Court: United States Bankruptcy Court, S.D. New York; August 1, 2012; Us Bankruptcy; United States Bankruptcy Court
Eastman Kodak Company has filed a motion for summary judgment seeking declaratory and injunctive relief against Apple Inc. and FlashPoint Technology, Inc. Apple and FlashPoint claim inventorship rights under federal patent law and state law concerning patents owned by Kodak. Kodak argues that both companies were aware of its interests but failed to act in a timely manner, thus invoking the doctrine of laches and relevant statutes of limitations to bar their claims.
Kodak, along with affiliated companies, filed for Chapter 11 bankruptcy on January 19, 2012, and is continuing operations as debtors in possession. Kodak asserts its pioneering role in digital camera technology, having invested significantly in its development. Apple, a leading digital consumer products company, has had an interest in digital camera technology since at least 1994, particularly during its collaboration with Kodak. FlashPoint, spun off from Apple in 1996, inherited certain rights to digital imaging technology through a formal assignment from Apple.
The ownership of thirteen patents is in dispute, with Kodak listed as the owner of record for all of them. Both Apple and FlashPoint claim interests in ten patents (the "Jointly Disputed Patents"), while FlashPoint asserts rights to three additional patents (the "Additional Disputed Patents"). The Jointly Disputed Patents include several patents related to electronic cameras, detailing their titles, issuance dates, inventors, and Kodak's status as assignee.
U.S. Patent No. 6,441,854, titled “Electronic Camera with Quick Review of Last Captured Image,” was issued on August 27, 2002, listing Richard William Lourette, Michael Eugene Miller, Peter Fellegara, Linda M. Antos, and Robert H. Hibbard as inventors and Kodak as the assignee. The application was published on August 23, 2001. U.S. Patent No. 6,879,342, titled “Electronic Camera with Image Review,” was issued on April 12, 2005, with Michael Eugene Miller and Richard William Lourette as inventors, also assigned to Kodak, and is a division of application No. 08/769,573 filed on December 19, 1996. U.S. Patent No. 7,210,161, titled “Automatically Transmitting Images from an Electronic Camera to a Service Provider Using a Network Configuration File,” was issued on April 24, 2007, with Kenneth A. Parulski, Joseph Ward, and James D. Allen as inventors, and is a continuation of application No. 09/004,046 filed on January 7, 1998. U.S. Patent No. 7,453,605, titled “Capturing Digital Images To Be Transferred to an E-Mail Address,” was issued on November 18, 2008, with the same inventors as the 161 Patent, and is a continuation of application No. 09/821,152 filed on March 29, 2001, which itself continues application No. 08/977,382 filed on November 24, 1994. U.S. Patent No. 7,742,084, titled “Network Configuration File for Automatically Transmitting Images From an Electronic Still Camera,” was issued on June 22, 2010, with the same inventors as the 161 Patent, and is a continuation of application No. 09/783,437 filed on February 14, 2001, which is a division of application No. 09/004,046. U.S. Patent No. 7,936,391, titled “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, with the same inventors as the 084 Patent, and is a continuation of application No. 11/692,224 filed on March 28, 2007, continuing through prior applications back to No. 09/004,046.
Additionally, the following patents are noted: U.S. Patent No. 6,288,743, “Electronic Camera for Processing Image Segments,” issued September 11, 2001, inventor George E. Lathrop; U.S. Patent No. 6,542,192, “Image Display Method and Digital Still Camera Providing Rapid Image Display by Displaying Low Resolution Image Followed by High Resolution Image,” issued April 1, 2003, inventors Hideki Akiyama and Masaki Izumi; and U.S. Patent No. 7,508,444, “Electronic Camera with Quick View and Quick Erase Features,” issued March 24, 2009, with inventors Thomas A. Napoli, Masaki Izumi, Kyoicki Omata, Carolyn A. Bussi, and Clay A. Dunsmore, all assigned to Kodak.
From 1992 to 1996, Apple collaborated with Kodak on developing digital camera technologies under project code names Adam, Aspen, and Phobos. Kodak’s internal files reveal discussions on developing “burst” technology, and Apple presented the “Adam Project Technical Overview” to Kodak on November 24, 1992.
