Kodak should have legally defended the concept of "photography" against "digital picture-making".
By winning a court case against "digital" claimants asserting their product is "photography" Kodak would create two separate markets and be able to sell in both. And the case would only have to be run (and won) once in the United States to establish an enduring and persuasive precedent.
There is a stunning present day example of the power of such litigation. For more than a hundred years any wine producer in the world turning out dry white bubbly wine could label it Champagne. And the grand Champagne houses in Europe were hurting all the way. Now with the power of the EU behind them these original Champagne producers will relentlessly sue any misappropriation of the name Champagne. The result of litigation or threatened litigation is that nobody anywhere labels non-authentic bubbly as Champage. Ok, there may be a few Californian hold-outs still bottling "champagne" but they run the risk of being thought of as being of lesser repute.
Imagine a world in which re-labelling "digital" as "photography" would be considered dodgy and deceitful. For a few million bucks Kodak might have secured such a world. It may still be possible.