When a giant company like Kodak falters, the fallout is always interesting. If you pay any attention to business news, you probably know that Kodak filed for bankruptcy a while back(January, to be precise). But what you might not know is that months before that occurred, they were already auctioning off patents that they own so that they could pay back their investors. How many patents are we talking about? Try 1,100 digital patents. That a lot of proprietary technology there. And apparently it’s worth quite a bit, too, because according to Kodak, an outside firm assessed the value of their patent portfolio earlier this year and determined that it was somewhere between 2.2 and 2.6 billion dollars.
You might be thinking, “Okay, but if you divide up those 1,100 patents, the amount isn’t that bad.” True. Use the power of math to break it down, and you’ll discover that, on average, each patent is worth 2 million. Not easy for just anyone to afford, but not out of the realm of possibility for a medium-size business. Kodak, however, isn’t auctioning off the individual patents one-by-one. Instead, they’ve grouped these patents into two lots – one that includes 700 pieces of their intellectual property, and another that holds the remaining 400. If the estimated value holds up, there’s no way anyone is walking away with either one of those lots without paying several hundred million dollars – on the low side. So, who exactly is doing the bidding on these important digital patents? To no one’s surprise, it is companies who are already giants in the field like Microsoft, Apple, and Google.
In fact, Kodak has stated that all three have already made bids, but that they were far below the 2.2 to 2.6 billion dollar value that they estimated. How much extra power and control winning these patents would give to any of these companies isn’t clear, but it’s obvious that whoever does end up with them will strengthen their hold on the digital marketplace and obtain an advantage over their competitors. Of course, that all depends on how well the winner can integrate their current products and ventures with Kodak’s intellectual property. What’s interesting about Apple being one of the bidders is that they are also one of several companies embroiled in litigation against Kodak. What kind of litigation? They’re fighting over the authenticity of some of Kodak’s patents. Chances are, they’re bidding to become the owners of some of these same patents! Kodak had hoped to have this auction over and done with by Monday, August 13 so that they could go to their Manhattan Federal Bankruptcy court hearing on August 20 knowing where they stood financially. But unfortunately as the date drew closer, it became clear that that just wasn’t going to happen, so this past Monday they extended the auction for an undisclosed amount of time. All along, Kodak has said that they plan to be able to leave bankruptcy in 2013.
About the author: Steven Chalmers has covered the tech industry for over two decades. When he’s not writing, you can find Steven reviewing conference call services and training for his upcoming triathlon.