On January 25, 1993, Eric Zarakov, a project manager at Apple, communicated with David Lewis of Kodak regarding discussions held in December 1992 about digital camera technology, specifically the Adam project. Scott Fullam from Apple researched Kodak's digital camera patents in late 1992 and early 1993, focusing on various technical terms related to imaging technology. In March 1994, Kodak presented to Apple, highlighting its strengths in digital imaging and providing insights on Apple’s technology architecture, including a diagram similar to that in the 218 Patent, prepared by inventor Kenneth A. Parulski.
Subsequently, on December 20, 1994, Apple and Kodak entered into the 1994 Development Agreement to share patents and intellectual property for developing new camera products for the Aspen and Phobos projects. This agreement stipulated that each party retained ownership of their intellectual property while allowing modifications and adaptations, with a requirement to disclose any such changes and assign resulting intellectual property rights. Kodak terminated this agreement in 1996, during which several Disputed Patents were filed or issued. Apple cited the 335 Patent as prior art in various patents between 1996 and 2002, asserting that the patent prosecution was handled by external counsel without Apple’s direct involvement.
Following Apple's spin-off of FlashPoint in 1996, Kodak and FlashPoint entered into four agreements from 1997 to 2003 related to digital camera technology. The first was the 1997 Development Agreement, which outlined that FlashPoint would retain ownership of products it developed while providing software development services to Kodak. The second, the 1997 License Agreement, involved FlashPoint developing and licensing imaging software to Kodak.
Kodak agreed not to sue FlashPoint for patent infringement related to patents owned or obtained during the 1997 License Agreement, with this provision lasting until the last patent's expiration and surviving the agreement's termination. The 1997 License Agreement was set to last until December 1, 2001, four years post-shipment of certain cameras, or if terminated for cause. Subsequently, Kodak and FlashPoint entered the 1998 Development Agreement, effective November 5, 1998, outlining terms for software development and including a confidentiality clause protecting each party's Confidential Information, which encompassed all software licensed to Kodak. FlashPoint retained ownership rights to developed products unless otherwise stated. This agreement terminated on December 31, 2000, but obligations regarding confidentiality and ownership survived.
On June 5, 2003, Kodak and FlashPoint executed the 2003 Patent Agreement, where FlashPoint licensed all patents it owned as of that date to Kodak. This agreement acknowledged the prior termination of the 1997 License Agreement and included a release of claims between the parties under that agreement. It also contained a broad covenant from FlashPoint not to sue Kodak regarding the licensed patents. In June 2003, Kodak hired FlashPoint’s president and CEO, Stan Fry, as a consultant for its digital imaging strategy, with Fry asserting no specific Kodak patents were reviewed during his tenure. In August 2010, Kodak initiated contact with FlashPoint concerning a dispute with Apple over the 218 Patent, leading FlashPoint to assert potential inventorship and ownership claims to the patent. FlashPoint sought a standstill agreement from Kodak and Apple, which was finalized on September 21, 2010, suspending any limitation periods related to FlashPoint's involvement in the Kodak-Apple dispute. While there is disagreement over the termination date of this agreement, all parties concur that it remained in effect at least until March 8, 2011. FlashPoint cited multiple Jointly Disputed Patents, including the 218 Patent, as prior art in its own patents, disputing only the implication that such citations indicated reasonable notice of Kodak's claims to the patents.
Kodak developed a patent strategy starting in 2001 aimed at boosting revenue through litigation and licensing, initiating ten patent infringement lawsuits and three investigations with the U.S. International Trade Commission (ITC) since 2004 regarding seven Jointly Disputed Patents. Notably, a March 10, 2004 New York Times article highlighted Kodak's lawsuit against Sony, filed on March 4, 2004, in the Western District of New York, alleging infringement on multiple patents, including the 218 and 335 Patents. In this litigation, Sony issued subpoenas to Apple and FlashPoint in 2005, seeking documents related to specific projects that referenced the disputed patents. Kodak has also engaged in licensing its digital imaging patents, exemplified by a 2001 agreement with Olympus Optical Company.
