temporally intertwined actions of the USPTO on reexamination requests related to the '218 patent.   Two such requests were filed, the first by LG Electronics on July 31, 2009, the second by RIM on March 9, 2010.


Kodak takes issue with the ALJ's finding of invalidity of the '218 in part because it conflicts with a USPTO determination during the reexamination process:

[following a redacted portion in public version of filing]

"He found this even though three expert Examiners at the USPTO had recently confirmed that claim 15 is patentable after considering the same prior art and invalidity analysis (Apple's expert Dr. Bovik's Expert Report) in two reexaminations (one of which was filed by counsel for RIM).  Kodak provided a copy of the USPTO's decision to the Chief ALJ on December 28, 2010, but the Final ID fails to even acknowledge the USPTO's decision, let alone provide it substantial deference as the Federal Circuit requires.

The Chief ALJ also improperly decided the invalidity issues based on combinations of prior art that were not advanced or addressed by any party in this Investigation."

(Kodak's Petition for Review)

Indeed, the consolidated reexam (USPTO control numbers 90/010,631 and 90/010,899) led to the confirmation of '218 claim 15:

Claims 15 and 23-27 are confirmed. The following is an examiner's statement of reasons for patentability and/or confirmation of the Claims found patentable in this reexamination proceeding:

The closest prior art fails to disclose or fairly suggest:

An electronic still camera having a motion processor 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 called for in claim 15 (claims 23-27 depend directly or indirectly on independent claim 15).

(Ex parte reexamination communication from USPTO, 12/23/2010)

Note: Both LGE and RIM also filed reexamination requests related to another patent, US5,493,335.  The first listed inventor on the '335 patent is Kenneth A. Parulski of Kodak, who is also the first named inventor on the '218 patent at issue in the Apple case.  The Parulski '335 is one of the references cited by the ALJ in the determination that the '218, the patent at issue in the Apple case, is invalid.

A key dispute in the Kodak ITC investigation is over the meaning of "at least three different colors" in element "b" of claim 15:

(b) a motion processor for generating from the captured images, a second number of color pixel values provided in a second color pattern having at least three different colors and representative of a series of motion images to be previewed, the second number of color pixel values being less than the first number of color pixel values, and the second color pattern being different from the first color pattern;

In essence, the claim describes capturing images with a high resolution pixel mosaic, a Bayer pattern with four sensors per pixel, half being green, for instance, and producing a motion stream of lower resolution images where each pixel is represented by three color values, such as red, green, and blue intensities ("RGB").

The filings imply strongly that Apple captures high resolution images with an RGB sensor, then produces lower resolution JPEG images for preview display.  A common first step in converting uncompressed RGB images to compressed JPEG images is to convert the color space of the image to YCbCr (or "YCC" as used in the filings).  This allows a lower compression ratio to be used on the very important luminance channel, and higher compression ratios to be used on the two chroma channels.

Do pixels represented in YCC color space have "three different colors"?  That's a key issue in this case.

From a imaging or color science perspective, the replacement of the claim phrase "having at least three different colors" with "each represented by at least three color coordinates" or "said pixels represented using at least three color channels," would have better encompassed the use of YCC or other luminance-chrominance color coordinate spaces.

With the use of the phrase "at least three different colors," the administrative law judge understandably gravitated toward an interpretation where each of the three "colors" is a "color" in layman's terms, namely "red," "green," or "blue."  It is this interpretation that Kodak is now trying to change when the case is reviewed.


Sources:

• Final Initial and Recommended Determinations, ITC 337-703, Official Receive Date 3/08/2011
• US ITC Filing, COMPLAINANT EASTMAN KODAK COMPANY'S PETITION FOR REVIEW OF THE FINAL INITIAL AND RECOMMENDED DETERMINATIONS, Filed February 17, 2011 by Eric C. Rusnak of K&L Gates, representing Eastman Kodak.
• US Patent 6,292,218

 

As mentioned in the previous post, inconsistencies in Administrative Law Judge rulings regarding the same patent in different cases likely contributed to today's grant of full commission review of Kodak's case against Apple.

In a nutshell, in a previous ITC investigation, 337-TA-663, claim 15 of Kodak's US6,292,218 patent was found valid and infringed by certain Samsung phones.  In the 337-TA-703 investigation involving Apple, claim 15 was found invalid under 35 USC 103 and none of the accused products was found to infringe.

Kodak argues, among other points, that the same body reviewing the same patent again within a very short timeframe should have a consistent view of the validity of that patent.  In particular, Kodak took issue with the Markman ruling regarding claim 15, and purportedly erroneous construction of the phrase "at least three different colors" in element "b."  Kodak argues that Apple does not contest that elements "a," "c," or "f," are satisfied under any construction, that "b" and "e" would not be contested under a "proper" construction, and that Apple phones initiate capture of a still image while previewing motion images, as required by element "d".

