Kodak to receive $525M from patent sale (Update)

Dec 19, 2012
In this Aug. 1, 2006, file photo, Eastman Kodak Co. employee Doug Kanous assembles a Kodak NexPress digital production printer at the graphic communications plant in Rochester, N.Y. Kodak announced on Wednesday, Dec. 19, 2012, that it has found a buyer for its imaging patent portfolios, an important step for the company as it tries to emerge from bankruptcy protection in the first half of 2013. (AP Photo/David Duprey, file)

Eastman Kodak is selling its digital imaging patents for about $525 million, money the struggling photo pioneer says will help it emerge from bankruptcy protection in the first half of next year.

Apple Inc., Google Inc., Samsung Electronics Co., Research In Motion Ltd., Microsoft Corp., China's Huawei Technologies, Facebook Inc. and Amazon.com Inc. are among the 12 companies paying to license the 1,100 patents, according to court filings. Patents have become very valuable to digital device makers, who want to protect themselves from intellectual property lawsuits. But Kodak, which has been trying to make the sale happen for more than a year, wound up receiving substantially less money than had been expected.

Rochester, New York-based Eastman Kodak Co. said Wednesday that the patent sale will help it repay a substantial amount of a loan it received under the bankruptcy process. It also satisfies a key condition of a new, cheaper $830 million loan package, which required that the patents be sold for at least $500 million.

Founded in 1880, Kodak filed for bankruptcy protection in January after a long struggle to stay relevant. First came competition from Japanese companies, then the shift from film to digital photography over the past decade. Kodak failed to keep up. The once-mighty company, whose workforce peaked at 145,300 in 1988, said at the end of September that it expected to wind up with 13,100 employees after another round of job cuts.

Since filing for bankruptcy protection, Kodak has sold off several businesses, such as its online photo service, and said it would shut down other divisions, including the manufacturing of digital cameras. The company intends to focus on commercial and packaging printing. It sees home photo printers, high-speed commercial inkjet presses, software and packaging as the core of its business as it emerges from bankruptcy.

Kodak began mining its patent portfolio for license revenue in 2008. In January 2010, it sued Apple and RIM, saying that smartphone makers infringed its patent for technology that lets a camera preview low-resolution versions of a moving image while recording still images at higher resolutions.

But by July 2011, it was trying to sell its 1,100 digital imaging patents. Analysts initially thought the portfolio could fetch between $2 billion and $3 billion. But Kodak struggled to find a buyer.

The 12 licensees for Kodak's imaging patents were organized by Intellectual Ventures and RPX Corp. Kodak spokesman Christopher Veronda said each licensee will pay a portion of the total cost and then have access to all the patents. The deal also includes an agreement to settle patent-related litigation.

The sale represents "another major milestone toward successful emergence" from bankruptcy, said Antonio M. Perez, Kodak's chairman and CEO, in a statement. "Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company."

Kodak will keep ownership of about 9,600 patents, focused mostly on commercial imaging and printing technologies.

Explore further: Out-of-patience investors sell off Amazon

1 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Kodak gets 2013 deadline to reorganize

Jan 20, 2012

(AP) -- Eastman Kodak Co. has obtained a bankruptcy judge's approval to borrow an initial $650 million from Citigroup Inc. to keep operations running while it peddles a trove of digital-imaging patents.

Report: Kodak gets patent bid from Apple, Google

Dec 10, 2012

Apple and Google, bitter rivals in smartphone technology, have joined up to make a combined bid for a bundle of patents offered by photography pioneer Kodak, according to a published report.

Kodak to sell imaging units, focus on printing

Aug 23, 2012

(AP)—Kodak says it will sell its document imaging and personalized imaging businesses to better focus on printing and business services as it works to emerge from bankruptcy protection.

Kodak wins OK to auction digital patents

Jul 03, 2012

(AP) — Kodak says bankruptcy court has approved an auction of its imaging patent portfolios over the objections of Apple and FlashPoint Technologies, giving the photography pioneer clarity on ownership claims.

Recommended for you

Out-of-patience investors sell off Amazon

Oct 24, 2014

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

Oct 24, 2014

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

Oct 24, 2014

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

Oct 24, 2014

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0