updated 06:30 pm EST, Mon December 19, 2011
Experts wonder if Kodak will survive
Eastman Kodak Co.'s woes increased substantially today with the news that the U.S. ITC decision on a patent-infringement suit brought before it by Kodak against both Apple and Research In Motion (RIM) would be delayed. The ruling, which had been expected by December 30th, has now been reset for September 21st of next year in order for Judge Thomas Pender to consider new expert testimony from RIM and other issues.
The delay is a severe blow to Kodak, which is bleeding cash and has been attempting to sell some of its assets, including 1,100 digital-imaging patents that are believed to be worth between $2-3 billion. The company is currently trying to negotiate a licensing deal that could be worth up to $1 billion, but has run into hurdles from nervous buyers who expect the company will have to file for bankruptcy. The delayed ruling makes that all but certain, as it complicates chances for additional financing and the company has already warned that it will run out of cash within a year unless new money is secured or assets are sold.
Kodak's stock has lost 88 percent of its value in 2011 and was down to 67 cents per share at close on Monday. A company spokesman maintained that interest in both financing offers and IP portfolio sales were still high. The company called the extension "an appropriate amount of time" for a resolution to the case. ITC disputes are typically settled in around 18 months.
Kodak initially filed suit against Apple and RIM in January of 2010, saying the smartphone cameras made by both companies infringe on image-previewing patents it was awarded in 2001. It has been successful in striking deals with both Samsung and LG, but Apple and RIM have chosen to fight the patents, leaving the company struggling for cash as its presence in the digital-camera market continues to fade.
The company still has around $862 million in cash reserves, but has been unable to meet its cash goals and the reserves shrank 10 percent during the third quarter. Sources say that hedge funds have been offering the company considerably less financing than the $900 million it had been expecting.