Week 2, Post 2 — Kodak licences patents for cheap

Eastman Kodak Co. was suffering through bankruptcy. The digital imaging giant was close to shutting off, and disappearing. But what came in handy for them was their extensive and useful patents. So, what did they do? They decided to sell and license of its digital imaging patents for net proceeds of $527 million.

This transaction has helped build the momentum for Kodak to emerge out of bankruptcy midyear. There is not just one company/firm that Kodak has licensed its patents to. In fact, the consortium of firms include, Facebook Inc., Amazon.com Inc., Apple Inc., Google Inc. and Samsung Electronics Co.

However, this deal could have got Kodak a lot more money if the circumstances were different, i.e, if Kodak was not facing bankruptcy, licensing its patents would have fetched it more money. In fact, Kodak was said to have hoped for more than $2 Billion for its patents. However, the fact that Kodak was in distress, meant that they would agree to a lesser amount of money. This fact, as happens often, was taken advantage of, and they consortium of firms got a very good deal on Kodak's patents.

Kodak still has the rights to use it's patents, and is emerging out from bankruptcy.

Article: http://www.rbj.net/article.asp?aID=193922