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Kodak wants a special process for patent auction

Eastman Kodak Company is in bad financial shape and entered bankruptcy  in January to protect itself from creditors. Back in March, Kodak sold off some of its assets for the Gallery Online Photo services to Shutterfly. Kodak continues to hope that it can emerge from bankruptcy and move forward with its business.
 
Kodak is looking to sell off two patent portfolios that deal with digital imaging and manipulation of images. Kodak reportedly generates about $3 billion in licensing for these patent portfolios. Major smartphone makers are licensing some of these patents including Samsung, LG, Motorola, and Nokia. Kodak has been in court suing Apple, HTC, and RIM for violating patents it holds, but so far hasn’t had any success.
 
Kodak has now filed a motion seeking court approval of bidding procedures for the bankruptcy auction for patents in its Digital Capture and Kodak Imaging Systems and Services (KISS) portfolios. These patent portfolios have over 1,100 patents inside and are broken into two sections with different characteristics likely to lure different buyers.
 
One of the patent portfolios is called the Digital Capture Portfolio and has 700 patents inside covering key aspects of image capturing, processing, and transmission technologies. Multifunction devices, digital cameras, smartphones, and tablets use these patents.
 
The KISS Portfolio has over 400 patents that cover technologies for image analysis, manipulation, tagging, and network-based services for the storage, access, and fulfillment of imaging.
 
Kodak is seeking court approval for an auction process open all qualified bidders that would not disclose unsuccessful bidders to the public or other firms bidding on the portfolios. Kodak expects the court to rule on its motion by July 2 and hold auction in early August with the winning bidder announced on August 13. 
 
“The proposed structure of the auction is tailored to the special nature of the assets,” said Timothy M. Lynch, Kodak Vice President and Chief Intellectual Property Officer. “The bidding procedures are designed to allow bidders to give us their best offers without fear of showing their cards to competitors. In filing these proposed procedures in advance of the June 30 deadline in our lending agreement, we are moving ahead as quickly as possible with the process of monetizing our digital imaging patent portfolio.”
 
So far, 20 parties have signed confidentiality agreements and have been allowed access to electronic data room with information on the patent portfolios. 

Source: Kodak


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Let the trolls...
By Marlin1975 on 6/12/2012 9:20:47 AM , Rating: 1
Let the patent trolling begin.

This is going to be a mess no matter who wins. In the end consumers and even growth will be hurt.




RE: Let the trolls...
By Theoz on 6/12/2012 10:12:18 AM , Rating: 3
I don't understand why selling a patent portfolio is given such a negative context by so many. Kodak presumably spent a lot of money on its R&D to generate the 1100 patents. They should be able to now cash in on that investment. After all, the entire point of the patent system is to stimulate innovation by rewarding inventors with a limited monopoly.

Also, patent trolling is when a non-practicing entity is asserting the patents. Here, the likely purchaser will not be an NPE since they will likely be a licensee or potential licensee of the patents they are purchasing. So your terminology is incorrect.


RE: Let the trolls...
By foolsgambit11 on 6/12/2012 3:51:47 PM , Rating: 2
If the point of the patent system is to reward inventors with a limited monopoly, then shouldn't that monopoly be non-transferable? If you only allow licensing, you ensure the inventor reaps the rewards of their invention, and you prevent patent trolls from gathering patent portfolios. In situations such as Kodak's, if the company can't restructure into a company that can survive with its patents, then obviously the patents aren't worth much, and no real harm is done by them entering the public domain.

Comments? Suggestions?


RE: Let the trolls...
By Natch on 6/13/2012 7:52:03 AM , Rating: 2
But at the same time, if some company came in and bought Kodak, they would own the patents, right? Patents are transferable, because they have value, while the patent is in effect.

Hopefully Kodak will make one of the stipulations of selling the patent a license to continue using the technology covered by the patent. Would sort of suck to sell it, then have to pay money later on, in order to use it!


$3B per what, year ?
By Gondor on 6/12/2012 10:35:02 AM , Rating: 2
quote:
Kodak reportedly generates about $3 billion in licensing for these patent portfolios.


How did they manage to go bankrupt with $3B revenue from patents alone ? They could sit back, cut the workforce down to zero and just reap the profits from their past work.




RE: $3B per what, year ?
By Marlin1975 on 6/12/2012 10:43:50 AM , Rating: 2
Probably over the life of them and does not take into accout how much it cost to get the patent and then sue others for money (even though most are BS patents, some are decent).


Sad
By knutjb on 6/12/2012 11:58:40 AM , Rating: 2
Sorry to see a once great innovator flounder in the final throws of death. Kodak created so many great products, now unable to compete from bad leadership. They, the old innovators, will be missed.

This is how the economy is supposed to work, do well make money for investors with a byproduct of jobs and tax revenues. Fail and someone else takes your place. All done without the need for government intervention. Maybe a bankruptcy court, maybe not.




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