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Embattled photography pioneer Eastman Kodak Co. is nearing the end of a high-stakes patent-infringement fight with smartphone giants Apple Inc. and Research in Motion Ltd.

The 131-year-old Rochester, N.Y.-based company argued in a January 2010 lawsuit that image-preview technology it patented in 2001 was infringed by iPhone maker Apple Inc. of Cupertino, Calif., and BlackBerry maker Research in Motion Ltd. of Ontario, Canada.

Chief Executive Antonio Perez estimates Kodak could draw up to $1 billion from its deep-pocketed rivals if it gets a favorable ruling Thursday before the U.S. International Trade Commission in Washington, D.C.

Because the federal agency can block imports of patent-infringing products, Apple and RIM could be forced to spend hundreds of millions of dollars in licensing fees to bring in smartphones made overseas.

Both Apple and RIM have declined to comment on the case.

A triumph for Kodak would also lift some pressure on the maker of cameras, film, photo kiosks and inkjet printers as it struggles to redefine itself as a 21st-century powerhouse in digital imaging.

Its dispute with Apple and RIM centers on technology Kodak created for extracting a still image while previewing it in the camera’s LCD screen. In 2009, the trade commission ruled that South Korean mobile phone makers Samsung Electronics and LG Electronics infringed the same patent, resulting in $964 million in payouts.

Kodak has amassed more than 1,000 digital-imaging patents since the 1970s, and almost all of today’s digital cameras rely on those inventions. It has licensed digital technology to at least 30 companies, including mobile-device makers such as Motorola Inc. and Nokia Corp.

Mining its rich array of inventions for repeated cash infusions has become an indispensable tactic driven in large part by Kodak’s long and painful digital turnaround.

Since 2004, Kodak has reported only one full-year profit _ in 2007 _ and anticipates another annual loss this year before crossing back to profitability sometime in 2012. It has trimmed its work force to 18,800 from 70,000 in 2002.

Kodak has a promising array of new businesses, but it needs to tap other sources of revenue before investments in those areas have time to pay off.

It is hoping four growth businesses _ consumer inkjet printers, high-speed commercial inkjet presses, workflow software and packaging _ will more than double in size to nearly $2 billion in revenue in 2013, accounting for 25 percent of all sales.

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Europe sought Monday to put a firewall between the financial turmoil ravaging Greece and the destinies of Ireland and Portugal, the two other eurozone countries that have already received international aid.

The region’s finance ministers signed off on important changes to their bailout funds, which they hope will reinforce confidence in the eurozone’s struggling economies even though Greece’s crisis is at a new boiling point.

As Greece risked defaulting on its debt next month, market pressure was increasing on countries like Portugal, where borrowing rates hit record highs on Monday.

“Times are difficult, the reform fatigue is visible in the streets of Athens, Madrid and elsewhere, and so is the support fatigue in some of our member states,” said Olli Rehn, the European Union’s Monetary Affairs Commissioner.

But Rehn urged countries to press on with the austerity. “We are about to complete a decisive response to the worst crisis since the Second World War,” he added.

To boost market confidence, ministers agreed to raise their guarantees for bailout loans from the current rescue fund to euro780 billion($1.1 trillion) from euro440 billion, said Klaus Regling, who manages the Luxembourg-based fund. That will allow the fund to lend out a total of euro440 billion, up from about euro250 billion currently.

The European Financial Stability Facility, as the fund is known, requires significant over-guarantees to get a good credit rating and raise cash.

The increase had been agreed in principle in March, but putting it into force required states to almost double their commitments to the fund _ an unpopular move at a time when citizens in rich countries are increasingly frustrated with the cost of helping their weaker neighbors.

On top of that, the ministers also made an important change to their future rescue fund, which they hope will help already bailed-out countries regain access to debt markets.

The so-called European Stability Mechanism, which will come into force in mid-2013, when the EFSF expires, will not have preferred creditor status when it helps countries that have already been bailed out, said Jean-Claude Juncker, the Luxembourg prime minister who also chairs the meetings of eurozone finance ministers.