The claim is reproduced below:

15. An electronic still camera for initiating capture of a still image while previewing motion images on a display, comprising:

(a) an image sensor having a two-dimensional array of photosites covered by a mosaic pattern of color filters including at least three different colors for capturing images of a scene, each captured image having a first number of color pixel values provided in a first color pattern;

(b) a motion processor for generating from the captured images, a second number of color pixel values provided in a second color pattern having at least three different colors and representative of a series of motion images to be previewed, the second number of color pixel values being less than the first number of color pixel values, and the second color pattern being different from the first color pattern;

(c) a color display for presenting at least some of the motion images of the series of motion images corresponding to the captured images of the scene, the color display having an arrangement of color display pixels including at least three different colors in a pattern different from the first color pattern;

(d) a capture button for initiating capture of a still image while previewing the motion images presented on the color display;

(e) a still processor for generating a third number of color pixel values including at least three different colors representative of a captured still image; and

(f) a digital memory for storing the processed captured still image.

Sources:

• US ITC Filing, COMPLAINANT EASTMAN KODAK COMPANY'S PETITION FOR REVIEW OF THE FINAL INITIAL AND RECOMMENDED DETERMINATIONS, Filed February 17, 2011 by Eric C. Rusnak of K&L Gates, representing Eastman Kodak.
• US Patent 6,292,218

 

While it was perhaps inconsistencies in rulings between Administrative Law Judges that tipped the scales in Kodak's favor for review of its case, Kodak also enlisted the help of those in the political sphere.  Over the past few weeks, letters from various New York State lawmakers were submitted to the International Trade Commission urging review of the case by the full commission.  Andrew Cuomo, Chuck Schumer, Louise Slaughter, Kirstin Gillibrand and others weighed in with similar-sounding letters also touting the importance of Kodak to New York.

From Governor Cuomo's letter of March 18, 2011:

Dear Madame Chairman, Mr. Vice Chairman, and Commissioners:

I write to share my perspective on the current ITC claim brought by Eastman Kodak Company against Apple and Research In Motion (RIM). I believe that it is in the best interest of sound trade policy and the fair protection of intellectual property for this claim to be reviewed by the full Commission.

Digital innovation at Eastman Kodak - which includes invention of the digital camera and other breakthrough technologies - has had a significant benefit for the economy in upstate New York, as well as for 7,100 Kodak employees and Kodak's 20,000 retirees who call New York home.

It is my understanding that the Administrative Law Judge (ALJ) in Kodak's ITC case against Apple and RIM issued a preliminary decision that contradicts a decision made less than a year ago by another ALJ concerning the exact same Kodak patent.

Given the value of Kodak innovation to the region's economy and the national economy, as well as this discrepancy in ALJ decisions, I believe that it is of fundamental importance for Kodak's claim to be heard promptly and before the full Commission.

Thank you for your consideration of my perspective on this matter.

Sincerely, Andrew M. Cuomo

Source: US ITC filings

 

A mixed day for Apple at the ITC.  From the WSJ:

The U.S. International Trade Commission elected Friday to review a patent-infringement complaint by Eastman Kodak Co. against Apple Inc. and Research in Motion Ltd., reversing a January recommendation from an ITC judge.

The ITC said it would review the initial patent ruling in its entirety. The complaint tries to determine whether Apple's iPhone and Research in Motion's BlackBerry violated Kodak's patents on technology to preview images.

The agency originally found Kodak's patents were invalid and hadn't been infringed. The Commission said Friday that one or more cease-and-desist orders may be issued upon further review of the case.

Such orders could keep Apple and RIM from importing or selling mobile devices with digital cameras in the U.S. A final decision is expected by May 23.

The news prompted shares of Kodak to surge 20% in after-hours trading to $4.07, adding on to Friday's 8.6% gain in the regular trading session.

[...]

Even with today's 20% "surge," EK is still ~20% below its January 24 price of $5.22.

A settlement or licensing agreement before May 23 would not surprise me.

In the early 1990s, Kodak's vision of their role in the high-tech home of the future was as a provider of a digital version of the 35mm slide carousel.  The Jobs-less Apple strangely bought into this vision for a short while.  The 1993 Apple Power CD played Kodak's PhotoCD discs.

Apple and Kodak also partnered on the mid-1990s Quicktake camera line.

From Bloomberg:

Kodak used the ITC to gain $550 million from Samsung and $414 million from LG for allegedly infringing the same patent as in the Apple and RIM cases.

and:

Kodak, a 131-year-old company that popularized photography with the Brownie and Instamatic cameras, generated $838 million from patents last year. The company has told investors it expects to average $250 million to $350 million in annual revenue from intellectual property licensing through 2013. That figure doesn’t include potential Apple and RIM royalties.

EK's current market cap is only ~ $842M.  During the financial crisis, it dropped to barely above $600M.  The $683M operating loss for 2010 and negative $1B book value make an overall acquisition far less attractive, but at some point, I won't be surprised to see the IP hit the market to cover the wind down of the rest of the failing business.

While this could be make or break for Kodak, Apple generated $9.8B in cash flow from operations last quarter alone.