Sometimes self-interest can make for some unlikely friendships. According to Bloomberg, Apple and Google have finally teamed up to buy Kodak’s portfolio of patents out of bankruptcy for an estimated $500 million. Yes, the two companies are bitter rivals when it comes to the smartphone market, and really every other market — even wearable tech, apparently.
Okay fine, Eric, Apple and Google are more like two gentle nation-states that judiciously balance informed self-interest with an eye for the common good and their conversations resemble the Hegelian Dialectic and not an episode of Jerry Springer. And, to be fair, both Tim Cook and Eric Schmidt have on separate occasions talked about how the current patent system is bad for innovation. And Larry Page and Tim Cook have reportedly been talking about it, too.
Of course, Apple and Google have a strong track record of what is clearly loving litigation, with Google/Motorola most recently attempting to ban the imports of virtually every Apple product into the U.S. Hugs! But Tim Cook, for one, seems eager to put Apple’s litigious history behind them.
That’s part of what led to Apple and Google teaming up to buy Kodak’s patents. It’s also just smart business for both companies. They’ve spent plenty of time and money duking it out in court over patents, and up until now, they’ve also been quietly vying for Kodak’s 1,100 imaging patents. According to Bloomberg, Apple had teamed up with Microsoft and Intellectual Ventures Management, while Google was working with RPX Corp. (patent aggregators) and “Asian makers of Google’s Android phones,” which likely means Samsung.
Finally, rather than allowing Kodak to drive up the price by pitting them against each other, they’re putting on their “frienemies” hats and making the shrewd(er) choice. The two companies, Bloomberg reports, will have four months to produce the joint bid. I’m sure between the two they can find some cash lying around somewhere in 120 days.
It’s also a good move considering the outcome of the somewhat ridiculous Nortel patent war, which resulted in a consortium of tech companies (including Apple) paying $4.5 billion and basically squeezing Google out of the bid. Then Google paid an even heftier sum ($12.4 billion) for Motorola and its 20,000 patents. Whether or not one thinks that was worth it, the evidence seems to show the benefit of finding more productive ways to approach patents going forward. If the companies can follow through with that, it would be great for the entire ecosystem.
What’s not great? The reason Kodak is selling its patents as a result of bankruptcy, which it filed for in January after listing $5.1 billion in assets and $6.75 billion in debt. The company obtained commitments for an $830 million sale last month, “contingent on its sale of the digital imaging patents for at least $500 million.” So Google and Apple are helping to facilitate that exit, which is something Kodak needs badly. Yet, still, it’s an ignominious end for the 132-year-old photography giant.
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