That means the fund would not be repaid before any private creditors. Giving the fund preferred creditor status had been criticized for discouraging private investors, who would be last in line to be repaid in the case of a default.

The ESM kicks in at a time when Ireland and Portugal have to re-enter international debt markets and start raising some money again by selling bonds. However, investors will be reluctant to buy these bonds if they have a high risk of not being repaid if the economic situation in the two countries worsens again.

The ESM will retain preferred creditor status for bailouts for countries that have no previous support programs.

The International Monetary Fund said in a statement that further changes to the fund _ such as giving it the power to buy bonds of struggling countries on the open market _ were necessary and that “failure to undertake decisive action could rapidly spread tensions to the core of the euro area and result in large global spillovers.”

The warning came a day after eurozone finance ministers had delayed decisions on vital new loan money for Greece to heighten pressure on the country to pass more spending cuts and economic reforms.

Greece will have to wait until an extraordinary finance ministers meeting on July 3 to get the eurozone to sign off on a euro12 billion loan installment without which it would default on its massive debts by the middle of the month.

By then, the Greek parliament will have to pass austerity measures worth some euro28 billion as well as an unpopular euro50 billion privatization program. Its European creditors and the International Monetary Fund are also pushing for the main opposition party to support the measures, which have already sparked violent street protests and forced Prime Minister George Papandreou to reshuffle his Cabinet.

“The greatest weight of responsibility lies on the shoulders of the new Greek government” as well as the other main political forces in the country, said Rehn.

In talks that lasted into the early hours of Monday morning, the finance ministers also agreed to asks banks and other private creditors to share some of the burden of a second bailout for Greece, likely to be similar in size to the euro110 billion it was already granted a year ago. However, the ministers stressed that any private-sector involvement would have to be strictly voluntary and could not be considered a partial default by rating agencies.

Greece’s newly appointed finance minister Evangelos Venizelos said the eurozone’s decisions showed that urgent action was necessary in Athens. “We have plenty to do, on a daily basis,” he said in a statement. “The political time has been compressed a lot; each day is of extreme importance and hence we cannot afford to waste a single hour.”

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Struggling shopping mall operator Centro Properties Group said Tuesday it has agreed to sell its 588 U.S. malls to New York-based Blackstone Group LP in a deal valued at $9.4 billion.

The acquisition is Blackstone’s largest since its $20.1 billion takeover of Hilton Hotels Corp. in 2007 and shows confidence that the weak retail market in the U.S., where unemployment is hovering above 9 percent, will improve.

Centro, which is weighed down by massive debt including $8 billion from its U.S. malls, also announced a plan to pay off its creditors by giving them ownership of most of its Australian shopping malls.

Lower-ranked creditors and ordinary shareholders would be left with about $100 million.

“We have previously said that the capital structure of Centro is unsustainable in its current form,” Centro chairman Paul Cooper said in a statement.

The deal, if approved, “will return Centro to a positive equity position and potentially allow Centro to return some value to its stakeholders,” he said.

Centro, based in Melbourne, Australia, said the $9.4 billion sale price was a 1.3 percent discount to the book value of the malls at Dec. 31.

Centro said it was also in discussions with Centro Retail Group, Centro Australia Wholesale Fund, Direct Property Fund and other Centro syndicates to create a single portfolio of Australian shopping malls once the U.S. assets sale was complete.

The cancellation of Centro’s debts is contingent on lenders accepting the amalgamation of the Australian funds plus stakeholder approvals once the details of the transaction are finalized.

Securities of Centro Properties were down 10 percent on the Australian stock exchange.

Many of Centro’s U.S. properties are shopping centers anchored by grocery stores, which have been more resilient to rising vacancy rates than other types of commercial properties, said Joseph French, national director of retail for commercial real estate services firm Sperry Van Ness in New York.

The sale of large commercial property portfolios in the U.S. all but came to a stop after the financial crisis hit in late 2008 and credit dried up.

Commercial property sales started to become more common last year, with the apartment sector leading the way. Now retail property sales are starting to pick up.

