Apple and Google have joined forces to offer more than $500 million to buy Eastman Kodak’s patents, according to a Bloomberg report this week.
The two companies, previously competitors for the patent treasure-trove, have now joined forces.
The joint bid is mixed news for Kodak. This husk of a once-great company is desperate to make the patent sale as it provides a path out of Chapter 11 bankruptcy, but when tow of the largest companies in the world join forces it both reduces competitive bidding and scares off smaller bidders.
The Bloomberg story gave a similar recent example of competitors co-operating in this way: a group including Apple, Microsoft and Research in Motion bought Nortels’s 6000 patents for US$4.5 billion. Google lost the auction for those patents after making an initial offer of US$900 million.
The Wall Street Journal previously reported that a consortium had already offered more than US$500 million for Kodak’s digital patents. Kodak has obtained commitments for US$830 million exit financing last month, contingent on its sale of the digital-imaging patents for at least $500 million.
In court documents, Kodak has said that based on expert advice, the patents may be worth over US$2 billion. US$2.2 billion to $2.57 billion. (Which brings to mind Darryl Kerrigan in The Castle: ‘Tell ’em they’re dreamin’!)
However, Kodak has already drawn over $3 billion in licensing fees for some of the patents from the likes of Samsung, LG, Google and Nokia, which has reduced their value to a potential buyer.