Will This Fallen Giant Ever Catch a Break?

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Eastman Kodak (OTC: EKDKQ.PK) can't catch a break. Then again, maybe it should stop pinning its hopes on highly improbable Hail Mary plays.

The bankrupted photography and technology giant suffered another blow today. Kodak has waged a legal war on Apple (Nasdaq: AAPL  ) and Research In Motion (Nasdaq: RIMM  ) , arguing that their iPhone and BlackBerry products infringe on Kodak's imaging patents. If successful, the International Trade Commission suit could have blocked Apple's and RIM's products from American soil unless the alleged offenders paid up and made nice. According to Kodak, Apple alone owed more than $1 billion in damages.

That's all academic now, since the ITC ruled against Kodak on every issue. Not only do Kodak's targets walk away unharmed, but Kodak's patent portfolio also took a blow right to the value center.

Most of the patent claims were simply dismissed, but one core patent was declared "obvious" and pretty much worthless. Kodak will appeal the decision to the ends of the earth, but it could really have used a small victory here.

The company is in the midst of trying to sell its digital imaging patents to the highest bidder, hoping to land as much as $2.6 billion to stave off angry debtholders in bankruptcy court. Poking holes in Kodak's core patents makes the company's already murky future even dimmer.

I bet Kodak wishes it never would have launched this lawsuit two years ago, but management must keep a stiff upper lip under the circumstances. Chief intellectual property officer Tim Lynch calls this decision "a preliminary step in a process that we are confident will conclude in Kodak's favor." We'll see about that Pollyannaish outlook. Even if the ITC eventually lands on Kodak's side of the fence, the cash influx might come too late to save the company from liquidation. Appeals take time, dude.

While Apple's hoard of cash looks safe from clutches of Kodak at the moment, check out our new premium research service that will keep you up to date on the latest Apple developments. As for Kodak, turnarounds can make you rich -- if you pick 'em right. Kodak doesn't look like a good bet, but the smartest investors can show you straight to some tremendous value plays.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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