All that bodes well for private equity investor Blackstone, whether it decides to hold onto the properties and collect management and lease fees, or look to sell.

“Their options are all good, whatever they decide to do, hold or sell,” French said. “The portfolio has the kind of product that people are looking to buy today.”

A Citigroup Global Markets report released on Monday said the U.S. Centro properties were 88 percent occupied as of Dec. 31.

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India’s services industry growth accelerated, underscoring the need for more interest-rate increases to tame inflation.

The Purchasing Managers’ Index rose to 58.1 in January from 57.7 in December, HSBC Holdings Plc and Markit Economics said in an e-mailed statement today. A reading above 50 indicates an expansion.

Asian economies from South Korea to China and India are facing inflation pressures, prompting the International Monetary Fund Managing Director Dominique Strauss-Kahn to say this week that central banks in the region need to raise borrowing costs further. The Reserve Bank of India on Jan. 25 boosted rates for the seventh time in a year and signaled more increases.

“Demand pressures are growing in India,” Jay Shankar, chief economist at Religare Capital Markets Ltd. in Mumbai, said before the release. “Food costs are also feeding into inflation.” He expects the central bank to increase rates by at least 100 basis points by December.

Eleven-year government bonds in January posted their first monthly loss since October on investor concern price gains in India will erode returns on the securities. The yield on the 8.13 percent bond due in September 2022 gained one basis point to 8.18 percent as of 10:41 a.m. in Mumbai, after increasing 14 basis points in January.

India’s benchmark wholesale-price inflation advanced 8.43 percent in December, led by higher food costs. The government on Jan. 13 blamed the late arrival of rains for disrupting supplies of fruits and vegetables including onions, a staple in the local cuisine.

Services Growth

Services such as telecommunications and banking make up almost three-fifths of India’s $1.3 trillion economy.

Indian mobile-phone operators including Bharti Airtel Ltd. added 22.88 million new customers in November, a 3.24 percent increase from a month earlier. That’s the biggest gain since June and signals strong consumer demand in Asia’s third-largest economy.

Reserve Bank Governor Duvvuri Subbarao last month increased the key repurchase rate by a quarter of a percentage point to 6.5 percent and raised the inflation forecast to 7 percent by March 31 from the earlier prediction of 5.5 percent.

In South Korea, consumer-price gains breached the central bank’s 4 percent ceiling in January, the government said Feb. 1. Indonesian inflation quickened and input prices rose in China, separate reports showed this week.

Thailand and South Korea increased rates last month and China’s central bank has moved twice since mid-October and also pushed banks’ reserve requirements to the highest in more than two decades. Bank Indonesia has kept its policy rate at 6.5 percent since August 2009, delaying an increase to avoid attracting more capital inflows. Indonesia is scheduled to announce its next rate decision tomorrow.

Asian economies led a global recovery last year that’s been restrained by Europe’s sovereign-debt crisis and a U.S. job market where unemployment has exceeded 9 percent since May 2009.

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Pakistan’s central bank Governor Shahid Kardar said the outcome of dialogue between the government and political opposition on an economic reform agenda will set the course for the next interest rate decision.

“We welcome the negotiations going on between the government and political parties,” Kardar said on Jan. 29, after unexpectedly keeping the benchmark interest rate unchanged at 14 percent until the end of March. “The next policy decision will depend on the progress the government makes to cope with all the problems.”

Kardar, who blames Pakistan’s above-15 percent inflation rate on government borrowings, said the three rate increases since July are “crowding out” investment and curtailing growth. Prime Minister Yousuf Raza Gilani’s economic team met with the main opposition last week to seek a consensus on ways to cut the nation’s budget deficit and spur growth.

“The private sector is the hope for the economy and the central bank had to keep that balance,” said Bilal Subhani, head of research at JSK Securities Ltd. in Karachi, who had forecast the rate would remain unchanged. “The next review depends on the government’s efforts.”

The decision to keep the rate unchanged was predicted by only three of 17 economists in Bloomberg News survey. The rest forecast a half point increase.