In January 2010, Kodak filed a request with the ITC and a complaint in New York against Apple for infringement of the 218 and 335 Patents. Following these actions, Apple conducted an internal investigation into its past collaborations with Kodak and claimed that Kodak had wrongfully obtained patents using Apple’s disclosed intellectual property. Subsequently, on August 25, 2010, Apple filed a complaint in California seeking a declaratory judgment against Kodak for breach of the 1994 Development Agreement, among other claims. These allegations were also raised as defenses in the ITC Proceedings. After Kodak removed the California case to federal court and secured a transfer to New York, Apple amended its response in the New York action to include counterclaims, effectively consolidating the issues from the California Complaint. An Analyst Report from March 2001 indicated Kodak's recognition of holding key patents related to digital cameras and online imaging services relevant to the market.
The Analyst Report examines Kodak's recent announcements and the market implications of its digital camera patents, identifying the 335 Patent as a key patent among five, while not listing the other Disputed Patents. It suggests that FlashPoint's licensing agreement with Kodak could protect it from Kodak's enforcement actions. Apple has obtained a stay in the W.D.N.Y. Action while awaiting decisions from the ITC Proceedings, which have ruled the 218 Patent invalid due to obviousness. Kodak filed for Chapter 11 bankruptcy on January 19, 2012, planning to sell over 1,000 digital imaging patents, including the Disputed Patents. Apple appeared early in the bankruptcy case, objecting to financing motions on the grounds of ownership of the 218 Patent and potentially others, which was resolved through clarifying language in the financing order. Apple’s motion to lift the stay to transfer the W.D.N.Y. Action was denied. FlashPoint claimed rights to the 218 Patent at a March 2012 hearing, asserting derivative rights from Apple. Neither party had initially claimed rights to the other Disputed Patents until Apple formally asserted ownership of nine additional patents in March 2012. FlashPoint subsequently claimed ownership of all ten Jointly Disputed Patents and additional ones but did not formally assert these claims until June 2012. Kodak was aware of Apple's contestation over at least one Disputed Patent due to ongoing legal actions.
Kodak filed a motion on May 14, 2012, seeking a court order to establish that Apple and FlashPoint had no ownership claims to certain Disputed Patents and to authorize a sale of these patents free of such claims. Apple opposed this motion and sought to withdraw the bankruptcy reference, with FlashPoint joining in the objection. The court denied Kodak's motion, instructing it to initiate an adversary proceeding for resolution. Subsequently, Kodak filed an adversary complaint on June 18, 2012, requesting a declaratory judgment that the Disputed Patents were part of the bankruptcy estate and could be sold free and clear of claims from Apple and FlashPoint. Kodak also sought injunctive relief to prevent interference from Apple and FlashPoint regarding the sale.
In response, Apple and FlashPoint filed answers and renewed their motions to withdraw the bankruptcy reference. Apple raised several affirmative defenses, disputing Kodak's claims and asserting that Kodak's failure to disclose the patents barred its reliance on laches. Apple also counterclaimed for correction of inventorship and alleged various breaches of contract and business conduct. FlashPoint similarly objected and asserted affirmative defenses, claiming ownership of the patents and counterclaims for declaratory judgment and damages for breach of contract and other claims against Kodak. Additionally, FlashPoint cross-claimed against Apple, contesting its standing to assert ownership rights.
Kodak filed a summary judgment motion on June 29, 2012, arguing that Apple’s and FlashPoint’s claims were barred by laches and statutes of limitations. Apple and FlashPoint contested this, asserting they were unaware of their claims until the limitations periods had run and that equitable tolling applied. The court held oral arguments on July 24, 2012, and on July 26, 2012, the District Court denied the motion to withdraw the reference to allow the bankruptcy court to proceed with the case.
Summary judgment under Rule 56 is appropriate when the movant demonstrates no genuine dispute regarding material facts and is entitled to judgment as a matter of law. The burden lies with the moving party to prove the absence of genuine issues, with all inferences viewed favorably for the opposing party. A fact is considered "material" if it could influence the outcome based on applicable substantive law, and summary judgment is inappropriate if a reasonable jury could rule for the nonmoving party.
In the case of Eastman Kodak Co. v. Apple Inc., two types of claims are asserted by Apple and Flashpoint: inventorship claims, which aim to correct patent office records under 35 U.S.C. § 256, and ownership claims seeking damages for property rights appropriation and related torts. Federal law governs the laches issues, while California law applies to state law claims. Kodak argues for summary judgment based on the laches doctrine affecting the inventorship claims and statutes of limitations barring state law claims.
