Eastman Kodak Co. won the first round of a Java lawsuit against Sun Microsystems Inc. that could impact Suns bottom line and possibly threaten Microsofts .Net platform.
A Rochester, N.Y., jury found Friday that Sun infringed on Kodaks patents when it created Java and released the technology in 1995. Kodak is based in Rochester and is the citys largest employer.
At issue are three patents that Kodak inherited when it acquired Wang Laboratories Inc. in 1997. Kodak claims that Java infringes on parts of the three patents.
“Kodak has made and continues to make substantial technology investments to ensure high-quality products,” said James Blamphin, a spokesman for the company. “We are pleased that the court has validated our intellectual property rights protecting these valuable innovations for the benefit of our customers and shareholders.”
One of the patents at issue indicates a means by which “two processes that are to cooperate in a data-interchange operation identify each other, and to identify data formats they have in common.” And some observers say that, taken broadly, the same patents might be used to claim infringement by Microsofts .Net platform.
Sun denied that it infringed on the Kodak patents during a three-week trial, and it will likely appeal the judgment. But this week, the trial will enter the penalties phase, where both sides will argue over what penalty should be imposed on Sun. Kodak is seeking more than $1 billion in damages.
Sun intends to vigorously defend its intellectual property, company spokeswoman May Petry said in a statement. “We are disappointed with the federal jurys decision and are examining our options as we prepare for the liability phase of a two-phase jury trial,” the statement said.
“We intend to put on a vigorous defense and hope to reach a decision that will be in the best interest of shareholders, customers and Sun. We will also continue to vigorously protect and defend our IP when appropriate.”
Rick Ross, president of Javalobby.org, said the case is far from over. “I was surprised that it was litigated so quickly, but maybe the real battle will happen in the court of appeals,” said Ross, who testified for Sun in its antitrust suit against Microsoft that was settled earlier this year.
“And if Kodak prevails, then Kodak could possibly become the new Unisys, who held the entire Internet potentially liable for its patents on the LZW [Lempel-Ziv-Welch] compression that was used in the GIF image format.”
Added Ross: “This could also get a public response similar to the Eolas patent case against Microsoft, because now the public has tuned in to the ominously broad scope of the Kodak claims, and we may see a general effort to demonstrate prior art and attack the validity of the Kodak patents in question.”
Sources said both sides of the suit have been meeting with the judge to determine how the next phase will play out.
Kodak said it placed the value of its damages at more than $1 billion because that represents half of Suns operating profit from systems sold between 1998 and 2001. The company is not seeking any kind of ownership claims regarding Java.
“We use Java and we will continue to use Java,” Blamphin said.
Thomas Murphy, an analyst with The META Group Inc., based in Stamford, Conn., said Suns performance in the case was baffling. “I cant believe that Kodak won this,” Murphy said. “It baffles me that Sun couldnt—and I dont know case details—show that there was prior art that would invalidate this patent.
“Software patents are inherently problematic, and if this holds, it will create problems for several other technologies other than Java,” he said. “Smalltalk used basically the same system that Java does with byte code being run by a VM [virtual machine], and thus one piece of software was asking for help from other systems. The ability for Kodak to purchase a patent like this so far outside of their core business and go after things is insane.
“I cant imagine, beyond the battle that will go on in the next phase, that there wont be appeals,” Murphy said. “In addition, Sun should be leveraging the Microsoft legal team because it will set a precedent to go after Microsoft on .Net.”
He added that “it will be interesting to see the line on how much Sun should pay,” considering that the initial amount specified has “nothing to do with Java.”
“We may get more insight into how much money does Sun derive from Java because if there is any profit pool to split, that would be the more correct one,” Murphy said. “If this holds, it could also cause a big shift in the Java market because it would say that the underlying technology may not be free and clear, and there could be an ongoing license cost that Sun will have to pass along to users.”