Kodak to Sell Patent Portfolio to 12-Member Consortium Including Apple for $525 Million

[MacRumors]

In line with a report from earlier this month, Eastman Kodak today announced that it has reached a deal to sell its portfolio of digital imaging patents to a consortium of 12 companies organized by patent holding firms Intellectual Ventures and RPX Corporation for $525 million.

Under the agreements, Kodak will receive approximately $525 million, a portion of which will be paid by 12 intellectual property licensees organized by Intellectual Ventures and RPX Corporation, with each licensee receiving rights with respect to the digital imaging patent portfolio and certain other Kodak patents. Another portion will be paid by Intellectual Ventures, which is acquiring the digital imaging patent portfolio subject to these new licenses, as well as previously existing licenses.

TechCrunch cites a court filing naming the 12 members of the consortium, which includes both Apple and Google as had been previously reported.

Apple, Inc.
Research In Motion Limited
Google Inc.
Samsung Electronics Co., Ltd.
Adobe Systems Incorporated
HTC Corporation
Facebook, Inc.
Fujifilm Corporation
Huawei Technologies Co., Ltd.
Amazon Fulfillment Services, Inc.
Shutterfly, Inc.
Microsoft Corporation

The consortium approach among rivals allows the companies to prevent a bidding war and helps ensure that each of them holds licenses to the patents at defined cost, eliminating the risk of later licensing negotiations or protracted court battles.

Article Link: Kodak to Sell Patent Portfolio to 12-Member Consortium Including Apple for $525 Million

[charlieegan3]

Originally Posted by MacRumors

The consortium approach among rivals allows the companies to prevent a bidding war

I'm guessing whats left of Kodak would have preferred a bidding war?

[ftaok]

Originally Posted by charlieegan3

I'm guessing whats left of Kodak would have preferred a bidding war?

i agree. While I'm happy with this development ... If only because I don't have to hear about these patents anymore. But the capitalist in me feels like there could be some anticompetitive behavior here. So these 12 big corporations can rake the little guys over these patents?

[Thunderhawks]

Originally Posted by charlieegan3

I'm guessing whats left of Kodak would have preferred a bidding war?

Actually a smart way to keep costs down and not so good for a patent holder.
And, if the patent holder doesn't agree, they can outwait the company until the are running out of cash.

Shame that Kodak wasn't able to look into the future and adjust it's business accordingly.

Their museum is worth a visit.

[saotomefirst]

Originally Posted by Thunderhawks

Actually a smart way to keep costs down and not so good for a patent holder.
And, if the patent holder doesn't agree, they can outwait the company until the are running out of cash.

Shame that Kodak wasn't able to look into the future and adjust it's business accordingly.

Their museum is worth a visit.

Agreed. Kodak bet all their cash against the change, and they've lost it. Now they'll be lucky if they survive - I think they'll end up being sold to someone.

Truly a loss, my father still has tons of Kodak cameras he loved to carry around... Until he got his hands on an iPhone

[charlieegan3]

Originally Posted by ftaok

i agree. While I'm happy with this development ... If only because I don't have to hear about these patents anymore. But the capitalist in me feels like there could be some anticompetitive behavior here. So these 12 big corporations can rake the little guys over these patents?

Could someone explain how this is legal and yet price fixing is not?

[gnasher729]

Originally Posted by charlieegan3

Could someone explain how this is legal and yet price fixing is not?

Nobody stopped you from going to your bank, asking for a big loan, and offering $1million more. Or to start another consortium that bid higher. Price fixing is something that a seller or several sellers do. Apple, Google, Samsung and whoever else is in this are the customers. They are the buyers. Anti-price fixing laws are there to protect the buyers, not the sellers. If you go to an Apple Store and offer $500 for a MBP, maybe they will laugh at you, but you won't get arrested. And if you bring a dozen friends and you all offer $500 for a MBP, they may laugh even louder, but you still won't get arrested.

And what makes you think these patents were worth more than was paid for them? Patents are worth money insofar as you can use them to create better products. They may be worth money if you want to use them to blackmail others, but that practice is generally frowned upon (everybody frowns upon it if someone other than their favourite company does it, and many dislike it even if their favourite company does it). Apple is in the "selling expensive hardware" business. Why would they pay out money to get into the "patent troll" business? So here are twelve companies who apparently want to use these patents to build products, and they offered what the patents were worth. If they were worth more, then surely someone would have offered more.