Laches, as defined by the Federal Circuit in A.C. Aukerman Co. v. R.L. Chaides Construction Co., involves two components: unreasonable delay in filing suit after the plaintiff knew or should have known of the claim, and prejudice to the defendant resulting from this delay. In Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., the court held that the delay period starts from when the claimant had actual notice or should have reasonably inquired about the claim. A plaintiff is charged with knowledge they could have obtained through inquiry if the known facts warranted such inquiry.
To establish laches, it must be shown when Apple and FlashPoint were aware of or should have inquired into Kodak's claim regarding the Disputed Patents, and that this delay caused material prejudice, which can be either evidentiary or economic.
Evidentiary or 'defense' prejudice occurs when a defendant cannot adequately present their case due to lost records, deceased witnesses, or unreliable memories, affecting the court’s ability to assess facts. Economic prejudice involves losses due to delays in legal action that could have been mitigated by earlier suit, impacting the defendant's economic position, not just liability findings. The mere passage of time does not alone constitute laches; however, if a plaintiff waits over six years after having inquiry notice of an inventorship claim, a rebuttable presumption of laches arises. Once this presumption is established, defendants can prevail even without demonstrating prejudice. Plaintiffs may counter this presumption by showing the delay was excusable or that the defendant suffered no prejudice. The burden of proving the laches defense lies with the defendant, regardless of the plaintiff's delay. Additionally, a patentee can avoid laches if they prove the defendant engaged in misconduct that contributed to the delay, requiring evidence of significant misconduct altering the equity balance. Simple errors, such as failing to name an inventor, do not constitute unclean hands. Ultimately, laches is an equitable doctrine, necessitating courts to consider all relevant facts and equities. Kodak's argument that Apple should have constructive knowledge of its patents is overly broad, as constructive notice through publication does not suffice for assessing delay reasonableness. The laches period may start before patent issuance if the inventor had actual notice of the application, as supported by various court rulings.
A California cause of action based on a patent can arise before the patent is issued, emphasizing that the issuance date is relevant but not conclusive for determining when a party has notice of inventorship claims. The public nature of patent litigation and licensing can create an inquiry notice, where reasonable investigation could have revealed potential claims. This principle was illustrated in two Federal Circuit cases involving inventor Wanlass. In *Wanlass v. General Electric Co.*, the court affirmed summary judgment for laches against Wanlass, who failed to investigate GE's infringing activities for over a decade. The ruling highlighted that the defendant’s marketing and sales activities created a duty for Wanlass to investigate, and his inaction was unreasonable given the ease of testing GE's products. Conversely, in *Wanlass v. Fedders Corp.*, the Federal Circuit vacated a laches ruling, noting insufficient evidence of Fedders' activities and questioning whether it was reasonable to expect Wanlass to test all air-conditioner compressors. The case was remanded for further evidentiary consideration.
Pervasive, open, and notorious activities indicating possible patent infringement create an obligation for a patent owner to conduct reasonable inspections of potentially infringing technology, as established in cases like General Electric and Fedders. The scope and frequency of such inspections depend on cost and difficulty. In the context of the 335 Patent, issued on February 20, 1996, Kodak argues that Apple had inquiry notice of the patent and its inventorship claims over six years before filing a claim in March 2012. This assertion is supported by Apple's repeated citation of the 335 Patent in its own patent applications, a 2004 New York Times report on Kodak's litigation against Sony regarding digital imaging patents, and a 2005 subpoena served to Apple related to that litigation. The court cites Expert Microsystems, where a summary judgment was granted based on laches because the plaintiff acknowledged having read the patents in question and thus should have investigated further regarding his inventorship claim. The 335 Patent's first page describes technology relevant to a "burst" mode, which Apple discussed with Kodak in 1992. The court highlights the inconsistency in Apple’s position, noting that Apple’s attorneys had sufficient knowledge of the 335 Patent to cite it as prior art, suggesting they should have been aware of its contents related to the claimed burst invention.
