A consortium of 12 companies, including Apple, Google, Samsung, Facebook and Microsoft, bought for $525 million, a portfolio of patents in the field of digital imaging and distribution of photographs from Eastman Kodak, a group that started to struggle financially before 2000 and filed for Chapter 11 bankruptcy protection in January 2012. The consortium, was led by Intellectual Ventures and RPX Corp.
Intellectual Ventures is a company based in Bellevue, Washington, known for amassing a large number of patents and then licensing those patents to companies. Their practice of filing lawsuits for patent infringement against unsuspecting businesses is called “patent trolling”.
The consortium also includes Amazon.com, HTC, Research In Motion (manufacturer of BlackBerry smartphones), Huawei, Adobe and Fujifilm, and the value of the patents package was estimated at the beginning of the auction at $2.6 billion.
“It’s only a small part of our portfolio of patents. We remain owners of about 9,600 other inventions,” said a spokesman for Kodak.
Such cooperation between rivals are on the agenda in the field of intellectual property rights, as the competitors are trying to prevent potential costly litigation.
Last year, a consortium of which were part of Apple, Microsoft and Research In Motion has taken over 6,000 patents from Nortel Networks group, which is in bankruptcy protection, for $4.5 billion. Google lost the auction, attended with an offer of $900 million.
Kodak needed at least $500 million in exchange for patents auctioned in order to get a credit line of $830 million in the bankruptcy exit plan by the middle of next year. The company based Rochester, New York wants to shift its operations from photography to commercial packaging and printing.
To obtain the funding, Kodak also needs to attract investors willing to buy two divisions of the group and to find a solution on the debt to former employees in the UK.
Kodak, a pioneer of modern photography filed for bankruptcy this year after 132 years of activity, with debts of $6.75 billion and assets of $5.1 billion.
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