There has today been an escalation of the patent war between Kodak and Sony, in what looks like a tit for tat response, Sony has filed a suit against Kodak alleging that they infringed 10 of Sony's patents related to digital cameras. "It's a very important technology resource for Sony and we feel that if any company is in infringement of them, we will take action," said Sony spokesman Gerald Cavanagh in Tokyo. Sony's latest suit involves patents related to electronic shutters for CCD's. Sony said its action was not a counter-suit and involved different patents than the suit filed by Kodak.

Press Release:

Sony Sues Kodak Over Digital Camera Patents

TOKYO (Reuters) - Japan's Sony Corp said on Thursday it had filed suit against film giant Eastman Kodak Co in the United States, intensifying the fight between the two companies in the cutthroat digital camera market.

Sony, one of the largest makers of digital cameras with a global market share of around 20 percent, said in a suit filed in a U.S. federal court in New Jersey on Wednesday evening that Kodak infringed 10 of its patents related to digital cameras.

"It's a very important technology resource for Sony and we feel that if any company is in infringement of them, we will take action," said Sony spokesman Gerald Cavanagh in Tokyo.

Sony, the maker of CyberShot digital cameras, is seeking unspecified damages and an order for Kodak to halt what it called further acts of infringement.

The move follows a suit filed by Eastman Kodak last month alleging that Sony infringed 10 of the U.S. firm's patents related to digital photography, such as reproducing video images, printing, previewing and storing images.

Sony said its action was not a counter-suit and involved different patents than the suit filed by Kodak.

Kodak spokesman Gerard Meuchner declined to comment, saying he was unaware of the suit. Kodak has licensing agreements with rival camera makers Olympus Corp and Sanyo Electric Co Ltd.

Kodak had said it filed its suit after the two sides failed to reach a suitable licensing pact.

UFJ Tsubasa analyst Kazuya Yamamoto said: "The digital camera business is very competitive and with prices falling sharply, profitability is becoming difficult and so it is natural for companies to value their technology patents."

Last year, a U.S. court ruled that Sony infringed on patents held by St. Clair Intellectual Consultants Inc for a technology pertaining to the storage of digital pictures. Tokyo-based Sony settled out of court with the U.S. patent-licensing company.

Sony's latest suit involves patents related to electronic shutters for charge-coupled devices, chips used as "electronic film" in which it holds a leading market position.

Shares in Sony ended down 1.83 percent at 4,280 yen in Tokyo, versus a 0.27 percent fall in the benchmark Nikkei average.

DIGITAL SHIFT

Kodak, the world's top maker of photographic film, is undergoing a tough transition toward digital products amid a decline in its film business. Kodak shares rose 24 cents on Wednesday to close New York trade at $26.17.

The company held an 18 percent share of the U.S. digital camera market in 2003, according to research firm IDC, second only to Sony's 22 percent. But Kodak has not had much success in other regions and its global market share is below 10 percent.

In February, Kodak raised its stake in Japanese digital camera supplier Chinon Industries Inc to 87 percent from around 59 percent in a bid to speed up development of digital cameras by consolidating efforts in Japan.

Sony has enjoyed considerable success in digital cameras but its profit margins have recently come under pressure along with those of its peers due to severe price competition.

The electronics and entertainment conglomerate said it was aiming for shipments of around 14-15 million digital cameras in the business year that started on Thursday, versus a target for 10 million in 2003/04.

UBS analyst Ryohei Takahashi forecasts global digital camera shipments will reach 68.5 million units this calendar year, up nearly 40 percent from 2003. He expects shipments to peak at 77.5 million units in 2005 before dropping off slightly in 2006. (Additional reporting by Eric Auchard in New York)