March 9, 2004 4:35 PM PST

Kodak sues Sony over digital cameras

Camera maker Eastman Kodak has launched a federal lawsuit against Sony, saying its rival's digital cameras and camcorders infringe on Kodak patents.

The suit, which seeks unspecified damages and an injunction barring further infringement, was filed late Monday in a U.S. district court in Rochester, N.Y., Kodak spokesman Gerard Meuchner said. The suit alleges that various Sony products infringe on 10 Kodak technology patents that were issued between 1987 and 2003, Meuchner said.

"Sony has not violated any Kodak patent relating to digital imaging and will vigorously defend any allegations made in this regard," the company said in a statement. A Sony representative declined to comment further.

It appears that Kodak may have more than just Sony in its crosshairs.

Meuchner said the camera maker is interested in licensing its technology to companies that may be using its intellectual property but declined to name those manufacturers or say whether it is in discussions with them.

"We cannot discuss talks we may or may not be having with others," Meuchner said, adding that he also cannot speculate on whether more suits may be in the offing.

IDC senior analyst Chris Chute said Kodak is probably looking to get license revenue from other camera makers as well.

"I think it would be foolish to think they are not going around and seeing what other alleged infringements there are," Chute said.

Meuchner noted that Kodak has more than 1,000 patents worldwide that relate to digital cameras, including patents covering CMOS (complementary metal-oxide semiconductors) and CCD (charge-coupled device) image sensors, as well as emerging technologies such as cell phone cameras.

"We believe we have a premier position in digital-camera patents," Meuchner said.

Kodak's suit against Sony was filed after three years of negotiations failed to produce an accord, Meuchner said. "The discussions haven't led to a suitable license agreement, so we've taken this action to protect our intellectual-property rights," he said.

Kodak has secured licenses from at least two digital camera makers, Olympus and Sanyo, which got licenses for the company's technology in 2001. Sanyo's license came as part of a legal settlement with Kodak, which had sued Sanyo and several other companies in March 2001.

Rochester, N.Y.-based Kodak has been struggling to transform itself amid a massive shift in the imaging market from traditional to digital technology. It has announced plans to rapidly scale back its traditional film business and is trying to build up efforts in new digital areas, such as inkjet printing.

Earlier this week, Kodak announced that it was buying out NexPress Solutions, a digital press operation that was a joint venture between Kodak and Heidelberger Druckmaschinen.

In January, Kodak said it would cut 20 percent of its work force, as it tried to reorganize its business.

Chute said Kodak appeared to be making progress in shifting its business and mind-set toward the digital world, which makes it a somewhat unlikely time to revive a licensing push.

"In a way, it was kind of surprising that they are going down this road again," Chute said. "It makes me wonder what's going on in the background."

However, Sony and Kodak have been in a fierce battle for market share, Chute said, with the two companies neck and neck in the battle for the top spot, in terms of U.S. market share last quarter. The digital-camera market has continued to grow significantly since Kodak's legal efforts of 2001, with the market also moving into new areas, such as camera phones and hybrid devices that act as both digital still cameras and camcorders.

Chute said he doubted that the lawsuit will tarnish Sony's image in consumers' minds, though.

"I don't really think it will hurt Sony," Chute said.

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Kodak DOES have technology on digital cameras!
If anyone doubt it just take a look to their line
of professional digital cameras.
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