The Lowballing of Kodak's Patent Portfolio
The Lowballing of Kodak's Patent Portfolio
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284 Partners used [...] a discounted cash-flow analysis, which estimated the expected income from monetizing Kodak’s patents through licensing and, if necessary, legal action. [...] 284 Partners interviewed Kodak managers, read claims and court filings, reviewed previous licenses and projections, checked royalty rates, and examined key patents. [...] Ultimately, it projected cash flows from the patents of $3.07 billion from 2012 to 2020, giving the portfolio a present value of $2.2 billion to $2.6 billion. Lasinski thought that estimate “very conservative” given Kodak’s existing licensing and future plans.
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The potential bidders, it turned out, had organized into two camps. In one, Adobe, Apple, Facebook, and Microsoft formed a consortium led by Intellectual Ventures. In the other, RPX mustered Amazon, Google, HTC, Samsung, and the photo-printing website Shutterfly. Each participant in such a consortium gets to keep a share of the patents and a license for the rest. The cost to each is relatively low, and all gain the protective power of the entire portfolio. [...] Kodak balked at the offers. [...] The logical solution was for Intellectual Ventures and RPX to form a superconsortium. And so they did. With the two aggregators at the helm, the consortiums merged and acquired three new members: Fujifilm, Huawei, and RIM. [...] The new, more powerful superconsortium was hardly going to make a worse deal than before [...] Kodak was up against a wall, its single possible buyer a consortium that included almost everyone who might want what it was selling. Inevitably, a deal was struck. In mid-December, Kodak sold its imaging and printing portfolio and a license to all of its remaining patents to the superconsortium for a total of $527 million. The portfolio itself earned the company just $94 million—about 4 percent of 284 Partners’ initial valuation. Although the financial breakdown of the deal is subject to a nondisclosure agreement, the 12 superconsortium members each received licenses to more than 20 000 Kodak patents for an average of $44 million. That’s less than one-tenth of what Samsung paid to license just two Kodak patents, including 218, back in 2009.
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http://spectrum.ieee.org/at-work/innovation/the-lowballing-of-kodaks-patent-portfolio
http://spectrum.ieee.org/at-work/innovation/the-lowballing-of-kodaks-patent-portfolio

Labels: Oleg Zabluda

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