Kodak's patents valued at 5 times more than company's market cap

Posted:
in General Discussion edited January 2014
A recent analysis has estimated that Kodak's digital-imaging patents, which make up just 10 percent of its intellectual property portfolio, are worth $3 billion, more than five times the struggling photography pioneer's current value in terms of market capitalization.



As noted by Bloomberg, investment bank MDB Capital Group, which specializes in intellectual property, issued the estimate for Kodak's digital-imaging patent collection, calling the company "the lowest hanging fruit out there." The firm's CEO, Chris Marlett, told the publication that Kodak?s patents ?could go for a huge number and nobody?s talking about it.?



Kodak's market capitalization, the total value of its outstanding stock, stood at $575.77 million on Tuesday, less than one-fifth of MDB Capital's $3 billion estimate for just one segment of the company's patents. The company has tumbled sharply from a prior market value of $30 billion after being left behind in the digital era.



Fund manager Walter Todd said the company "?missed the boat with the transition to digital," though its intellectual property is valuable. "This whole patent area has become really hot," he said.







The Rochester, N.Y., company is currently in the process of suing Apple over a digital imaging patent that could be worth as much as $1 billion in licensing royalties. When asserted against South Korean electronics giants Samsung and LG, the patent brought Kodak more than $950 million in royalty revenue.



Though Apple won some early victories in Kodak's case against it with the International Trade Commission, the final ruling on the case has been cast into uncertainty. Earlier this month, the chief administrative law judge at the ITC retired, just weeks before he was to issue a final judgment on the case. The ITC has said the case will be reassigned to a new judge.



Interest in patents has reached a fever pitch, culminating in Google surprising market watchers by announcing a $12.5 billion deal to acquire Motorola Mobility on Monday. Analysts viewed the move as largely a patent play, as Google has found its Android mobile operating system under attack from infringement claims by rivals Microsoft and Apple. If the deal is approved by regulatory officials, Google will gain 17,000 issued patents and 7,500 in-process patent applications. The company also recently purchased a group of patents from IBM.



"I think that we've seen some very aggressive licensing demands in the Android ecosystem," Google Chief Legal Officer David Drummond said. "And we think that having the patent portfolio will make sure that Android is open and vibrant, and the kind of platform that lots of companies can remain on."



In June, Apple and several other of Google's competitors, including Microsoft, Research in Motion and Sony, beat out Google in a bidding war over a group of 6,000 patents from bankrupt Canadian telecom equipment maker Nortel. The consortium paid $4.5 billion for Nortel's patent collection.



Kodak began shopping its 1,100 digital-imaging patents around in response to the high interest in the Nortel auction. After hemorrhaging $2.5 billion in losses since 2005, the struggling company is desperate for cash. So desperate, in fact, that the company is said to be considering the sale of the valuable image preview patent it has accused Apple of infringing on.



"Given the heightened demand in the marketplace for premium intellectual property assets, we believe that the timing is right and that we have a great opportunity for these very valuable assets," Kodak Chief Executive Antonio Perez said last month.
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Comments

  • Reply 1 of 25
    sflocalsflocal Posts: 3,957member
    Here we go. It doesn't matter what your company does, but what patents it holds to sell to the highest bidder.



    Not sure I like the direction where this is going...
  • Reply 2 of 25
    wardcwardc Posts: 150member
    What? Kodak is struggling?



    Must be because everybody is using digital photography now, and most of it is done on mobile phones, eliminating the market for traditional cameras, which was Kodak's main staple. Kodak always struggled to compete in the digital camera arena, but their film and disposable cameras are still the most popular and widely used on the market.



    But, in this age, very few people are using film anymore (you can thank Facebook, Flickr, etc for this), and Film is a dying medium. It is the film photography market that Kodak still is King, but there is not "much" to be King of in this area, compared to the whole "photography realm" where Digital is now king.
  • Reply 3 of 25
    ahmlcoahmlco Posts: 432member
    Begun, the patent wars have....
  • Reply 4 of 25
    Quote:
    Originally Posted by ahmlco View Post


    Begun, the patent wars have....



    Post of the week.
  • Reply 5 of 25
    Quote:
    Originally Posted by WardC View Post


    What? Kodak is struggling?



