Active Stocks
Fri Sep 29 2023 15:59:14
  1. Tata Steel share price
  2. 129 1.78%
  1. NTPC share price
  2. 245.65 3.3%
  1. Power Grid Corporation Of India share price
  2. 199.85 -0.45%
  1. State Bank Of India share price
  2. 598.7 1.48%
  1. Wipro share price
  2. 406.25 0.11%
Business News/ Companies / News/  Kodak in $525 mn patent deal, eyes bankruptcy end

Kodak in $525 mn patent deal, eyes bankruptcy end

Kodak selling 1,100 patents for $525 mn; deal key to loan package and emerging from bankruptcy

Kodak filed for bankruptcy after years of burning through cash while the rise of digital photography eroded its film business. Photo: AFP (AFP)Premium
Kodak filed for bankruptcy after years of burning through cash while the rise of digital photography eroded its film business. Photo: AFP


New York: Eastman Kodak Co. agreed to sell its digital imaging patents for about $525 million, a key step to bringing the photography pioneer out of bankruptcy in the first half of 2013.

The deal for the 1,100 patents allows Kodak to fulfill a condition for securing $830 million in financing.

The patent deal was reached with a consortium led by Intellectual Ventures and RPX Corp., and which includes some of the world’s biggest technology companies, which will license or acquire the patents.

Those companies are Adobe Systems Inc., Inc., Apple Inc., Facebook Inc., Fujifilm, Google Inc., Huawei Technologies Co. Ltd, HTC Corp., Microsoft Corp., Research In Motion Ltd, Samsung Electronics Co. Ltd and Shutterfly Inc., according to court documents.

Kodak still must sell its personalized and document-imaging businesses as part of the financing package, and also has to resolve its UK pension obligation.

Kodak said the patent deal puts it on a path to emerge from Chapter 11 in the first half of 2013.

“Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company," said Antonio Perez, chairman and chief executive of the Rochester, New York-based company.

The patent portfolio was expected to be a major asset for Kodak when it filed for bankruptcy in January. An outside firm had estimated the patents could be worth as much as $2.6 billion.

Kodak’s patents hit the market as intellectual property values have soared and technology companies have plowed money into patent-related litigation.

For example, last year Nortel Networks sold 6,000 wireless patents in a bankruptcy auction for $4.5 billion and earlier this year Google spent $12.5 billion for patent-rich Motorola Mobility.

But Kodak’s patent auction dragged on beyond the initial expectation that it would be wrapped up in August. One patent specialist blamed those early, overly optimistic valuations, which he said encouraged Kodak’s team to set their sights too high.

“Unfortunately (Kodak management) was misled into thinking it was worth billions of dollars and it wasn’t," said Alex Poltorak, chairman of General Patent Corp., a patent licensing firm. “I think they sold them at a very good price."

He said after Google acquired Motorola, the search engine company no longer needed patents at any price, deflating the intellectual property market.

Kodak traces its roots to the 19th century and invented the handheld camera. But it has been unable to successfully shift to digital imaging.

It will likely be a different company when it exits bankruptcy, out of the consumer business and focused instead on providing products and services to the commercial imaging market.

The patent sale is subject to approval by the U.S. Bankruptcy Court in Manhattan.

The Kodak bankruptcy case is in Re: Eastman Kodak Co. et al, US Bankruptcy Court, Southern District of New York, No. 12-10202. Reuters

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 20 Dec 2012, 01:10 AM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App