Patent News | "Kodak pushing for patent sale"

Category: Patent News

Facing big money problems, Eastman Kodak Co. in July 2011 hired a New York City investment bank to help it shop around a huge cache of digital imaging patents.

Such a deal, potentially worth billions, did not come to pass in time to prevent Kodak from filing for Chapter 11 bankruptcy on Jan. 19.

But Kodak still is pursuing such a sale and the big potential windfall — which would increase the odds that Kodak’s suppliers could get better than pennies on the dollar for their claims and that shareholders might even receive some returns. And Kodak is seemingly looking to seal a deal by midsummer.

Kodak received U.S. Bankruptcy Court approval last month to hire New York investment bank Lazard Freres & Co. LLC to provide financial and strategic advice relating to a restructuring and an intellectual property sale — Lazard being the same company Kodak hired back in July.

Now Lazard is under some pressure to help turn such a deal around quickly. It stands to pocket millions in fees and bonuses in such a deal. But according to the terms of its contract with Kodak, the IP Sale Transaction Fee it would receive in such a transaction gets sizably cut if a court-approved sale isn’t consummated by June 30 — which is also the U.S. Bankruptcy Court deadline for Kodak submitting proposed bidding procedures for an auction.

What’s for sale is a portfolio of 1,100 patents covering various aspects of capturing, processing, storing, organizing, editing and sharing digital images. And the estimated value of that big stack of patents depends on who you talk to.

An analysis by Michigan intellectual property consulting firm 284 Partners LLC —hired by Kodak — put an estimated value on the patents of $2.2 billion to $2.6 billion.

But an analysis last week by New York intellectual property consulting firm Envision IP Inc. was more conservative — $1.7 billion to $2.6 billion.

And in a Kodak employee Town Hall meeting on Jan. 19, co-President Laura Quatela said Kodak’s own modeling indicated it could rake in $6 billion over the next four years in licensing those imaging patents or potentially more if it inked a deal with one of the warring giants in the smartphone/tablet field, such as Apple Inc. or Google Inc.