Kodak Announces Sale of Patents

Kodak Announces Sale of Patents

Last week we reported the possibility that Google and Apple would snatch up the Kodak patents, but news out says that instead Kodak has made the sale to Intellectual Ventures and RPX Corporation, who are to pay approximately $525 million for them. Kodak is touting the sale as building "Kodak’s momentum toward a successful emergence in the first half of 2013."

I don't normally post the full press release (leaving out the canned quotes mostly), but I think it's important to read exactly how the Kodak family is spinning the sale and how they are trying to position themselves for next year. Have a read:

"Eastman Kodak Company has completed a series of agreements that successfully monetizes its digital imaging patents.

The proposed transaction, which achieves one of Kodak’s key restructuring objectives, follows other recent major accomplishments that include an agreement for interim and exit financing for the company’s emergence from its Chapter 11 restructuring, and resolution of U.S. retiree non-pension benefits liabilities. Kodak’s monetization of IP assets further builds on its momentum toward a successful emergence in the first half of 2013.

Under the agreements, Kodak will receive approximately $525 million, a portion of which will be paid by 12 intellectual property licensees organized by Intellectual Ventures and RPX Corporation, with each licensee receiving rights with respect to the digital imaging patent portfolio and certain other Kodak patents. Another portion will be paid by Intellectual Ventures, which is acquiring the digital imaging patent portfolio subject to these new licenses, as well as previously existing licenses.

“This monetization of patents is another major milestone toward successful emergence,” Antonio M. Perez, Chairman and Chief Executive Officer, said. “Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company. This proposed transaction enables Kodak to repay a substantial amount of our initial DIP loan, satisfy a key condition for our new financing facility, and position our Commercial Imaging business for further growth and success.”

The transaction enables the company to continue innovating in its core Commercial Imaging technologies that are fundamental to its future. Commercial Imaging is a business in which Kodak has significant competitive advantages and strong growth prospects.

“Kodak remains a major center of invention and innovation,” Perez said.

The transaction also includes an agreement to settle current patent-related litigation between the participants and Kodak, which avoids additional litigation costs and helps to ensure that management and the company’s resources focus on enhancing the operations of its core future businesses.

The proposed transaction is subject to the approval of the Bankruptcy Court and the satisfaction of certain customary conditions."

I guess Google/Apple didn't offer enough. Do you have high hopes for Kodak in 2013? Let us know in the comments below.

Posted In: 
Log in or register to post comments

7 Comments

Lee Morris's picture

Today their stock went from 20 cents back up to around 70 cents where I bought it over a year ago... Now I have to decide if I should get out and break even or stay in and hope they are going to keep going up...

Joe Russo's picture

 Stay, stay!

Ian Ludwig's picture

 Where are you getting your 70 cents? I show it sitting at ~19 cents still.

If I am not mistaken, are not Apple, Google, and even Fujifilm part of the consortium that snatched up the patents?

Yes, both Apple and Google are backers in the deal: http://appleinsider.com/articles/12/12/19/kodak-sells-525m-patent-portfo...

Spy Black's picture

At first I read "Intellectual Vultures" for "Intellectual Ventures". Re-reading it, I guess I have a third eye...

Spy Black's picture

I dunno, can you feel bad for Kodak? I grew up with this brand and it was an integral part of my life and career. I have a soft spot for it, but bad management killed it, and now it's pretty much over. I do wish film in general (not necessarily  Kodak) survives as a fine art medium, but I'm pretty pissed off at Kodak brass for letting it rot. Had they properly transitioned into digital, they could have adequately maintained a small film division, and their own heritage. But suits don't care about shit like that. I salute Fuji for taking steps to preserve film, like creating a cosmetic division. Oddly the film manufacturing equipment lends itself to cosmetic production. Who'd a thought? Time will tell if they succeed with that.