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Kodak reorganizes as two business units, sues Apple and HTC


Beleaguered imaging company Kodak, one of the most recognized names in the photography and film industry, has announced a broad new reorganization that shrinks the company from three business units to two in an effort to improve operational efficiency and cut costs. At the same time, Kodak is suing Apple (again) and smartphone maker HTC, claiming their mobile devices infringe on Kodak patents.

Kodak’s reorganization sees the company condensing from three primary business units—its Graphic Communications Group, Consumer Digital Imaging Group, and Film, Photofinishing, and Entertainment Group—into two very basic units: Commercial and Consumer. The commercial unit will be headed up by Philip Faraci, while the consumer unit will be lead by recently-promoted Laura Quatela—both will have the titles of president and chief operating officer, and will report to Kodak CEO Antonio Perez. The changes are effective as of January 1, and Kodak says it will change its financial reporting beginning this quarter to reflect the new structure.

“As we complete Kodak’s transformation to a digital company, our future markets will be very different from our past, and we need to organize ourselves in keeping with that evolution,” Perez said in a statement. “This new structure simplifies the organization, focuses it more precisely on our consumer and commercial customers, and puts the right people in place to capitalize fully on the tremendous technological capabilities of Kodak.”

Although Kodak shares surged on the news, industry watchers aren’t certain what operational efficiencies Kodak will derive from the reorganization—and the company’s announcement is notably short on specifics. Reports in the Wall Street Journal and elsewhere have reported Kodak is seriously considering filing for Chapter 11 bankruptcy protection in the event it is unable to raise money or sell off assets. Kodak has been working to sell a portion of its substantial imaging patent portfolio. The company has already sold off its sensor business, and recently announced a deal to sell off its Eastman Gelatine Corporation (gelatin is used in high-end movie film) to the Vion Food Group.

At the same time, Kodak is looking to flex the power of its patent portfolio, announcing that it has launched new litigation against both Apple and HTC, claiming their mobile imaging devices infringe on four Kodak patents having to do with transmitting images from a digital camera to a network destination, service provider, or email address. In addition, Kodak is accusing HTC of infringing on the same image preview patent that Kodak brought to bear on RIM and Apple in 2010—in July, the ITC found only limited infringement. Kodak has filed a complaint with the ITC asking that Apple and HTC be barred from selling infringing products in the United States; it has also filed suit in the U.S. District Court for the Western District of New York seeking to permanently bar Apple and HTC from infringement, as well as for the recovery of unspecified damages.

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