Kodak Digital Imaging Patents Sell for a Total of $525 Million to 12 Licensees, Including Google

December 19, 2012 - Written By Briley Kenney

Kodak has been hurting for a while. Thanks to digital camera sensors being included in almost every smartphone on the market, traditional digital cameras have taken a hit concerning sales. However, Kodak, like RIM, refused to innovate even with the changing market.

As Kodak has dipped closer and closer to throwing in the towel, one thing has been at the forefront of the issue. Who would be the first to obtain Kodak’s impressive digital imaging patents?

As it would turn out, the patents have been doled out to numerous tech companies, for a combined cost of $525 million. According to Kodak, a portion of the total cost will be paid by the 12 licensees (those buying the patents) while another portion will be paid by Intellectual Ventures and RPX corporation.

In the court documentation for the patent sale, Kodak released the 12 licensees who will be “given rights to the digital imaging patent portfolio and certain other Kodak patents.” Those companies include the following:

  • Apple Inc.
  • Research In Motion Limited
  • Google Inc.
  • Samsung Electronics Co., LTD.
  • Adobe Systems Incorporated
  • HTC Corporation
  • Facebook, Inc.
  • Fujifilm Corporation
  • Huawei Technologies Co., Ltd.
  • Amazon Fulfillment Services, Inc.
  • Shutterfly, Inc.
  • Microsoft Corporation

The listed companies are working together to secure the related patents, and this will keep the overall cost down.

Kodak says that the money from the sale will help the company recover from its recent bankruptcy filing. Antonio M. Perez, Chairman and Chief Executive Officer of Kodak says the patent sale is a crucial milestone for the company.

“This monetization of patents is another major milestone toward successful emergence. 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.”

This sale will also allow Kodak to “continue innovating in its core Commercial Imaging technologies that are fundamental to its future.”

Kodak also says that it has “significant competitive advantages” and “strong growth prospects” in the commercial imaging business.

What this essentially means is that Kodak currently has the appropriate resources to continue innovating and developing in the commercial imaging industry. This is certainly unprecedented for investors and consumers who don’t want Kodak to go under. It’s clear that the next question Kodak needs to address though is what steps to take in order to proceed with a strong economic advantage in the current market.

Similar to what RIM is currently doing with the Blackberry brand, Kodak has to reinvent their contribution and adapt their brand and products to the proper niche. I’m sure there are still plenty of folks out there who prefer point-and-shoot digital cameras over smartphones.

At this point in time, it’s relatively unclear how this will affect the Android platform, especially considering there are numerous companies who will benefit from this agreement. Hopefully, in a general sense this will allow mobile imaging to become a more innovative feature.

Samsung Galaxy Camera white laying down flat

For reference, the Kodak patent has been included below:

ROCHESTER, N.Y.-(BUSINESS WIRE)-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.

Source: TechCrunch