Big Yellow Wins the Right to Auction Its Patents — Post Game Analysis
Kodak now has approval from the U.S. bankruptcy court to auction some 1,100 patents in two lots, overcoming the objections of various debtors, including such major tech companies as Apple.
The photography pioneer voluntarily entered bankruptcy in January with stated hopes of reorganizing its debts. Kodak hopes to avoid a complete shuttering of the 123-year-old company. The Kodak patent auction is key to that strategy.
Kodak submitted the proposed patent sale to the court in early June with the goal of raising cash that would aid in its planned corporate restructuring. But a parade of tech companies objected to various aspects of the proposed sale since Kodak submitted that for approval in June. The tech companies include: Apple, FlashPoint Technology, Fujifilm, IBM, Intel, Kyocera, Lucky Goldstar (LG), Motorola Mobility, Nikon, Nokia, Ricoh, Samsung, Sony and Truesense Imaging.
Some of the companies objecting to the proposed sale were previously licensed under the patents and concerned that their licenses would not automatically continue with the new owner. Other objections were raised by the Kodak retirees committee and the company’s unsecured creditors committee.
George Eastman pioneered the photo business with the Kodak Brownie and the cameras that followed. Credit: Wikimedia Commons
Kodak Satisfied 24 Objections to Auction
Of the 24 formal and informal objections made to the proposed sale, Kodak satisfied most of them by amending its proposed sales documents so that they would not impair the rights of licensees through the proposed sale.
Apple and FlashPoint objected to the sale of the 700 patents in the digital imaging group with both companies claiming that they held some ownership interests in the patents.
Kodak revised its proposed sales plan to protect Apple and Flashpoint’s interests should the ownership disputed not be resolved prior to the sale. The bankruptcy court yesterday approved Kodak’s revised plan.
The forthcoming auction will include two bundles of patents. The 700 digital imaging group patents relate to image capture, processing and transmission technologies for digital cameras and devices employing such cameras like smartphones and tablets will be auctioned together.
Kodak disclosed in court filings that it has already received some $3 billion in licensing proceeds from this first group of patents.
A second group of 400 patents pertaining to image analysis, manipulation, tagging, and network-based services will also be included in a second auction. Kodak holds approximately 14,000 active US patents with still more counterpart patents issued worldwide. That is huge.
ED: The former king of photography just last month received a new patent on key smartphone tech. This is bound to get awfully interesting. Stay tuned …
Kodak did a great job looking after retirees, glad to see this big boatload of cash coming in so those folks get paid, my grandparents retired on Kodak largesse to retirees, thanks, Kodak, hope you rock on.
Great insightful piece, Tom.