“It is expected tangible steps will be taken to steer the economy back on track,” the central bank said in its monetary policy statement. “This provides a window of opportunity and the focus should be on subsequent developments.”

The nation’s benchmark Karachi Stock Exchange KSE100 Index has gained 28 percent since July 1. Pakistan rupee declined 0.1 percent to 85.63 against U.S. dollar during the period.

Lagging Behind

Pakistan’s $168 billion economy is lagging behind as emerging markets from neighboring India to China help lead the global economic rebound from the deepest postwar recession.

Pakistan, already sapped by terrorism, was set back by floods in 2010, its worst in the nation’s 63-year history. The government forecasts the economy will expand 2.5 percent in the year through June, slower than the original target of 4.5 percent. India’s $1.3 trillion economy may grow 8.5 percent in the year ending March 31, the central bank estimated this week.

Any agreement with Gilani will require a 30 percent cut in government spending, restructure state-owned money-losing companies, including cash advance loans.bloomberg.com/pakistan-international-airlines-corp/” href=”http://www.bloomberg.com/apps/quote?ticker=PIAA%3APA” density=”sparse” title=”Get Quote” ticker=”PIAA:PA” class=”web_ticker”>Pakistan International Airlines Corp. and Pakistan Steel Mills Corp., and set a new price mechanism for power and gas, Ahsan Iqbal, a spokesman for the opposition Pakistan Muslim League of former prime minister Nawaz Sharif, said Jan. 20.

Higher Borrowing

Government borrowing more than doubled to 355 billion rupees ($4.14 billion) from July 1 to Jan. 15, compared with a year earlier, according to the central bank.

The International Monetary Fund, which bailed out Pakistan with an $11.3 billion loan in November 2008, has urged the government to cut subsidies and end tax exemptions.

Political wrangling within the ruling coalition forced Gilani to reverse an increase in fuel prices this month — a rollback also demanded by Sharif — and defer plans to tax more services. The next gasoline price revision is scheduled for today.

The petrol-price reversal, which runs the risk of a wider budget deficit, was criticized by U.S. Secretary of State Hillary Clinton, who urged Pakistan not to “reverse progress.”

Maria Kuusisto, an analyst at consultant Eurasia Group, said in a Jan. 14 telephone interview from London, that Pakistan’s budget shortfall may touch 8 percent of gross domestic product, or 1.3 trillion rupees in the year through June from 6.3 percent in the previous year.

Kardar, in a Dec. 13 interview with Bloomberg News, blamed government borrowing for price pressures and said raising rates may impede investments and undermine economic growth.

The finance ministry has proposed to overhaul a law that would limit government borrowings. The law is yet to be approved by parliament.

Consumer prices in Pakistan climbed 15.46 percent in December from a year earlier, the most among the 17 countries tracked by Bloomberg.

Hundreds of civilians and security officials have died in retaliatory bomb and gunfire attacks since Pakistan’s army began an October 2009 offensive against Taliban guerrillas in the tribal region of South Waziristan, near the border with Afghanistan.

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After threatening Research In Motion Ltd. with expulsion if its fails to immediately scrub its web browser of pornography, Indonesia

At least eight people were killed and 72 missing after the latest downpour to hit Australia’s flood-wracked Queensland state sent raging torrents rushing through several towns, washing away cars and houses, officials said Tuesday.

Emergency services officers plucked more than 40 people from houses isolated by the torrent that hit the Lockyer Valley with little warning on Monday, but thunderstorms and more driving rain were keeping helicopters from reaching an unknown number of other people still in danger on Tuesday morning.

Queensland state Premier Anna Bligh said there were “grave concerns” for at least 11 of the missing.

“Right now we have every possible available resource deployed into this region to search for those people that we know are missing,” Bligh told Australia’s Nine Network. “This is going to be I think a very grim day.”

Queensland has been in the grip of its worst flooding for more than two weeks, after tropical downpours across a vast area of the state covered an area the size of France and Germany combined. Entire towns have been swamped, more than 200,000 people affected, and coal and farming industries virtually shut down. Monday’s deaths took the death toll since late November to at least 18.