    Must be because everybody is using digital photography now, and most of it is done on mobile phones, eliminating the market for traditional cameras, which was Kodak's main staple. Kodak always struggled to compete in the digital camera arena, but their film and disposable cameras are still the most popular and widely used on the market.



    But, in this age, very few people are using film anymore (you can thank Facebook, Flickr, etc for this), and Film is a dying medium. It is the film photography market that Kodak still is King, but there is not "much" to be King of in this area, compared to the whole "photography realm" where Digital is now king.



    You mistake (faulty) reasoning for fact. Kodak was the early leader in digital imaging - consumer cameras, professional cameras, sensor technology, scanners, and printers. That's why they have such a strong patent portfolio. An incompetent management team killed their digital business.
  • Reply 6 of 25
    wardcwardc Posts: 150member
    Quote:
    Originally Posted by rivertrip View Post


    You mistake (faulty) reasoning for fact. Kodak was the early leader in digital imaging - consumer cameras, professional cameras, sensor technology, scanners, and printers. That's why they have such a strong patent portfolio. An incompetent management team killed their digital business.



    Yes, I remember Kodak DS cameras were some of the first digital cameras on the market, around 1995-1996, like the DC20, DC50, DC65, and DC70....they "were" a leader in the digital camera arena...



    Then came along companies like Olympus, Nikon, Sony, and Canon all with their digital cameras...



    Now the majority of digital photography (on the consumer end) is done by Cellphone cameras, like the one in the iPhone or on Android Smartphones, which can do 5 Megapixels or better on a handheld phone or iPod..
  • Reply 7 of 25
    adamcadamc Posts: 547member
    Google Chief Legal Officer David Drummond said. "And we think that having the patent portfolio will make sure that Android is open and vibrant,



    What a bunch of crock, android is based on linux and if it is so goog can never monetize on it except giving it away.



    And why is moto suit against Apple on going if they for defensive purposes.
  • Reply 8 of 25
    gatorguygatorguy Posts: 17,836member
    Quote:
    Originally Posted by AdamC View Post


    Google Chief Legal Officer David Drummond said. "And we think that having the patent portfolio will make sure that Android is open and vibrant,



    What a bunch of crock, android is based on linux and if it is so goog can never monetize on it except giving it away.



    And why is moto suit against Apple on going if they for defensive purposes.



    ummm. . . Because Apple is suing Motorola Mobility too?
  • Reply 9 of 25
    Quote:
    Originally Posted by WardC View Post


    Yes, I remember Kodak DS cameras were some of the first digital cameras on the market, around 1995-1996, like the DC20, DC50, DC65, and DC70....they "were" a leader in the digital camera arena...



    Don't forget the Apple QuickTake 100 (I had one) and QuickTake 150. Built by Kodak. How the hell did they lose the plot so spectacularly?
  • Reply 10 of 25
    enzosenzos Posts: 344member
    Quote:
    Originally Posted by rivertrip View Post


    You mistake (faulty) reasoning for fact. Kodak was the early leader in digital imaging - consumer cameras, professional cameras, sensor technology, scanners, and printers. That's why they have such a strong patent portfolio. An incompetent management team killed their digital business.



    Yes, indeed, Kodak - in spite of being founded in film - were well ahead of the digital game through the late 1990s and produced some excellent cameras in the first half of the noughties. What happened I do not know but I'm guessing it was a decision to go down-market (nixing Schneider-Kreuznach lenses, dual-lens tech, etc.) that stuffed them. A great and innovative American company, a great pity to see its demise.
  • Reply 11 of 25
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by AdamC View Post


    What a bunch of crock, android is based on linux and if it is so goog can never monetize on it except giving it away.



    You're missing Google's entire strategy.