Apple argues that it cannot be charged with inquiry notice of the 335 Patent due to the involvement of outside counsel in preparing the patent applications. However, under California Civil Code § 2332, a lawyer's knowledge is imputed to their client, meaning both the principal and agent must be aware of what either knows and should communicate to each other in good faith. Kodak claims Apple had inquiry notice of the 218 Patent based on several undisputed facts:
1. Apple contended that a 1994 presentation included alternatives to camera architecture it disclosed to Kodak, which Kodak recognized as Apple's ownership.
2. In 1992 and 1993, Apple searched Kodak's patents related to digital imaging technology and exchanged technical information with Kodak.
3. Apple and Kodak entered into a 1994 agreement for the Aspen and Phobos camera projects.
4. Kodak engaged in open licensing and litigation regarding its digital imaging patents, evidenced by a 2001 Analyst Report on Kodak's aggressive patent strategy and a 2004 New York Times article discussing litigation with Sony.
Kodak asserts these events should have prompted a reasonable person to investigate further regarding inventor-ship claims. The technology related to the 218 Patent overlaps with that of the Aspen Project, which both parties are currently litigating over. Kodak references the case of Bd. of Trustees of the Leland Stanford Jr. Univ. v. Roche Molecular Sys. Inc., where a party was held to have known about ownership claims due to a related presentation. Although the facts in Roche are stronger, Apple was aware of Kodak's access to Aspen technology and the collaborative nature of their 1994 agreement aimed at developing the Aspen project. Apple’s argument regarding the lack of industry practice to monitor competitors' patent activities does not negate the implications of the substantial evidence of Kodak's patent activity over the years.
Apple's assertion that it can disregard Kodak's established patent policy and multiple lawsuits against third parties for nearly a decade without inquiry notice is rejected. The Court finds that Apple had a clear duty to investigate Kodak's patents well before Kodak filed a patent infringement lawsuit in 2010. Accepting Apple's position would undermine the principle of laches, which requires parties to act on their rights in a timely manner.
Apple's claim of inequity due to Kodak's alleged breach of the 1994 Development Agreement does not significantly alter the equities in Apple's favor, as a breach does not constitute the egregious conduct necessary to invoke the unclean hands doctrine. Kodak argues that Apple’s unclean hands claim is circular; if Kodak prevails on the inventorship claim, it negates the basis for the unclean hands argument.
Regarding the Miscellaneous Patents (391, 084, 605, 161, 342, 854, 703, and 406 Patents), Kodak contends that Apple should have been on inquiry notice of its claims as early as March 16, 2006, due to public information and Kodak's active licensing and litigation. However, the Court finds insufficient evidence to establish that Apple had constructive knowledge or a duty to investigate these patents prior to the March 2012 letter asserting inventorship. Although Kodak was engaged in extensive licensing and litigation activities, the evidence does not indicate that Apple had specific reasons to investigate the Miscellaneous Patents based on the public information available.
Kodak contends that the Sony Litigation involved two parent patents related to four Miscellaneous Patents, but there is a lack of evidence linking the camera projects mentioned in the Sony Subpoena to these Miscellaneous Patents. Some patents were issued within six years of 2012, and based on the current record, it cannot be determined that Apple knew or should have known about its inventorship concerning these Miscellaneous Patents. Consequently, Kodak's motion for summary judgment based on laches is denied regarding these patents, with the option to renew on a more comprehensive record.
In terms of laches, a party must demonstrate both unreasonable delay and resulting prejudice. Kodak has shown unreasonable delay by Apple only concerning the 335 and 218 Patents, and prejudice can be economic or evidentiary. Kodak argues economic prejudice due to its bankruptcy status and the need to sell contested patents. Apple counters that Kodak has profited during the delay, a claim rejected by courts, which state that financial success does not negate economic prejudice. Kodak is undergoing Chapter 11 reorganization, required to monetize its patent portfolio under Bankruptcy Code § 363. Apple has opposed Kodak's patent sales throughout the proceedings. If Apple's late claims are not barred, Kodak would face challenges in protecting its interests in the 218 and 335 Patents during the sale process, potentially jeopardizing its economic survival. The 218 and 335 Patents are deemed critical to Kodak’s digital imaging portfolio, and if Apple’s claims proceed, Kodak may need to seek alternative funding strategies.
