1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 7, 2004 Eastman Kodak Company (Exact name of registrant as specified in its charter) New Jersey 1-87 16-0417150 - ---------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 343 State Street, Rochester, New York 14650 (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (585) 724-4000 ------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c))
2 ITEM 1.01 Entry into a Material Definitive Agreement On October 7, 2004, Eastman Kodak Company (Kodak) and Sun Microsystems Inc. (Sun) reached a tentative agreement to settle a lawsuit filed by Kodak for infringement of its Khoyi patents regarding a software architecture on which Sun's Java product is based. See press release dated October 7, 2004, which is filed along with this document as Exhibit (99.1). On October 12, 2004 a final settlement agreement was signed, which is filed along with this document as Exhibit (10) Z. Pursuant to the terms of the settlement agreement, Sun paid Kodak $92 million in cash on October 12, 2004. Kodak provided to Sun a non-exclusive license relating to Kodak's Khoyi patents. In addition, Kodak licensed to Sun certain Kodak patents for existing and future versions of Sun's Java technology. The licensed Kodak patents are limited to those Kodak patents now infringed by the current version of Sun's Java technology. Kodak also released Sun from any past infringement of Kodak's Khoyi patents and from any past infringement of Kodak patents by the Java technology. The license and the release relative to Java technology extend to Sun's licensees, customers, developers, suppliers, manufacturers and distributors. Sun released Kodak from all counterclaims that it had asserted in the litigation. The case was dismissed with prejudice. ITEM 9.01 Financial Statements and Exhibits (c) Exhibits (10) Z. Eastman Kodak Company Settlement Agreement with Sun Microsystems Inc. (99.1) Eastman Kodak Company press release dated October 7, 2004 regarding the tentative agreement reached between Eastman Kodak Company and Sun Microsystems Inc.
3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EASTMAN KODAK COMPANY By: /s/ Richard G. Brown, Jr. ----------------------------- Richard G. Brown, Jr. Controller Date: October 14, 2004 EASTMAN KODAK COMPANY INDEX TO EXHIBITS Exhibit No. (10) Z. Eastman Kodak Company Settlement Agreement with Sun Microsystems Inc. (99.1) Eastman Kodak Company press release dated October 7, 2004.
Exhibit (10) Z.
EASTMAN KODAK COMPANY SETTLEMENT AGREEMENT WITH SUN
MICROSYSTEMS, INC.
This Settlement Agreement ("Agreement"), effective as of
October 7, 2004 ("Effective Date") is entered into by and
between Eastman Kodak Company, a New Jersey corporation with
offices at 343 State Street, Rochester, New York 14650
("Kodak") and Sun Microsystems, Inc., a Delaware corporation
with offices located at 4150 Network Circle, Santa Clara, CA
95054 ("Sun").
I. RECITALS
1.1 Kodak is the owner of certain United States Letters
Patents defined hereinafter as the Khoyi Patents.
1.2 Kodak filed a lawsuit for infringement of certain of
the Khoyi Patents against Sun on February 11, 2002, in the
United States District Court for the Western District of New
York (the "Court"), Case No. 02-6074T(F) (hereinafter "the
Action").
1.3 The parties now desire to amicably resolve and conclude
a full and final settlement of the Action.
II. DEFINITIONS:
2.1 "Foundry Product" shall mean a product that is
substantially designed by a third party, manufactured,
produced, reproduced or purchased by Sun, and subsequently
sold, licensed or otherwise transferred through or by Sun or
its currently existing or future Subsidiaries back to the
designing third party or its designee for further
distribution by that party, for the primary purpose of
attempting to make such product licensed or immune under the
patent rights of Kodak.
2.2 "Java Technology" shall mean all or any portion of the
collection of programming components that in combination
enable a standard, platform-independent programming
environment (including without limitation the Java language,
the Java class library specifications, and the Java
compiler) and runtime environment (including without
limitation the Java class libraries, Java API's and the Java
runtime interpreter or 'virtual machine'), and all toolkits,
optional packages, test suites, tutorials, training
materials, white papers, sample programs and other
specifications and programming elements associated
therewith, that are licensed or distributed by Sun as of the
date of this Settlement Agreement under Sun's Java trademark
(or any successor trademark adopted by Sun), including but
not limited to JavaCard, J2ME, J2SE, J2EE, RMI, Java IDL,
EJBs, and any future versions, implementations,
enhancements, modifications, additions, and/or redefinitions
thereof. For purposes of this definition, the Java
Technology does not include any hardware in which the
elements of the Java Technology are stored, loaded or
operated.
