Kodak Sets Proposed Bidding Procedures for Digital Image Capture Patents
Bankrupt Eastman Kodak is seeking a confidential auction of its digital image capture patents after failing to get an “acceptable” starting bid for them, the company said in a motion filed with the U.S. Bankruptcy Court, New York.
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Kodak and adviser Lazard Freres & Co. worked for nearly a year to sell its digital capture and imaging systems and service patents, but was hampered by the company’s deteriorating finances, which made potential deals “more difficult to pursue and consummate,” Kodak said. Kodak filed for bankruptcy in January and is seeking a “sales process tailored to sufficiently address possible buyer concern regarding confidentiality and certainty of closing” that a traditional “stalking horse” process lacks, the company said. Kodak’s digital capture portfolio consists 744 U.S. and 374 internationally issued patents and 155 and 224 patent applications, the company said.
About 20 companies signed confidentiality agreements to get access to patent data, Kodak said. While no agreements were reached during Kodak’s year-long search for a buyer, a “number of parties” expressed interest in continuing a sales process, the company said. Kodak’s motion seeks to set a July 16 deadline for submitting preliminary bids followed by an Aug. 8 auction and final sale hearing on Aug. 20. As part of the sales agreement, Kodak and the creditors committee are required to “maintain in confidence” the identity of proposed bidders, Kodak said. The identity of successful bidders can be disclosed once the sales process is complete, it said.
Potential bidders are required to buy all digital capture patents except for one, Kodak said. That patent, issued in 2001, covers a digital camera with a means for previewing images on a display screen and is involved in pending infringement suits, Kodak said. The bids require a $10 million minimum deposit.
Kodak has generated $3 billion in revenue from more than 30 digital capture patent licensees since 2003 and hired Lazard Freres in July 2011 to help weigh “strategic alternatives” for them, Kodak said. The license pacts stretch from those signed with Skanhex Technology and Ability Enterprise in 2003 to one reached with Image Sensor Technology in November 2011. In between are agreements with Nintendo, Nokia, Olympus, Samsung, Sharp, Sanyo, Sony, and Sony Ericsson. The list also includes OLED-related patents sold to LG Display as well as a 2007 cross-licensing OLED pact with Chi Mei EL. Other OLED licensees include Ritek, Samsung and Pioneer, the latter having signed an agreement in 1995. The digital imaging patents range from one issued in the U.S. in 1994 describing a means for enclosing an optical IC mounted on a printed circuit board within a plastic lens to one granted May 8, 2012, for adapting an image for display on a handheld wireless device.