Companies court Kodak – it's ripe for the picking

The failing Eastman Kodak company isn’t failing as much as you’d expect. In fact, it’s having a Kodak moment.

It is sitting on a patent treasure trove of over 1,100 patents wildly valued, by at least one expert, at over $3 billion and has cunningly positioned itself for a quick, easy sale.

Just a week before filing for bankruptcy protection with the Southern District of New York, the company fired off another salvo of patent infringement suits against Apple (four patents) and HTC (five patents), adding an interesting twist to the on-going mobile patent wars. The more it becomes caught up in the crossfire, the more attractive it will become to potential buyers.

Eastman Kodak today is business as usual, only under the watchful eye of the Federal government, in an attempt to pull itself together and for the sake of its investors and employees, survive.

A recent reorganisation of the business boosted investor confidence while the company was still on the stock market, but was quickly superseded by the company’s Chapter 11 filing.

While it is true that, as Antonio Perez, CEO of Kodak put it, one of the reasons the company is in bad shape is that patent infringers have enacted stalling tactics in court, hoping for the collapse of Kodak before legal proceedings came to an end.

In fact, the company has relied on licensing as a regular source of income, especially as its products have failed to make a hit. In the end, it cannot collect and with Kodak’s situation there are talks that cases may simply stall in court. Kodak looks increasingly like a victim of big business… or is it?

The timing of both the restructuring, Chapter 11 filing and new lawsuits may have been cherry-picked to increase third-party interest in the company.

“The companies defending themselves against Kodak might ask the courts to stay all pending cases, but generally, bankruptcy does not prevent a company from enforcing its intellectual property rights”, Florian Mueller, IP expert, tells TechEye.

In all likelihood, court proceedings will continue even as the company struggles. Both the Kodak and the federal authorities will pursue sources of revenue, including damages awarded in court from successful litigation. Not only that, but a buyer will wipe its slate clean and pursue its adversaries in the mobile business.

In the course of today’s Mobile Patent Wars, everyone is a suitor, and everyone stands to make a killing out of Kodak’s demise. Buying the vast (1100+) patent portfolio, that matches the smartphone market so well, would be a Godsend to any of Microsoft, Samsung, LG, Apple or even Google, literally switching round the tables.

“Digital photography is part of the standard functionality of a modern-day smartphone, and increasingly common in tablet computers. Key patents on digital imaging could have some strategic value in the ongoing wireless patent wars”, added Mueller.

You can’t really imagine your smartphone without a camera, and most likely if you have one, then the odds are it exists under a Kodak licence of some sort.

The result is that the underdog here is being very coy about what happens next. Restructuring the company and a potential lawsuit bonanza against patent infringers will immediately attract buyers homing in for the opportunity to get one up on their adversaries or, maybe even for the first time, taking lead in a business that has been under the thumb of Apple and Google.

Someone will snap up Kodak soon, very soon.