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2.3 "Khoyi Patents" shall mean U.S. Patent Number
5,206,951, U.S. Patent Number 5,129,061, and U.S. Patent
Number 5,421,012 (the "Patents in the Action"), and all
Patents that issued from a common parent patent application
and/or share a common specification with the Patents in the
Action.
2.4 "Kodak Patents" shall mean any and all Patents having a
first effective filing date prior to the date of this
Settlement Agreement that are owned by Kodak or its
Subsidiaries, and/or that are licensable as provided herein
by Kodak or its Subsidiaries without the obligation to make
further payments to a third party for such license. The term
Kodak Patents shall not include the Khoyi Patents.
2.5 "Patents" shall mean all patents and patent
applications throughout the world, including utility models,
as well as any provisionals, continuations, continuations-in-
part, divisions, reexaminations, additions, reissues,
extensions or supplementary protection certificates of any
of the foregoing that may now or hereafter exist.
2.6 "Subsidiary" means any company, entity or enterprise
controlled, directly or indirectly, by a party through
control of fifty percent or more of the voting stock or
other voting interests required for the election of
directors or other managing authority at any time during the
term of this Agreement, provided that such company, entity
or enterprise shall be deemed to be a Subsidiary only so
long as such control exists.
2.7 "Sun Product" means any hardware, software or firmware
made, used, sold or licensed, offered for sale or license,
or imported or exported by Sun for use or sale or license by
Sun, or any service or training offered, delivered or made
available to third parties by Sun in support of such
hardware, software or firmware, now or in the future, other
than the Java Technology.
2.8 "Infringement" means direct infringement, contributory
infringement or inducing infringement of a patent or any
right under a patent. Related terms such as "Infringe" and
"Infringing" shall have a correlative meaning.
III. PAYMENT
3.1 Sun shall pay to Kodak by wire transfer the
nonrefundable sum of Ninety-Two Million Dollars
(US$92,000,000) in immediately available funds. Payment
shall be made no later than 5:00 p.m. New York time on
Tuesday, October 12, 2004 to an account specified by Kodak.
3.2 The releases provided in Article IV and the license
grants provided in Article V shall become effective upon
payment of the amount specified in Section 3.1.
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IV. RELEASES
4.1 (a) Kodak hereby irrevocably releases, and will cause
its currently existing Subsidiaries to irrevocably release,
Sun and its currently existing Subsidiaries, its licensees,
customers, developers, suppliers, manufacturers,
distributors, and successors, and assigns (collectively "Sun
Protected Parties") from any and all causes of action,
claims or demands, known or unknown, that it had, has or may
in the future have against such Sun Protected Parties for an
Infringement of a Khoyi Patent or a Kodak Patent to the
extent such Infringement would have been licensed or
licensable by Sun under the licenses granted in Section 5.1
and 5.2 if such licenses had been in effect at the time of
such Infringement.
(b) To the extent not otherwise released by 4.1 (a),
above, Kodak hereby irrevocably releases, and will cause its
currently existing Subsidiaries to irrevocably release, Sun
and its currently existing Subsidiaries from any and all
causes of action, claims or demands, known or unknown, that
it had, has or may in the future have against Sun and its
currently existing Subsidiaries for any infringement of the
Khoyi Patents.
4.2 Sun hereby irrevocably releases, and will cause its
currently existing Subsidiaries to irrevocably release,
Kodak and its currently existing Subsidiaries (collectively
"Kodak Protected Parties") from counterclaims Sun asserted
(whether or not such counterclaims were allowed by the
Court) against the Kodak Protected Parties in the Action,
for all periods prior to the Effective Date.
4.3 In furtherance of the intentions set forth herein, each
party acknowledges that it is familiar with Section 1542 of
the Civil Code of the State of California that provides as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Each party hereby waives and relinquishes any right or
benefit which it has or may have under Section 1542 of the
Civil Code of the State of California or any similar
provision of the statutory and non-statutory law of any
other jurisdiction to the full extent that it may lawfully
waive all such rights and benefits pertaining to the subject
matter of this Agreement. In connection with such waiver
and relinquishment, each party acknowledges that it is aware
that its attorneys and accountants may hereafter discover
claims or facts in addition or different from those which
each party now knows or believes to exist with respect to
subject matter of this Agreement, but it is each party's
intention to fully, finally and forever settle and release
the matters set forth in Sections 4.1 and 4.2 which now
exist, may exist or heretofore have existed between the
parties. In furtherance of this intention, the release
herein given shall be and remain in effect as a full and
complete release notwithstanding the discovery or existence
of any such additional or different claim or fact.
