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Sony, Kodak Solve Dispute
AP Business Writer

Eastman Kodak Co. said Wednesday it has ended a long-standing patent dispute with Sony Corp. over digital-camera inventions dating back to 1987 and entered a cross-licensing deal giving the companies access to each other's patents.

The photography company also said it has signed a cross-license agreement with cell-phone maker Sony Ericsson Mobile Communications AB, a joint venture of Sweden's LM Ericsson and Sony, the Japanese electronics and entertainment company.

The agreements, signed Friday, are royalty bearing to Kodak, the company said, but further financial terms of the deals were not disclosed.

"It made sense to conclude the patent litigation and separately enter into this broad technology cross-license agreement," Kodak spokesman David Lanzillo said. "It does allow each company broad access to the other's patent portfolio."

The deal "essentially tells me that Kodak more or less won," said Ulysses Yannas, a broker with investment firm Buckman, Buckman & Reid in New York. "It means you collect some money up front and then you keep getting royalties on the use of your technology."

In a federal lawsuit filed here in March 2004, Kodak alleged that Sony infringed on 10 patents for digital camera inventions issued from 1987 to 2003 involving digital and video technologies such as image compression and digital storage.

The lawsuit named Tokyo-based Sony and two U.S. subsidiaries, Sony Corp. of America and Sony Electronics Inc., which is based in San Diego.

Sony countersued three weeks later, alleging that Kodak violated 10 patents covering digital camera features, from an indicator that displays the number of pictures taken to an electronic shutter with adjustable speeds.

A photographic film icon during much of the 20th century, Kodak has struggled to reap profits in recent years even while becoming a major player in digital photography and commercial printing.

It is currently exploring a partnership, an outright sale or other options for its 111-year-old health imaging business. The unit accounted for nearly one-fifth of Kodak's overall sales of $14.3 billion in 2005.

The company that pioneered mass-market photography created the world's first digital camera in December 1975 - an 8-pound (3.6-kilogram), toaster-size contraption that captured a black-and-white image on a digital cassette tape at a resolution of .01 megapixels.

It has since amassed more than 1,000 digital-imaging patents - and almost all of today's digital cameras rely on those inventions. But analysts say Kodak's transition to digital was hindered at the start of the 21st century by a reluctance to phase out celluloid film, its gravy train for decades.

As Kodak enters a fourth year in its historic makeover, it has accumulated $2 billion (euro1.5 billion) in net losses over the last eight quarters and piled up $2.6 billion (euro1.97 billion) in restructuring charges since January 2004. Its losses narrowed to $37 million (euro28 million) in the July-to-September period as digital profits surged above $100 million (euro75.5 million).

In trimming manufacturing operations and axing up to 27,000 jobs, Kodak's global work force has dipped below 50,000 from a peak of 145,300 in 1988.

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