Good news for Kodak, as patent sale is completed
posted Friday, February 1, 2013 at 10:40 PM EST
It's been over a year now since Kodak entered bankruptcy proceedings, but fans of the one-time industry icon will be pleased to hear that it finally seems to be getting closer to putting its house in order.
Last December, we reported that Kodak had found a buyer for a large chunk of its patent portfolio. While the US$525 million purchase price was less than a quarter of what had once been expected, this was nonetheless huge news -- and not just for Kodak. First of all, availability of the company's interim and exit financing that hinged on its ability to sell the patents for more than US$500 million. The financing was clearly a critical part of its plan, and by clearing that barrier, the company moved another step further down the path towards recovery. It wasn't just Kodak that stood to benefit, though. The buyer was a consortium of companies, several of which -- Apple, Fujifilm, HTC, RIM, Samsung and Shutterfly -- were involved in ongoing litigation with Kodak. As part of the patent purchase, Kodak agreed to end its patent dispute with these companies. Other parties to the sale included Adobe, Amazon, Facebook, Google, Huawei Technologies, and Microsoft, as well as Intellectual Ventures and RPX Corp.
An announcement is one thing; cash in hand is another entirely. Today, Kodak reports that it has now completed that patent sale, enabling it to pay off a big chunk of the debtor-in-possession financing arranged at the start of the bankruptcy. Kodak chairman and CEO Antonio M. Perez described the patent sale and licensing agreement as "another major milestone toward successful emergence", and went on to state that Kodak is "on track to emerge as a profitable, sustainable company." And although it's now sold the patents, the company can still take advantage of them in its own-branded products, as Kodak itself retains rights to use all 1,100 patents. The company also retains another 9,600 patents which weren't part of the sale.
As for Apple, Fujifilm, HTC, RIM, Samsung, and Shutterfly, completion of the sale presumably brings a collective sigh of relief, now that their legal battles with Kodak have been brought to an end. At Kodak itself, bringing the court cases to an end means less money spent on litigation, allowing it to focus on its most important goal: emerging from bankruptcy as a company that can succeed in the digital age.
(Kodak sign image courtesy of Viktor Nagornyy / Flickr, used under a CC BY 2.0 license.)