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V. LICENSE GRANTS:
5.1 (a) Subject to Section 5.4, Kodak grants and will cause
its currently existing Subsidiaries to grant to Sun and its
currently existing and future Subsidiaries, an irrevocable,
perpetual, paid-up, worldwide, non-exclusive license under
the Khoyi Patents ("the Khoyi License"), with the limited
right to sublicense only as provided in Section 5.1(b), to
make, have made, use, contribute to the use of, induce the
use of, sell or license, offer to sell or license,
incorporate into any product, import, export, license, or
engage in any other activity that, but for the Khoyi
License, would constitute Infringement of any claim of the
Khoyi Patents.
(b) Third Party Rights
Subject to Section 5.4, but without limiting the scope of
rights that third parties would enjoy as a result of
application of the patent exhaustion doctrine, Sun may
sublicense to customers and developers under the Khoyi
License the right to incorporate or combine a Sun Product
into and/or use a Sun Product with the third party's
products and to distribute, use and authorize others to use
Sun Products in or with such third party products, provided
however, that the right so granted shall not sublicense a
third party product (A) to Infringe any Khoyi Patent other
than the Khoyi Patent(s) that the Sun Product itself would
Infringe or (B) to directly infringe any Khoyi Patent if the
Sun Product were not incorporated or combined therein. In
addition, in furtherance of Sun's rights to make have made,
sell and license under Section 5.1 (a), Sun may sublicense
to contractors, suppliers, manufacturers or distributors of
Sun Products the right to participate in the design,
production and/or distribution of Sun Products under the
Khoyi License, but only to the extent of such relationship
to Sun.
5.2 (a) In addition, and subject to Section 5.4, Kodak
grants and will cause its currently existing Subsidiaries to
grant to Sun and its currently existing and future
Subsidiaries, an irrevocable, perpetual, paid-up, worldwide,
non-exclusive license under the Khoyi Patents, and under all
Kodak Patents (other than the Khoyi Patents) that are
Infringed by the Java Technology as of the Effective Date of
this Agreement, with the limited right to sublicense only as
provided in Section 5.2(b), to make, have made, use,
contribute to the use of, induce the use of, sell or
license, offer to sell or license, incorporate the Java
Technology into any product, import, export, license and/or
sublicense the Java Technology, and to practice any method
in the manufacture, operation, use and/or provision of the
Java Technology, that, but for the Java Technology License,
would constitute Infringement of any claim of such Kodak
Patents (the "Java Technology License"). Any Java
Technology covered by this Java Technology License is a
"Covered Java Technology", provided that a Covered Java
Technology in the possession of a third party shall cease to
be a Covered Java Technology if any one or more of the
compiler, class libraries or runtime interpreter is modified
or replaced by a third party in a manner that no longer
substantially conforms to Java specifications published by
Sun relating to the particular version of the Java
Technology that was so modified.
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(b) Third Party Rights
Subject to Section 5.4, but without limiting the scope of
rights that third parties would enjoy as a result of
application of the patent exhaustion doctrine, Sun may
sublicense to third parties under the Java Technology
License the right to incorporate or combine the Java
Technology into and/or use the Java Technology with the
third party's products and to distribute, use and authorize
others to use the Java Technology in or with such third
party products, provided however, that the right so granted
shall not sublicense a third party product (A) to Infringe
any Khoyi Patent or Kodak Patent licensed under Section 5.2
(a) other than those Khoyi Patents or Kodak Patent(s) that
the Java Technology itself would Infringe or (B) to directly
infringe any Khoyi Patent or Kodak Patent if the Java
Technology were not incorporated or combined therein. In
addition, in furtherance of Sun's rights to make, have made,
sell and license under Section 5.2 (a), Sun may sublicense
to contractors, suppliers, manufacturers or distributors of
the Java Technology the right to participate in the design,
production and/or distribution of the Java Technology under
the Java Technology License, but only to the extent of such
relationship to Sun.
5.3 For purposes of clarification of the foregoing
licenses, the parties intend that Sun shall have the right
under the license grants provided above, to sell or license
Sun Products and the Java Technology to any third party, for
any type or amount of consideration (including for no
consideration), and on any terms and conditions (including
GPL, open source, shrink wrap, click-through, SCSL, or any
other form of license, now existing or later developed), all
in Sun's sole discretion, provided that regardless of the
terms or conditions under which Sun elects to sell or
license the Sun Products or the Java Technology, no party to
such sale or license shall receive any rights under the
Khoyi Patents or the Kodak Patents greater than the rights
expressly permitted to be conveyed to such party pursuant to
Sections 5.1(b) and 5.2(b) above.
