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Kodak may sell patent being used in lawsuits against Apple, RIM

post #1 of 17
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Eastman Kodak Co. is said to be considering the sale of one of its most valuable patents, an invention that is the key component of lawsuits against smartphone makers Apple and Research in Motion.

Kodak has previously announced it is considering the sale of 1,100 patents, which would amount to 10 percent of its portfolio. One of those patents, The Wall Street Journal confirmed Tuesday, is the image-previewing invention upon which Kodak's lawsuits against Apple and RIM are based.

The imaging company is said to be showing "eagerness to raise cash," since its patent litigation income has "dried up" over the last two quarters.

"Kodak is concerned an investor might try to gain control of the patents -- which could be worth more than the company's market value of $650 million -- by buying up a big stake in Kodak itself, a person familiar with the matter said," author Dana Mattioli wrote.

Kodak officials believe the company will be able to sell its patents for a large sum of money, and potentially turn their woes around. The camera maker posted a loss of $179 million, or 67 cents per share, in its recent second quarter earnings report.

The first legal shot against Apple was fired with the U.S. International Trade Commission in January of 2010, when the iPhone was accused of infringing on the image-previewing patent. The company hoped that a victory in its lawsuit could bring in more than $1 billion in royalties.



But a number of setbacks in the suit have prompted Kodak officials to reassess the situation. In January, a judge with the federal agency agreed with Apple and RIM that the patent was invalid because it was "an obvious variation of an earlier invention." The commission upheld parts of that decision last month, while also sending some claims back to an administrative law judge for a final decision in August.

Faced with the decline of the camera film market, Kodak has turned to its extensive patent portfolio as a source of income while it struggles to transition into a digital imaging company. It successfully licenses its digital imaging technology to about 30 companies, including handset makers such as LG, Motorola, Nokia and Sony Ericsson.
post #2 of 17
Quote:
Originally Posted by AppleInsider View Post

Eastman Kodak Co. is said to be considering the sale of one of its most valuable patents, an invention that is the key component of lawsuits against smartphone makers Apple and Research in Motion.



That makes a lot of sense for Kodak to do that. Likely they will find a buyer that can both use the tech and prevent third parties from ripping it off.

Smart move.
post #3 of 17
So the question for Apple is would it be cheaper to buy the patents or fight them?
A.k.a. AppleHead on other forums.
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A.k.a. AppleHead on other forums.
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post #4 of 17
Quote:
Originally Posted by Robin Huber View Post

So the question for Apple is would it be cheaper to buy the patents or fight them?

...Or to simply buy Kodak outright.
post #5 of 17
Lets auction the patent on eBay!!!
post #6 of 17
This is the obvious outcome of Apple and others spending billions on the Nortel patent collection.

Now every company with an aging patent portfolio is going to look at cashing in by selling them off to the highest bidder, who in turn will use them to hamper and harass the competition.

This is NOT how the patent system is supposed to work.
post #7 of 17
Quote:
Originally Posted by Black107 View Post

...Or to simply buy Kodak outright.

Last week, as the Board of Kodak decided to weigh the decision of putting the Kodak patent portfolio up for sale. They also initiated a self preservation option, in that, if anyone buys more than 5% of Kodak "there would be a triggering event under the Rights Agreement resulting in significant dilution in the ownership interest of such person or group in Kodak stock."

http://whattheythink.com/news/52001-...heyThink+Daily
post #8 of 17
Quote:
Originally Posted by Black107 View Post

...Or to simply buy Kodak outright.

The Kodak brand still has some value - but it's going downhill fast. Apple could buy Kodak and it would barely make a dent in their cash pile. Clean out the deadwood, and instill some Apple culture into the company. Slim down the product line to differentiate it from phone cameras. Kodak used to have a strong medical (xray) presence. They develop digital imaging in the medical sector to work with their iOS devices. Plus they could gain ownership of more patents, some of which probably have some value.

It might be a bit of a gamble, but it would prevent someone from buying the patents and sueing apple. Could have some upside.
post #9 of 17
Quote:
Originally Posted by ahmlco View Post

This is the obvious outcome of Apple and others spending billions on the Nortel patent collection.

Now every company with an aging patent portfolio is going to look at cashing in by selling them off to the highest bidder, who in turn will use them to hamper and harass the competition.