[charlieegan3]

Originally Posted by gnasher729

Nobody stopped you from going to your bank, asking for a big loan, and offering $1million more. Or to start another consortium that bid higher. Price fixing is something that a seller or several sellers do. Apple, Google, Samsung and whoever else is in this are the customers. They are the buyers. Anti-price fixing laws are there to protect the buyers, not the sellers. If you go to an Apple Store and offer $500 for a MBP, maybe they will laugh at you, but you won't get arrested. And if you bring a dozen friends and you all offer $500 for a MBP, they may laugh even louder, but you still won't get arrested.

And what makes you think these patents were worth more than was paid for them? Patents are worth money insofar as you can use them to create better products. They may be worth money if you want to use them to blackmail others, but that practice is generally frowned upon (everybody frowns upon it if someone other than their favourite company does it, and many dislike it even if their favourite company does it). Apple is in the "selling expensive hardware" business. Why would they pay out money to get into the "patent troll" business? So here are twelve companies who apparently want to use these patents to build products, and they offered what the patents were worth. If they were worth more, then surely someone would have offered more.

Okay thanks, good explanation. +1

[IJ Reilly]

Originally Posted by charlieegan3

Could someone explain how this is legal and yet price fixing is not?

Price fixing per se is not illegal. Every company "fixes" prices for their own products, and many of them also control the prices retailers can advertise. Collusion to fix prices is the potentially illegal act. This involves competitors getting together to control market prices for products. The result is a cartel, the best example being OPEC.

Have these companies formed a cartel? Probably not, but time will tell by what they do with this patent trove, and not by the fact that they control it.

[0815]

That is good news - that way not one big player gets the patents and can screw the other ones. Just hope the new Consortium doesn't become a patent troll to use it against others.

And while the big companies are at it with the patent consortium ... why does not every company throw their own patents in their and everyone in there can use the other patents so that the legal bs finally stops and they can concentrate on innovation again (and free MacRumors from Patent war headlines)

[IJ Reilly]

Every time some company files a patent infringement case against another company, it is called "patent trolling" by the people who don't like that company, and "protecting intellectual property rights" by those who do. So long as these patents are valuable competitive tools, and the laws protecting them don't change, you will never put an end to the legal battles over who owns what.

[macs4nw]

The best tech news, I've read in quite a while. Putting an end to at least some of all these protracted lawsuits.

[bergert]

Originally Posted by IJ Reilly

Every time some company files a patent infringement case against another company, it is called "patent trolling"

yes, but if you actually read it, the 12 companies do pay only part of the $550m because they only get part of the patents. What worries me more is fact that IV gets "the rest"; because they pay "the rest" (whatever that may be). In case you don't know, IV is a shell of a company created by excess cash from Microsoft stock owners. They don't produce anything, they sue often, extract cash settlements - and use the money to gobble up more patents (IP). This is what I would call "patent trolling". And IV will be definitely be suing anybody who makes phones with image-processing and is not on the list of the 12 which do have the image patents now.

I don't have access to details to what was the deal with Kodak to produce the Quick-Take camera for Apple (remember, in these days Apple was barely profitable). But given the fact that Kodak did sue Apple over the iPhone camera; I can understand that Apple now does patent "round corners". Because the QuickTake was sold by Apple, and had the Apple logo on it. So what is the difference to the iPhone's camera exactly ?
http://en.wikipedia.org/wiki/Apple_QuickTake

[IJ Reilly]

Originally Posted by bergert

yes, but if you actually read it, the 12 companies do pay only part of the $550m because they only get part of the patents. What worries me more is fact that IV gets "the rest"; because they pay "the rest" (whatever that may be). In case you don't know, IV is a shell of a company created by excess cash from Microsoft stock owners. They don't produce anything, they sue often, extract cash settlements - and use the money to gobble up more patents (IP). This is what I would call "patent trolling". And IV will be definitely be suing anybody who makes phones with image-processing and is not on the list of the 12 which do have the image patents now.

I don't have access to details to what was the deal with Kodak to produce the Quick-Take camera for Apple (remember, in these days Apple was barely profitable). But given the fact that Kodak did sue Apple over the iPhone camera; I can understand that Apple now does patent "round corners". Because the QuickTake was sold by Apple, and had the Apple logo on it. So what is the difference to the iPhone's camera exactly ?
http://en.wikipedia.org/wiki/Apple_QuickTake

We don't know anything currently about which patents out of Kodak's portfolio will be shared (and probably never will), but one thing we can be sure about is that the twelve companies are getting most of what they want or they would not be in the deal. This group of companies could easily have afforded to purchase the portfolio entirely on their own without IV, had they wanted the whole ball of wax. No matter whether you regard IV as a "patent troll" (no opinion), they are definitely not a "shell" company by any definition.