Apple has joined hands with Google to purchase Eastman Kodak Co. patents out of bankruptcy, with an offer of more than $500 million. Previously, both tech giants were leading two separate groups to buy Kodak’s 1,100 imaging patents, unnamed sources have revealed.
Due to the potential of neutralizing patent infringement litigation, unlikely partnerships in patent sales are not an unusual occurrence. Last year, a similar partnership was seen between Apple, Microsoft and RIM to purchase Nortel Networks Corp.’s more than 6,000 patents for $4.5 billion out of bankruptcy. Google initially made an offer of $900 million but eventually lost the auction for these patents.
Richard Ehrlickman, former vice president of Intellectual Property at International Business Machines Corp. and president of IP Offerings, remarked about the partnership between Apple and Google and said that both companies seem to have learned a lesson from the auction of Nortel. According to him, this move would, on one hand, serve to reduce the cost of the Kodak patents and, on the other, would also serve the business needs of both tech giants.
Apple was previously pursuing the Kodak patents with its partners including Microsoft, and Intellectual Ventures Management LLC. Google’s partners, on the other hand, included patent- aggregation company RPX Corp. and Asian manufacturers of Android devices. Both teams were separately offering less than $500 million but with the joint venture, the offered amount has also increased.
Representatives of Google, Apple and Kodak have declined to comment on the news of partnership because of a court-ordered confidentiality agreement. A previous report from Wall Street Journal said that the consortium was offering more than $500 million for the acquisition of digital patents form Kodak. Kodak, with the sale of these patents, intends to reduce its focus on photography and instead devote more attention to its functional printing and enterprise services.
Kodak mentioned in the court documents that the patents may be worth $2.21 billion to $2.57 billion. The company also said that it has generated over $3 billion in revenue by licensing some of its digital-imaging patents to companies such as Samsung, LG and Google. In its bankruptcy filing, the company listed $5.1 billion in assets and $6.75 billion in debt.