If Apple had initiated its claims earlier, Kodak could have adjusted its Chapter 11 strategy to address the potential issues concerning the title of the 218 and 335 Patents, establishing a basis for economic prejudice. Kodak asserts it faces evidentiary prejudice because it needs to find and engage the inventors of the Disputed Patents, specifically Kenneth A. Parulski, who has retired and lacks a consulting agreement ensuring his availability. Apple contends that Kodak cannot demonstrate evidentiary prejudice since Parulski and two other inventors are represented by Kodak's counsel in different litigation, and Kodak has not identified any unavailable witnesses. However, the potential availability of a key witness does not negate the reality that a two-decade delay in pursuing rights likely results in faded memories. Courts have recognized that even shorter delays can lead to prejudice in litigation. Based on the circumstances, Kodak has indeed suffered evidentiary prejudice in defending against Apple's claims related to the 218 and 335 Patents due to Apple's lengthy delay.
Regarding FlashPoint's inventorship claims, similar considerations apply, but distinct factual differences must be noted. FlashPoint points out that a 1997 Licensing Agreement with Kodak includes a broad covenant not to sue for patent infringement, which does not serve as a defense against Kodak's laches argument regarding inventorship disputes. Additionally, although FlashPoint received portions of Apple's digital imaging business, it has not obtained a copy of the 1994 Development Agreement between Kodak and Apple, which remains confidential. Any inventorship claims FlashPoint may have related to this agreement are limited to Apple's rights and subject to the same deficiencies as Apple's claims. Furthermore, Kodak and FlashPoint had several agreements from 1997 to 2003 regarding digital software, and FlashPoint suggests these, along with Kodak's retention of its CEO as a consultant, may have equitably tolled the time for pursuing inventorship claims.
FlashPoint has invoked the doctrine of equitable tolling without sufficient explanation or supporting authority, raising questions about its obligation to investigate Kodak's claims of sole patent ownership in digital camera technology. Although there was a strong relationship between the two companies, FlashPoint did not review specific patents during its engagement. A standstill agreement between Kodak and FlashPoint, effective from September 21, 2010, until March 8, 2011, tolled any time-related defenses to FlashPoint's claims; however, Kodak contends that the agreement did not extend beyond that date, while FlashPoint argues it continued until Kodak's bankruptcy filing on January 19, 2012. Regardless, the length of the standstill period is deemed irrelevant to the Court's decision on this matter.
FlashPoint claimed inventorship of several patents, including those also claimed by Apple, with the first assertion made during a court hearing on June 13, 2012. The remaining disputed patents were formally addressed in court filings on June 25, 2012. Kodak argues that FlashPoint had inquiry notice of its claims for over six years, citing various sources of constructive knowledge, including analyst reports and articles. However, the Court emphasizes that mere constructive notice cannot replace the need for a reasonable inquiry into patent claims. Kodak failed to demonstrate that a reasonable investigation would have revealed the specific patents, nor did it substantiate its claims regarding the timing of patent issuance in relation to FlashPoint's assertions. Furthermore, the existing agreements between Kodak and FlashPoint do not excuse FlashPoint's duty to investigate patent ownership claims, as collaboration typically increases awareness of each party's activities in shared fields of interest.
FlashPoint asserted inventorship claims related to the 218 Patent during a March 8, 2012 hearing, while claims for the other four patents (335, 406, 703, and 854 Patents) were made in a June 13, 2012 hearing, with legal action commencing on June 25, 2012. Evidence indicates FlashPoint cited these patents as prior art in its own applications, specifically referencing the 335 Patent in a 1996 application and others in a 1998 application. This prior art citation typically places an entity on inquiry notice regarding inventorship claims, establishing a presumption of laches due to the delays in asserting claims, which supports Kodak’s entitlement to summary judgment on laches.
Kodak also seeks summary judgment on state law claims from Apple and FlashPoint, arguing they are barred by statutes of limitations, with a maximum period of four years. Under California law, a cause of action accrues when all elements are complete, and is considered asserted upon filing a complaint. The discovery rule may postpone accrual until a plaintiff discovers or has reason to discover the cause of action, which requires specific pleading of the time and manner of discovery and inability to detect the cause earlier despite due diligence. A plaintiff is deemed to have reason to suspect an injury when there is a hint of wrongdoing, necessitating a reasonable investigation into the matter, with the plaintiff charged with knowledge that could have been uncovered.
