Bloomberg News

Kodak: 20 Patent Bidders to View Secret Data

June 12, 2012

Eastman Kodak Co. (EKDKQ:US), the bankrupt photography pioneer selling digital-imaging patents, said 20 parties signed agreements to view confidential information and access an electronic-data room ahead of potential bids.

Kodak filed a motion in U.S. Bankruptcy Court seeking approval of an auction process that would keep secret all bidder names and the amounts offered, according to a statement from the Rochester, New York-based company. That may lead to the announcement of a winner on Aug. 13.

Kodak is selling more than 1,100 patents to help shrink the company (EK:US)’s focus to printing rather than photography. It had until June 30 to file an outline of the bid procedures, and the motion accelerates that process. Its two patent portfolios, one containing digital-capture patents and the other imaging systems and services, may be Kodak’s most valuable assets.

“The bidding procedures are designed to allow bidders to give us their best offers without fear of showing their cards to competitors,” Timothy Lynch, Kodak’s vice president and chief intellectual property officer, said in the statement. “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.”

The company said it has generated more than $3 billion from licensing the digital-imaging patents from users including Samsung Electronics Co., LG Electronics Inc., Motorola Mobility Holdings Inc. and Nokia Oyj.

Patents’ Value

The patent technology is valued at $2.21 billion to $2.57 billion, based on an estimate by 284 Partners LLC, a patent advisory firm cited in a debtor’s motion filed before a U.S. bankruptcy court in January.

Kodak is pursuing patent litigation before the U.S. International Trade Commission against Apple Inc., Research In Motion Ltd. and HTC Corp., alleging they infringe some of the for-sale patents. Kodak has said a victory in the case may force the companies to pay for licensing and bolster the value of the patent portfolios the company is seeking to sell.

Kodak is appealing to the six-member commission in Washington, which has the power to block imports of products that infringe U.S. patents. Their decision is due in September.

Kodak hired Lazard Ltd. more than a year ago to try to find buyers for the patents. The photography pioneer that introduced the Brownie camera more than a century ago filed for bankruptcy in January as digital photography cut into its film business.

The case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Beth Jinks in New York at bjinks1@bloomberg.net

To contact the editors responsible for this story: Katherine Snyder at ksnyder@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net


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