5.4 The license grants provided above are not intended to
authorize Sun or its currently existing or future
Subsidiaries to make, have made, use, contribute to the use
of, induce the use of, sell or license, offer to sell or
license, import or export any Foundry Product.
5.5 The licenses granted under Article V of this Agreement
shall continue, with respect to each claim of each of the
Khoyi Patents and each claim of each of the Kodak Patents
licensed hereunder, for the full term of the patent of which
such claim is a part, and in each such case shall not be
terminable by Kodak prior to the expiration of such term of
the patent claim.
VI. COVENANT NOT TO SUE AND EXPLORATION OF CROSS LICENSING
6.1 Each party agrees and hereby does covenant not to sue
on any claim that either party may have for the Infringement
of a U.S. Patent against the other party for a period of 90
days from the Effective Date hereof.
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6.2 During the ninety day period identified above, each
party shall designate a cross licensing team which shall
meet to explore opportunities for mutually beneficial cross
licensing arrangements between the parties.
VII. REPRESENTATIONS AND WARRANTIES
7.1 Kodak represents and warrants to Sun and Sun represents
and warrants to Kodak that: (i) the person executing this
Agreement on its behalf has full authority to enter into
this Agreement; (ii) each enters into this Agreement of its
own free will and accord, upon advice of its own legal
counsel; (iii) each has the authority to enter into and to
perform or to cause performance of its obligations under
this Agreement; (iv) the execution and delivery of this
Agreement and the actions contemplated hereby have been duly
authorized by all necessary corporate action; (v) this
Agreement constitutes a valid and binding obligation,
enforceable in accordance with its terms; (vi) no further
approval is needed to make this Agreement valid, binding and
enforceable; and (viii) the execution and delivery of this
Agreement will not violate, conflict with or result in a
breach of the terms of any agreement by which either is
bound or of any applicable statute, regulation, rule or
other law.
7.2 Kodak also represents and warrants to Sun that Kodak is
the only person and entity that has any rights to enforce
any of the Khoyi Patents.
VIII. INDEMNIFICATION FOR BREACH OF REPRESENTATION AND/OR
WARRANTY
8.1 Each party hereby agrees to indemnify and hold the
other party harmless from any and all damages, losses, costs
and expenses, including without limitation, attorneys fees,
in the event of breach by the party of the Representations
and Warranties it provided in Article VII above.
IX. MISCELLANEOUS
9.1 This Agreement constitutes the entire agreement of the
parties concerning its subject matter and supersedes any and
all prior or contemporaneous, written or oral negotiations,
correspondence, understandings and agreements between the
parties regarding the subject matter of this Agreement.
9.2 This Agreement may not be modified except in writing by
authorized representatives of both parties.
9.3 This Agreement shall be governed by and construed in
accordance with the laws of New York, without regard to its
conflict of laws provisions and the parties agree and
consent to exclusive jurisdiction and venue in either of the
United States District Court for the Western District of New
York or the United States District Court for the Northern
District of California for the resolution of any disputes
arising from this Agreement.
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9.4 This Agreement may be executed in counterparts, each of
which shall be deemed to be an original instrument
enforceable in accordance with its terms and all of which
shall constitute but one and the same agreement of the
parties.
9.5 The parties' rights under this Agreement shall be
nontransferable, provided however, that in the event of a
merger or acquisition of Sun, or a disposition by Sun of a
substantial product line or substantial business unit
operating in a particular field (the "Field of Use") (a "Sun
Corporate Transaction"), Sun shall be entitled to assign or
otherwise transfer in whole or in part the rights enjoyed by
Sun under this Agreement in that Field of Use that were at
the time of such Sun Corporate Transaction being used by the
subject matter of such Sun Corporate Transaction, but only
such rights in the Field of Use and Sun shall no longer
enjoy rights in the Field of Use after such Sun Corporate
Transaction. Within thirty days after the closing of a Sun
Corporate Transaction in which Sun assigns or transfers any
rights licensed herein, Sun will provide written notice to
Kodak setting forth (i) the parties to the transaction, (ii)
the date of the transaction, (iii) the product line or
business unit involved, and (iv) the Field of Use applicable
to the rights assigned or transferred in such transaction.
9.6 This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
permitted assigns.
9.7 Any notice required or permitted by this Agreement
shall be addressed to the party in question as follows:
If to Sun:
Sun Microsystems, Inc.
