* Kodak selling 1,100 patents for $525 mln
* Deal key to loan package and emerging from bankruptcy
* Company still must sell two business units
By Tom Hals
Dec 19 Eastman Kodak Co agreed to
sell its digital imaging patents for about $525 million, a key
step to bringing the photography pioneer out of bankruptcy in
the first half of 2013.
The deal for the 1,100 patents allows Kodak to fulfill a
condition for securing $830 million in financing.
The patent deal was reached with a consortium led by
Intellectual Ventures and RPX Corp, and which includes
some of the world's biggest technology companies, which will
license or acquire the patents.
Those companies are Adobe Systems Inc, Amazon.com Inc, Apple
Inc, Facebook Inc, Fujifilm, Google Inc, Huawei Technologies Co
Ltd, HTC Corp, Microsoft Corp, Research In Motion Ltd, Samsung
Electronics Co Ltd and Shutterfly Inc, according to court
Kodak still must sell its personalized and document-imaging
businesses as part of the financing package, and also has to
resolve its UK pension obligation.
Kodak said the patent deal puts it on a path to emerge from
Chapter 11 in the first half of 2013.
"Our progress has accelerated over the past several weeks as
we prepare to emerge as a strong, sustainable company," said
Antonio Perez, chairman and chief executive of the Rochester,
New York-based company.
The patent portfolio was expected to be a major asset for
Kodak when it filed for bankruptcy in January. An outside firm
had estimated the patents could be worth as much as $2.6
Kodak's patents hit the market as intellectual property
values have soared and technology companies have plowed money
into patent-related litigation.
For example, last year Nortel Networks sold 6,000
wireless patents in a bankruptcy auction for $4.5 billion and
earlier this year Google spent $12.5 billion for patent-rich
But Kodak's patent auction dragged on beyond the initial
expectation that it would be wrapped up in August. One patent
specialist blamed those early, overly optimistic valuations,
which he said encouraged Kodak's team to set their sights too
"Unfortunately (Kodak management) was misled into thinking
it was worth billions of dollars and it wasn't," said Alex
Poltorak, chairman of General Patent Corp, a patent licensing
firm. "I think they sold them at a very good price."
He said after Google acquired Motorola, the search engine
company no longer needed patents at any price, deflating the
intellectual property market.
Kodak traces its roots to the 19th century and invented the
handheld camera. But it has been unable to successfully shift to
It will likely be a different company when it exits
bankruptcy, out of the consumer business and focused instead on
providing products and services to the commercial imaging
The patent sale is subject to approval by the U.S.
Bankruptcy Court in Manhattan.
The Kodak bankruptcy case is in Re: Eastman Kodak Co. et al,
U.S. Bankruptcy Court, Southern District of New York, No.