Bankrupt Kodak misses $2bn target, flogs imaging patents for $525m
Intellectual Ventures and RPX play hardball
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Iconic camera-maker Eastman Kodak has reached an agreement to sell its portfolio of imaging patents for $525m.
Patent shop Intellectual Ventures is among the buyers, and together with RPX Corporation leads a consortium of 12 unnamed licensees to buy a portion of the patents.
IV, considered by critics to be a patent troll, is also paying to hold a portion of the patents itself.
The licensees in the IV and RPX crew were not named, however firms reported to have been interested in the bidding included the who’s who of tech - Apple, Adobe, Microsoft, Google, Research In Motion, Samsung, HTC, Fujifilm, Facebook, Huawei, Amazon and Shutterfly. Each of the licensees will get rights to the patent portfolio and some other Kodak patents. The deal also puts an end to patent-related lawsuits between the group's members and Kodak.
Microsoft and Apple are reported to have lined up behind IV – company founder Nathan Myhrvold is a former Microsoft chief technology officer – with Google and Asian smartphone companies rumoured to have gone with RPX.
Kodak announced the plan to sell 1,100 patents in its digital imaging business to pay off its creditors and to re-structure and re-invent itself as a printer company in January. The announcement came as Kodak ended US Chapter 11 bankruptcy protection.
At the time, Kodak reckoned it could rise between $2.2bn and $2.6bn from the sale.
Richard Ehrlickman, former vice president of Intellectual Property at IBM, this month said he doubted Kodak could hit the desired price, given that the patents are already widely licensed.
The opening bid in the deal was reported to be $500m, so it looks like the patent shops played hardball and there wasn’t much room for negotiation beyond that. If Kodak really had been banking on up to $2.6bn, then its future doesn't look any less shaky following the deal to sell its silverware. ®
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COMMENTS
Re: Even with $2.6B
No, this isn't price fixing. It's companies learning that the strategy of bidding up the value of patent portfolios on the basis they can screw their competitors later isn't a great way to run a business. Which is a step in the right direction in my book.
Re: No, this isn't price fixing.
Well I'd argue that it is price fixing. Its just that customers ganging up on a supplier doesn't appear to be illegal whereas suppliers ganging up on customers is.
The losers are all the pension funds owning Kodak shares. But then these days, anyone with a pension pot is being screwed every which way till loose...
You can bet your bottom dollar that those behind the bid don't want to see the value of patent portfolios go down. They think that their own portfolios should be worth UltraBucks or perhaps more. No here they just see the chance of getting a bargain. Protecting themselves against being the target of trolls, but even more importantly using this little pile as a weapon to stop any upstart^H^H^H^H^H^H startups from coming along and having the temerity to try getting into their cosy little business niche.
Horrahhh for the patent trolls !
We can all look forward to higher prices for our tech and slower product development, while the morally brankrupt grave robbers drive around in nice new maseratis.
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