Kodak, the US-based camera-maker, claims that Apple’s iPhone and Research In Motion’s Blackberry both use technology to preview pictures that infringes on existing Kodak patents, and is demanding that the courts stop the devices being shipped until the two firms start shelling out royalties. Apparently most phone-makers have already agreed to pay up – but despite years of negotiations, Apple and RIM have refused to play ball. On the face of it, Kodak appears to have a pretty good case – and in times of recession, it’s no surprise to see big companies fighting tooth and nail over intellectual property…
The actual bit of technology Kodak is talking about is far too complicated for our meagre little brains to understand, but suffice to say that it’s something to do with the digital camera that’s built into the Apple and RIM devices (in fact, in Apple’s case, it’s actually three things to do with the camera). At the back end of last year, a court ruled that the technology in Samsung’s cameraphones infringed on Kodak’s patents, and the Korean firm subsequently agreed to start paying royalties (big of them). And around 30 companies are also using the technology under license, including LG, Motorola, Nokia and Sony Ericsson. So it seems fair to say that Kodak is generally accepted to own the intellectual property that underpins this technology.
We have no idea about the technicalities of this case. But Kodak’s basic point seems not unreasonable. ‘Kodak has a long history of digital imaging innovation, and we have invested hundreds of millions of dollars creating our industry-leading patent portfolio,’ its chief IP officer pointed out today. If firms can’t rely on patents to protect their ideas from covetous rivals, it removes the incentive for them to invest. And although the company clearly realises that it might not be very popular if people suddenly can’t get their hands on a new iPhone, it insists its ‘primary interest is not to disrupt the availability of any product but to obtain fair compensation for the use of our technology.’ Nokia, which is currently pursuing Apple for various other patent infringements, would doubtless agree.
But the timing of this move is also interesting. In a recession, it’s important to be sweating your assets as much as possible – and for Kodak, which has become a shadow of its former glorious self since the demise of 35mm film, intellectual property is more or less all it's got left. Taking on Apple and RIM in court would be an expensive business (though we’ll be amazed if it gets that far), but the huge success of these devices means Kodak is currently losing out on a fortune in royalties. That’s never a good thing, and particularly not at the moment.
In today's bulletin:
iPhone and Blackberry face a Kodak moment in court
Intel chipper as it smashes forecasts
Focus on people not targets, managers told
Are SMEs failing to give banks the right information?
The MT Prize Quiz 2009 - The Answers