Kodak has agreed to sell its digital imaging portfolio to a consortium of 12 licensees for $525 million, organized by patent-holding company Intellectual Ventures and patent risk advisory firm RPX Corporation. It said it will use the proceeds from the sale to pay down bankruptcy debt — the transaction is subject to the approval of the Bankruptcy Court, as well as “certain customary conditions”.
Kodak said a portion of the money will be paid by the 12 licensees, giving each licensee rights to the digital imaging patent portfolio and “certain other Kodak patents”, while another portion of the money will be paid by Intellectual Ventures, which Kodak said will be acquiring the digital imaging patent portfolio “subject to these new licenses, as well as previously existing licenses”.
It is unclear exactly who all 12 licensees are but Earlier this month Bloomberg reported that Apple and Google were joining forces on a bid for Kodak’s patent stash. The full list of 12 licensees are provided in the court documentation filed by Kodak today — they are:
Research In Motion Limited
Samsung Electronics Co., Ltd.
Adobe Systems Incorporated
Huawei Technologies Co., Ltd.
Amazon Fulfillment Services, Inc.
Companies banding together to acquire patents may seem odd when several of the companies in the list are also — or have recently been — engaged in patent litigation with each other, but taking to the courts is a long drawn out and expensive process, and there’s no guarantee of success at the end of the day, so joining forces to license IP at least provides the companies involved with certainty and fixed costs.
Rival companies banding together to license patents is also a smart move as it helps keep the overall price of the patent portfolio down — avoiding a costly patent bidding war (as in the case of Nortel’s patent stash last year, which sold to a consortium that did not include Google for a massive $4.5 billion).
Kodak’s release follows 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.
RPX Corporation (NASDAQ: RPXC) is a leading provider of patent risk solutions, offering defensive buying, acquisition syndication, patent intelligence, insurance services, and advisory services. Since its founding in 2008, RPX has introduced efficiency to the patent market by providing a rational alternative to litigation. The San Francisco-based company’s pioneering approach combines principal capital, deep patent expertise, and client contributions to generate enhanced patent buying power. By acquiring patents, RPX helps to mitigate and manage patent risk for its...
Intellectual Ventures is a private company founded in 2000 to invest in “pure invention.” Its goal is to develop a large patent portfolio rather than to actually develop new systems. Its employees are predominantly patent attorneys, physicists, engineers and biotechnologists. They also have hired prominent scientists to perform invention including Robert Langer of MIT, Leroy Hood of the Institute for Systems Biology, Ed Harlow of Harvard Medical School, Danny Hillis of Applied Minds, and Sir John Pendry of Imperial...