4150 Network Circle
Santa Clara, CA 95054
Attn: General Counsel
If to Kodak:
Eastman Kodak Company
343 State Street
Rochester, NY 14650
Attn: General Counsel
9.8 NOTHING CONTAINED IN THIS AGREEMENT SHALL BE CONSTRUED
AS:
A. A WARRANTY OR REPRESENTATION BY KODAK AS TO THE
VALIDITY, ENFORCEABILITY OR SCOPE OF THE KHOYI PATENTS OR
THE KODAK PATENTS;
B. A WARRANTY OR REPRESENTATION BY KODAK THAT ANY
MANUFACTURE, SALE, LEASE, IMPORT, USE OR OTHER DISPOSITION
OF PRODUCTS OR SERVICES LICENSED HEREUNDER WILL BE FREE FROM
INFRINGEMENT OF PATENTS OR UTILITY MODELS OF THIRD PARTIES;
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C. AN AGREEMENT BY KODAK TO BRING OR PROSECUTE
ACTIONS OR SUITS AGAINST THIRD PARTIES;
D. ANY OBLIGATION ON THE PART OF KODAK TO FILE,
PROSECUTE, MAINTAIN, OR DEFEND ANY PENDING PATENT
APPLICATION OR ISSUED PATENT;
E. CONFERRING ANY RIGHT UPON SUN OR ANY THIRD PARTY
TO USE IN ADVERTISING, PUBLICITY, OR OTHERWISE, ANY
TRADEMARK, TRADE NAME OR NAME, OR ANY CONTRACTION,
ABBREVIATION OR SIMULATION THEREOF, OF KODAK;
F. AN OBLIGATION ON THE PART OF KODAK TO FURNISH ANY
TECHNICAL INFORMATION OR KNOW-HOW;
G. CONFERRING BY IMPLICATION, ESTOPPEL, OR OTHERWISE
ANY LICENSE RIGHTS OTHER THAN THOSE EXPRESSLY GRANTED
HEREIN; OR
H. CONFERRING ANY OWNERSHIP INTEREST IN THE KHOYI
PATENTS OR THE KODAK PATENTS.
IN WITNESS WHEREOF, Kodak and Sun have caused this Agreement
to be executed by their duly authorized representatives.
SUN MICROSYSTEMS, INC.
By: /s/ Stephen McGowan
Name: Stephen McGowan
Title: C.F.O.
EASTMAN KODAK COMPANY
By: /s/ Willy C. Shih
Name: Willy C. Shih
Title: Senior Vice President
Exhibit (99.1) EASTMAN KODAK COMPANY Media Contacts: Gerard Meuchner 585-724-4513 gerard.meuchner@kodak.com James Blamphin 585-724-5036 james.blamphin@kodak.com David Lanzillo 585-781-5481 david.lanzillo@kodak.com Kodak and Sun Microsystems Settle Lawsuit Sun to Pay Kodak $92 Million as Part of Agreement ROCHESTER, N.Y., Oct. 7 -- Eastman Kodak Company (NYSE: EK) announced today that it and Sun Microsystems Inc., with the assistance of the U.S. District Court for the Western District of New York, have reached a tentative agreement to settle a lawsuit filed by Kodak regarding a software architecture based on the Java computer language. On October 1, 2004, a federal jury determined that Sun infringed three Kodak patents. Kodak filed suit in February 2002. Pending the signing of a final agreement, Sun will pay Kodak $92 million cash in return for a license for the patents at issue. Additional details were not disclosed. "We achieved our goals in this case, which was to protect our intellectual property rights," said Willy Shih, Kodak senior vice president. "We are pleased that the Court has validated these fundamental Kodak patents and we now look forward to building a more productive relationship and continued collaboration with Sun, with whom we have enjoyed a close partnership for nearly two decades." About Eastman Kodak Company and infoimaging Kodak is the leader in helping people take, share, print and view images -- for memories, for information, for entertainment. The company is a major participant in infoimaging, a $385 billion industry composed of devices (digital cameras and flat-panel displays), infrastructure (online networks and delivery systems for images) and services & media (software, film and paper enabling people to access, analyze and print images). With sales of $13.3 billion in 2003, the company comprises several businesses: Health, supplying the healthcare industry with traditional and digital image capture and output products and services; Graphic Communications Group, offering on-demand color printing and networking publishing systems consisting of three wholly owned subsidiaries: Encad, Inc., NexPress Solutions, and Kodak Versamark; Commercial Imaging, offering image capture, output and storage products and services to businesses and government; Display & Components, which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers imaging sensors to original equipment manufacturers; and Digital & Film Imaging Systems, providing consumers, professionals and cinematographers with digital and traditional products and services. For more information visit: www.kodak.com. 2004