The accrual of state law claims for both Apple and FlashPoint hinges on when they knew or should have reasonably known about these claims. For Apple, the findings regarding its "ownership" claims align with its inventorship claims, revealing that Apple waited over six years to assert its rights concerning the 335 and 218 Patents, exceeding California's limitation periods, thus rendering these ownership claims untimely. In contrast, Apple initiated its investigation into remaining patents following Kodak's lawsuits in 2010, and Kodak has not shown an earlier accrual date for these, making them timely under California statutes.
FlashPoint's state law claims are treated similarly to its federal inventorship claims, with the date of counterclaims being June 25, 2012, and the accrual dates for its first five patents corresponding to when FlashPoint referenced the Kodak patent as prior art in its applications. Consequently, FlashPoint's claims regarding these patents are deemed untimely. However, for the remaining patents, Kodak has not provided sufficient evidence to establish that FlashPoint had an earlier duty to investigate or that the patents were issued long enough ago for the limitations periods to have expired.
The court partially grants Kodak's motion for summary judgment, allowing for renewal on a more comprehensive record. Kodak's counsel is tasked with settling an order with a notice period of three days. The parties are also instructed to clarify whether the court can issue a summary judgment directly or if findings of fact and conclusions of law are required for District Court entry, particularly in light of their earlier assertions influenced by the Stern v. Marshall decision. Lastly, the document briefly defines "divisional application" and "continuation" in the context of patent law.
Flashpoint's outside counsel obtained the 1994 Development Agreement under a confidentiality agreement, which prohibits sharing its contents with Flashpoint. In the ITC Proceeding, ALJ Paul Luckern issued findings on January 24, 2011, declaring the related patent invalid due to obviousness. The ITC reviewed this decision on June 30, 2011, and remanded it for further analysis of the patent and secondary considerations of nonobviousness. ALJ Pender reaffirmed the obviousness finding on May 21, 2012, and the ITC upheld this on July 20, 2012. Notably, the ITC's determinations are not binding in subsequent litigation, as established in Texas Instruments, Inc. v. Cypress Semiconductor Corp.
On June 11, 2012, Kodak motioned to set procedures for selling its patent portfolio, which the Court approved on July 5, 2012, scheduling a final hearing for August 20, 2012. Apple and Flashpoint submitted responses in the District Court as per Local Bankruptcy Rule 5011-1, filing related documents on the adversary proceeding docket. The Roche Court dismissed the notion that a patent ownership cause of action only accrues upon patent issuance, clarifying that ownership claims can arise before issuance under certain conditions. The Federal Circuit's approach to laches applies similarly to both infringement and inventorship claims, though the laches period for infringement does not commence until the patent issues. Additionally, the Federal Circuit's decisions in related cases were made by different majorities, highlighting differing judicial perspectives on the responsibilities of patentees regarding potential infringements.
The dissenting judge in Fedders challenged the majority's conclusion regarding the lack of sufficient facts to determine Wanlass's scope of inquiry, arguing that no reasonable fact finder could believe it was acceptable to forgo any investigation of motors for over a decade, especially given the ease and importance of product testing. In a related case, Apple cited the 335 Patent in its first patent application, which led to patent 5,867,214, filed on April 11, 1996. Apple asserted its claim of inventorship for the 335 Patent on March 16, 2012, resulting in a delay of over 15 years that raises a presumption of laches regarding its claim. Apple's inaction is suggested to align with Flashpoint's argument that Apple assigned rights to the Disputed Patents to Flashpoint. Various California statutes outline the limitations periods for different claims: four years for breach of contract, three years for conversion, four years for unfair competition, and two years for breach of confidence. Unlike laches, Kodak can successfully argue the statute of limitations without demonstrating prejudice. A cause of action is deemed asserted upon filing a complaint. The 444 Patent was issued on March 24, 2009, and Kodak acknowledged during oral arguments that Flashpoint's state law claims are not barred by applicable statutes of limitations.
