Monday, October 10, 2011

Kodak Bankruptcy Rumors

A week ago Bloomberg published that Kodak is weighing its options including a bankruptcy filing because of concerns raised by possible buyers of its patent portfolio, according to the three Bloomberg sources with direct knowledge of the process. Some potential bidders for the patents are wary of proceeding because a purchase may amount to a so-called fraudulent transfer if Kodak is insolvent.

A number of suitors, such as Google, have signed confidentiality agreements to examine the assets, said Bloomberg sources. If a sale was judged fraudulent, creditors may sue for more money, said one of the sources. A bankruptcy filing may help clear the way for a patent sale, said the people. The sale could fetch about $3 billion, MDB Capital Group estimates.

Kodak confirmed that it hired Jones Day to advise it on considering options and said it doesn’t plan to seek bankruptcy protection. Kodak also has discussed its options with law firm Kirkland & Ellis LLP, Bloomberg sources said.

8 comments:

  1. Bankrupt or not Kodak is no longer relevant.

    ReplyDelete
  2. Kodak might not be relevant but who gets their patent portfolio may be very relevant especially in the "patent wars" surrounding smartphones/tablets (which would seem to be Google's interest).

    ReplyDelete
  3. Most of Kodak patents should be film related. They are worthless.

    ReplyDelete
  4. Nonsense. The patent portfolio is far from worthless, and far from "film-related."

    ReplyDelete
  5. As a former Kodak - Image Sensors Solutions engineer, I can assure you the patent portfolio consists of several thousand solid state (non-film) patents and whatever entity comes to own them will wield a big stick

    ReplyDelete
  6. I'll concur with the other anonymous poster - I too used to work in that group at the Kodak Research Laboratories in Rochester. You will find Kodak IP in virtually every image capture device on the market today - particularly relating the the "Bayer Color Filter Array" and image processing algorithms based on the color filters.

    Search "Bayer Color Filter" on Google for more information.

    ReplyDelete
  7. I conducted the search and wound up at a Wikipedia page on the Bayer filter. The original patent cited there was US 3,971,065 from 1976. I'm not sure what Kodak's recent innovations are, but the only ones that matter from a business perspective are the ones that are active still. US patent terms used to be 17 years from the issue date, but changed after 2003 or so (I think) to 20 years from the filing date.

    Kodak's patents that might affect the CMOS image sensor marketplace are thus those that were issued after late 1994. Given the roaring success since then of digital imaging in general and CMOS imagers in particular, and Kodak's own struggles, it's hard to believe that the company is sitting on a gold mine of active intellectual property. If so, why wouldn't the company have asserted these ore-grade IP rights previously, possibly avoiding being in the state it's in now?

    If anything - in my opinion - the big risk for the image sensor industry as a whole is that Kodak sells some or all of its patents to a non-producing aggregator that turns around and uses them to file lawsuits against healthier sensor makers.

    I think the same possibility exists for any previously-successful imaging company that finds itself on the ropes - just sell off some IP with a sue-back exclusion, your company gets some cash, and your competitors get some expensive legal trouble. This might even increase the company's market value if the exclusion can transfer in an acquisition.

    ReplyDelete
  8. Well said former ISS employee. There is big value in Kodaks ISS (digital image sensor) patents and in supply continuity for the big camera manufacturers using them.

    ReplyDelete

All comments are moderated to avoid spam.