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Java Infringes Kodak Patents, Jury Decides

Times Staff Writer

The Java programming language, one of Sun Microsystems Inc.'s best-known and most widely used products, infringes patents held by Eastman Kodak Co., a federal jury decided.

The three patents at issue deal in large part with object modules, a type of program that identifies data as they come into a computer and determines whether they are text or graphics, for example. Kodak, which took over ownership of the patents in 1997 when it bought the software business of Wang Laboratories Inc., argued that Java operates in a similar way.

A jury in Kodak’s hometown of Rochester, N.Y., agreed Friday.

Sun, which makes computers that run corporate networks, denied Monday that it infringed Kodak’s patents.

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“We believe we have strong grounds for appeal,” said May Petry, a spokeswoman for the Santa Clara, Calif., company.

Java allows programmers to create software that is compatible with many types of operating systems for personal computers, cellphones and other digital devices. Sun has promoted Java heavily because it frees people from having to use PCs that operate on Intel Corp. chips and Microsoft Corp.'s Windows.

Kodak has asked the court for more than $1 billion in licensing fees and damages -- a figure that represents about half of the operating profit Sun expected to earn by selling server computers with Java between 1998 and 2001, according to court documents.

Sun said in court documents that Kodak was entitled to a licensing fee of no more than $25 million. The damages phase of the trial is scheduled to begin this week.

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Analysts said that even if Sun eventually had to pay $1 billion, it wouldn’t do much damage to the company’s bottom line.

“I wouldn’t expect this to be a major disruption to their business,” said analyst Brent Bracelin of Pacific Crest Securities in Portland, Ore., who noted that the company has $7 billion in cash and other assets.

Java was not a direct moneymaker for Sun, Bracelin said. The company’s marketing strategy was to give Java software away, “then they would sell hardware that could all work with Java-enabled devices,” he said. Kodak’s proposed settlement, which would give up its future claims to Java, would not interrupt the strategy.

In the meantime, Sun has more pressing problems than the patent suit. For the fiscal year that ended June 30, the company posted a net loss of $388 million on declining sales. In March, Sun said it would eliminate 3,300 jobs as part of an ongoing restructuring.

“The turnaround and growth of the company is what they have to be focused on now,” Bracelin said.

Sun shares rose 5 cents Monday to $4.24 on Nasdaq. Kodak stock rose 79 cents to $33.49 on the New York Stock Exchange.

Associated Press was used in compiling this report.


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