Until Monday, the flood crisis had been unfolding slowly as swollen rivers burst their banks and inundated towns as they moved downstream toward the ocean.

But Monday’s flash flooding struck without warning in Toowoomba, a city of some 90,000 people nestled in mountains 2,300 feet (700 meters) above sea level. Bligh said an intense deluge fell over a concentrated area, sending a 26-foot (eight meter), fast-moving torrent crashing through Toowoomba and smaller towns further down the valley.

“We had just begun to believe that we might be in a stabilizing situation when mother nature has delivered something totally shocking to us in the last 24 hours,” Bligh told Australian Broadcasting Corp. radio. “This is an intense and grim situation and it is far from over.”

Rescue workers were battling more bad weather Tuesday. Heavy rain and thunderstorms were forecast for the region for most of the day, which could lead to more flash flooding, the Bureau of Meteorology warned.

Officials urged residents of towns downstream from Toowoomba to immediately move to higher ground. Residents in low-lying regions of the state capital of Brisbane _ Australia’s third-largest city _ were urged to sandbag their homes.

Deputy Police Commissioner Ian Stewart said rescue efforts were concentrated on towns downstream of Toowoomba, including hardest-hit Murphy’s Creek and Grantham, where about 30 people sought shelter in a school isolated by the floodwaters.

News video from late Monday showed houses submerged to the roof line in raging muddy waters, with people clambering on top. A man, woman and child sat on the roof of their car as waters churned around them with just inches (centimeters) to spare.

Among the dead were a mother and her two children, Bligh said.

In Toowoomba, the waters disappeared almost as fast as they arrived, leaving debris strewn throughout downtown and cars piled atop one another.

The flooding in recent weeks has cut roads and rail lines have been cut across Queensland, and the state’s coal industry has been virtually shut down, and cattle ranching and farming across a large part of the state are at a standstill.

Queensland officials have said the price of rebuilding homes, businesses and infrastructure, coupled with economic losses, could be as high as $5 billion.

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U.K. economists predict the Bank of England will keep its bond program and key interest rate on hold next week after above-target inflation prompted some analysts to bring forward forecasts for increases in borrowing costs.

Policy makers will leave the size of the bank’s bond holdings unchanged at 200 billion pounds ($311 billion) on Jan. 13, according to all 39 economists in a Bloomberg News survey. They will also keep the rate at a record low of 0.5 percent, all 61 economists in a separate survey said.

Citigroup Inc., Societe Generale SA and BNP Paribas SA said this week the central bank may raise interest rates faster than previously anticipated to tame inflation. Nevertheless, the pace of the increases may be tempered as the government implements the biggest budget squeeze since World War II to reduce the deficit.

“Growth will be fairly disappointing and it’s going to be aggravated by these interest-rate hikes, but enough’s enough on the inflation front,” Alan Clarke, an economist at BNP Paribas in London, said in a telephone interview. “The focus needs to be much more heavily on inflation given the constant bad news” on consumer prices.

The Bank of England is scheduled to announce this month’s decision at 12 p.m. on Jan. 13 in London.

Policy Dilemma

U.K. inflation accelerated to 3.3 percent in November from 3.2 percent, remaining above the government’s 3 percent limit for a ninth month.

The dilemma for policy makers is the risk to growth from spending cuts after the economic recovery showed signs of losing momentum in the fourth quarter. While a gauge of factory growth rose to a 16-year high in December, services and construction contracted. KPMG LLP said on Dec. 29 that U.K. non-food retail sales fell last month as economic uncertainty and cold weather deterred Britons from shopping.

Societe Generale economist Brian Hilliard this week changed his Bank of England rate outlook, predicting officials will increase their key interest rate by 0.5 percentage point in August and again in November. He previously forecast the rate would remain at 0.5 percent until the second quarter of 2012. BNP’s Clarke yesterday brought forward his forecast for the first rate increase to August from the second quarter of 2012 and sees a 0.25 percent increase.