    They don't care if they get paid for Android. They're collecting billions of dollars on the advertising that Android brings in. It's just like search. They don't need to charge you for your searches - the 'free' advertising more than pays for it.
  • Reply 12 of 25
    Apple Buys Kodak
  • Reply 13 of 25
    krreagankrreagan Posts: 218member
    Quote:
    Originally Posted by snailer View Post


    Apple Buys Kodak



    3 Bills is chump change for Apple...
  • Reply 14 of 25
    MacProMacPro Posts: 16,945member
    Quote:
    Originally Posted by snailer View Post


    Apple Buys Kodak



    That is seems the better option IMO and probably cheaper in the long run for Apple than some messy auction on the patents alone.
  • Reply 15 of 25
    MacProMacPro Posts: 16,945member
    Quote:
    Originally Posted by enzos View Post


    Yes, indeed, Kodak - in spite of being founded in film - were well ahead of the digital game through the late 1990s and produced some excellent cameras in the first half of the noughties. What happened I do not know but I'm guessing it was a decision to go down-market (nixing Schneider-Kreuznach lenses, dual-lens tech, etc.) that stuffed them. A great and innovative American company, a great pity to see its demise.



    Very true I will always feel sorry for the talented Kodak digital personal who were held back by their film besotted masters. Who amongst, us who witnessed it, can forget the Kodak: XL 7700 Digital Continuous Tone Printer's images produced from the satellite transmission from the AP of the first missiles fired at night in the first Gulf War. The same pictures were all over the papers the next day but it was amazing to see those prints emerge from that behemoth in real time.
  • Reply 16 of 25
    Quote:
    Originally Posted by AdamC View Post


    What a bunch of crock, android is based on linux and if it is so goog can never monetize on it except giving it away.



    .



    While the core OS is free, Google makes a fortune by licensing the extras, like Android Market and their Apps. It is difficult to sell an android device which has no access to the Market, and does not include stuff like free turn-by-turn navigation. And to get that stuff, the manufacturers needs to licence Android.
  • Reply 17 of 25
    orlandoorlando Posts: 601member
    Quote:
    Originally Posted by digitalclips View Post


    That is seems the better option IMO and probably cheaper in the long run for Apple than some messy auction on the patents alone.



    So you replace a messy auction for the patents with a messy auction for the entire company. 3 billion is chump change for any of Microsoft, Google or Apple. It is also highly likely companies will group together like in the Nortel auction so there would be a lot of money available for bidding.
  • Reply 18 of 25
    Quote:
    Originally Posted by tonton View Post


    Don't forget the Apple QuickTake 100 (I had one) and QuickTake 150. Built by Kodak. How the hell did they lose the plot so spectacularly?



    The best point and shoot digi camera that I haver ever used was a Kodak...Apple could benefit from a buy out, but I wouldnt think Steve would want to have yet another company to run. So license or buy the IP and move on to bigger and better things
  • Reply 19 of 25
    ahmlcoahmlco Posts: 432member
    Quote:
    Originally Posted by jragosta View Post


    You're missing Google's entire strategy.... They're collecting billions of dollars on the advertising that Android brings in.



    Umm... as I understand the numbers, they're collecting not quite ONE billion a year selling ads viewed on Android phones.



    And I'm not sure how much of that money comes from mobile AdWords that could be seen on ANY phone, not just Android. (In other words, if every single Android phone changed into an iPhone, they could STILL be picking up a half-billion in advertising.)



    At any rate, and at that rate, it's going to take thirteen years JUST to pay back the $12.5 billion they spent on Moto, not to mention development costs and maintenance expenses.



    Heck of a strategy.
  • Reply 20 of 25
    orlandoorlando Posts: 601member
    Quote:
    Originally Posted by ahmlco View Post


    At any rate, and at that rate, it's going to take thirteen years JUST to pay back the $12.5 billion they spent on Moto, not to mention development costs and maintenance expenses.



    Heck of a strategy.



    Only if you forget smartphones and the mobile web are growing at an insane pace. They might currently be earning a billion a year from mobile advertising but don't be surprised if that number doubles inside the next 12 months.



    Quote:

    And I'm not sure how much of that money comes from mobile AdWords that could be seen on ANY phone, not just Android. (In other words, if every single Android phone changed into an iPhone, they could STILL be picking up a half-billion in advertising.)



    I don't believe Google actually wants to kill the iPhone; instead they want to get as many people as possible using smartphones. It doesn't really matter if it is iOS, WebOS, WP7 or Android, they want people online, using search and seeing ads. Apple alone cannot get people online fast enough and Microsoft and RiM weren't doing much so Google pushed Android to speed things up. The more people using smartphones and the mobile web, the more ad views for Google.
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