updated 10:20 pm EDT, Wed August 17, 2011
Kodak considers selling patents to stay alive
Insiders disclosed late Wednesday that Kodak had started the process of courting companies to sell its camera-related patents. Bankers at Lazard have been shopping the 1,100-strong patent collection around to see if companies are interested. Buyers weren't mentioned by name, but one identified by the WSJ is a "large, strategic buyer in the wireless industry" that would snap up the patents for "defensive protection," according to a source.
The description most likely points to Google, which has been making up for wasted bids on Novell and Nortel patents by buying Motorola and making a much smaller deal to buy 1,030 IBM patents. Apple is also a candidate given its determination to keep the upper hand in patents, although its uses have steadily turned towards the offensive.
HTC, the pre-acqusition Motorola, Nokia, RIM, and Samsung are other prime candidates. Some companies already have license deals with Kodak and may be keen to stop the payouts while getting patents in the bargain.
Kodak has often been one of the fiercest protectors of patents. It quickly turned to lawsuit threats as compensation for its inability to compete in the digital camera market, but that revenue itself has run low as the company has run out of major targets to collect royalties. Its fate could hinge on whether or not it can win an ITC case against Apple and RIM. Those two could provide $1 billion a year in revenues. If lost would hurt an already bleeding company.
Kodak has also pinned some slight hope on attempts to charge twice for a patent license on tablets, where many now have cameras. Negotiating or forcing deals with these may be too expensive for it to realistically consider in a short space of time, however.
Estimates this week have suggested that Kodak's patent mix in the current, lawsuit-heavy climate is worth three times Kodak's stock market cap and would be tempting for a company running low on funds.