The risk from consumer prices prompted Citigroup yesterday to change its policy forecast. Economist Michael Saunders now sees policy makers raising borrowing costs twice this year to 1 percent, compared with a previous prediction of one 0.25 percentage-point increase.

The median forecast in a Bloomberg survey of 44 economists is for the Bank of England to raise its key rate once this year, to 0.75 percent in the fourth quarter.

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China’s stocks, the worst-performing equities market among major developing countries this year, are poised to rebound in 2011 as the government keeps inflation under control, according to investor Mark Mobius.

Consumer prices will stay at “tolerable” levels, easing investor concerns about excessive tightening of monetary policy after two interest-rate increases since October, Mobius, who oversees about $40 billion as executive chairman of Templeton Emerging Markets Group, said in response to e-mailed questions.

The Shanghai Composite Index climbed 0.3 percent to 2,759.58 at the 3 p.m. close. It has plunged 16 percent this year, the most among benchmark equity gauges for the 21 nations in the MSCI Emerging Markets Index, on concern tightening measures will slow economic growth. Along with rate increases, the central bank has boosted lenders’ reserve requirements six times this year to tame an inflation rate that climbed to 5.1 percent last month, the highest level in two years.

“We are confident that the Chinese government has the capability to control inflation at a reasonable level in 2011,” Mobius, 74, said yesterday. “If China can keep the CPI at about 4 percent in 2011, the equity market should perform well.”

‘Tolerable’ Inflation

The inflation rate jumped to a two-year high of 4.4 percent in October on rising food prices, spurring the central bank to boost borrowing costs for the first time in three years. The People’s Bank of China acted again on Christmas Day after November consumer prices surged to the highest level in 28 months. The government’s annual inflation target is 3 percent.

Government leaders pledged this month at the Central Economic Work Conference, attended by President Hu Jintao and Premier Wen Jiabao, to shift monetary policy to “prudent” from “appropriately loose” next year. Vice Premier Li Keqiang said the country will place more emphasis on inflation controls, China National Radio reported Dec. 28.

China is tightening after a record expansion of credit to counter the effects of the world financial crisis. The broadest measure of money supply, M2, has surged by 55 percent over the past two years and outstanding yuan-denominated loans have climbed 60 percent to 47.4 trillion yuan ($7 installment payday loans.16 trillion).

“Inflation remains a problem but within tolerable levels and will probably not result in excessive tightening,” Mobius said.

Emerging Markets

The central bank may raise rates as many as three times in the first half of next year, according to Morgan Stanley, while JPMorgan Chase & Co. forecasts two increases in that period. Inflation may stay at a “comparatively high level” in the first half, Liu Jianwei, a Shenzhen-based fund manager at Bosera Asset Management Co., said in an interview this week.

China is lagging behind counterparts across Asia that took steps earlier to raise borrowing costs from global recession lows. Malaysia boosted its benchmark rate three times, starting in March, Taiwan began in June and South Korea in July.

The MSCI Emerging Markets Index advanced 16 percent this year as investors poured money into developing countries where growth is outpacing the U.S. and the European Union. Russia’s Micex Index has advanced 22 percent, while India’s Sensitive Index has risen 16 percent.

“Emerging markets are now in a secular bull market and we expect this trend to continue into 2011, but with significant corrections along the way,” he said. “Even more money will be directed into these markets as investors around the world are beginning to realize that emerging markets are growing three times faster than developed markets, have more foreign reserves and lower debt-to-GDP ratios than developed markets.”

He favors commodity and consumer stocks because of increasing demand and rising incomes in developing nations.

“The negative impact on sentiment has already been factored in as the Chinese market underperformed,” said Mobius. “Going into 2011, we don’t think the government will significantly tighten liquidity unless there is a hyperinflation, which we think is highly unlikely.”

–Zhang Shidong. With assistance from Irene Shen and Richard Frost. Editors: Allen Wan, Eric Martin

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at +86-21-6104-3040 or szhang5@bloomberg.net

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Microsoft Corp. chief executive officer Steve Ballmer, expected to unveil new software for tablets at the Consumer Electronics Show next week, will face skeptics who say his company won