The question to consider is if the sale of a patent changes the age of the patent. In other words, patents go for like 20 years yes. At which point they become 'public property'. Is that true even if ownership changes hands or does the sale restart the clock. I suspect it does not. The rush of patent suits could be both because the so called offenders have money to pay AND because the patents are on the verge of expiring anyway.

And if the clock doesn't restart then in the end the only point to buying a patent is to gain the little bit of income that might be legally left and perhaps (depending on the sale price) to save a little money on licensing said tech.
post #10 of 17
"patent litigation income"??? What, are they waiting for this whole digital photography craze to blow over?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #11 of 17
Quote:
Originally Posted by Stourque View Post

The Kodak brand still has some value - but it's going downhill fast. Apple could buy Kodak and it would barely make a dent in their cash pile. Clean out the deadwood, and instill some Apple culture into the company. Slim down the product line to differentiate it from phone cameras. Kodak used to have a strong medical (xray) presence. They develop digital imaging in the medical sector to work with their iOS devices. Plus they could gain ownership of more patents, some of which probably have some value.

It might be a bit of a gamble, but it would prevent someone from buying the patents and sueing apple. Could have some upside.


Kodak is also a major player in the high end digital imaging business after its purchase of CREO, which made plate-setters for commercial printers, as well as integrated digital work-flow and imposition software. It has in recent years moved much of its programming to Israel.
post #12 of 17
Quote:
Originally Posted by Black107 View Post

...Or to simply buy Kodak outright.

Too much debt.
post #13 of 17
Apple should probably go ahead and acquire Kokak. Take all the patents, enter into long-term contracts to support technologies that are important to Apple, such as Air-play for Kodak printers, and then sell off Kodak minus the patents.

Quote:
Originally Posted by charlituna View Post

The question to consider is if the sale of a patent changes the age of the patent. In other words, patents go for like 20 years yes. At which point they become 'public property'. Is that true even if ownership changes hands or does the sale restart the clock. I suspect it does not. The rush of patent suits could be both because the so called offenders have money to pay AND because the patents are on the verge of expiring anyway.

And if the clock doesn't restart then in the end the only point to buying a patent is to gain the little bit of income that might be legally left and perhaps (depending on the sale price) to save a little money on licensing said tech.

The sale of a patent has no effect on its expiration date.
Mac user since August 1983.
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Mac user since August 1983.
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post #14 of 17
Quote:
Originally Posted by ahmlco View Post

This is the obvious outcome of Apple and others spending billions on the Nortel patent collection.

Now every company with an aging patent portfolio is going to look at cashing in by selling them off to the highest bidder, who in turn will use them to hamper and harass the competition.

This is NOT how the patent system is supposed to work.


Not true.

The idea behind the patent system is the creation of value. An inventor gets the right to profit from his method, if he can, after making public ("patent") how it works. He is under no obligation to manufacture it himself.
post #15 of 17
Quote:
Originally Posted by Lochias View Post

making public ("patent")



Wow. Thanks.

I always knew the difference between latent and patent, and I knew the bargain was a government enforced monopoly in exchange for public disclosure, but I never realized why the right was called a patent.

Now I get it. Thanks.
post #16 of 17
Quote:
Originally Posted by mcarling View Post

Apple should probably go ahead and acquire Kokak. Take all the patents, enter into long-term contracts to support technologies that are important to Apple, such as Air-play for Kodak printers, and then sell off Kodak minus the patents.



The sale of a patent has no effect on its expiration date.

Entirely too much debt. It's easier to invest in R&D and implement around the offending patents.
post #17 of 17
Quote:
Originally Posted by mdriftmeyer View Post

Entirely too much debt.

That's just a financing detail. For a company as big as Apple, Kodak's debt would not even be a minor factor expect as it affects the bottom line price.

Quote:
Originally Posted by mdriftmeyer View Post

It's easier to invest in R&D and implement around the offending patents.

Sometimes that's true. Sometimes the patent claims are broad enough that there is no way around. Sometimes, for example with many of the Nokia patents that Apple licensed, interoperability cannot be worked around. It's often cheaper to buy or license patents even in the limited cases where working around them is possible..
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Mac user since August 1983.
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