Bankrupt Kodak misses $2bn target, flogs imaging patents for $525m

Intellectual Ventures and RPX play hardball

Iconic camera-maker Eastman Kodak has reached an agreement to sell its portfolio of imaging patents for $525m.

Patent shop Intellectual Ventures is among the buyers, and together with RPX Corporation leads a consortium of 12 unnamed licensees to buy a portion of the patents.

IV, considered by critics to be a patent troll, is also paying to hold a portion of the patents itself.

The licensees in the IV and RPX crew were not named, however firms reported to have been interested in the bidding included the who’s who of tech - Apple, Adobe, Microsoft, Google, Research In Motion, Samsung, HTC, Fujifilm, Facebook, Huawei, Amazon and Shutterfly. Each of the licensees will get rights to the patent portfolio and some other Kodak patents. The deal also puts an end to patent-related lawsuits between the group's members and Kodak.

Microsoft and Apple are reported to have lined up behind IV – company founder Nathan Myhrvold is a former Microsoft chief technology officer – with Google and Asian smartphone companies rumoured to have gone with RPX.

Kodak announced the plan to sell 1,100 patents in its digital imaging business to pay off its creditors and to re-structure and re-invent itself as a printer company in January. The announcement came as Kodak ended US Chapter 11 bankruptcy protection.

At the time, Kodak reckoned it could rise between $2.2bn and $2.6bn from the sale.

Richard Ehrlickman, former vice president of Intellectual Property at IBM, this month said he doubted Kodak could hit the desired price, given that the patents are already widely licensed.

The opening bid in the deal was reported to be $500m, so it looks like the patent shops played hardball and there wasn’t much room for negotiation beyond that. If Kodak really had been banking on up to $2.6bn, then its future doesn't look any less shaky following the deal to sell its silverware. ®