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Apple (AAPL) and Google (GOOG) have teamed up for the reported $500M-plus bid for bankrupt...

  • Saturday, December 8, 2012, 12:14 AM ET
    Apple (AAPL) and Google (GOOG) have teamed up for the reported $500M-plus bid for bankrupt Kodak's (EKDKQ.PK) patents, Bloomberg reports. The two companies - part of rival consortia this summer in an auction for the patents - are likely working together with a goal of neutralizing infringement lawsuits.
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This news story has 26 comments:

  •  
    Maybe there was more than something to the coffee talk that Steve Jobs and Eric Schmidt had
    8 Dec 2012, 04:51 AM Reply Like
  •  
    A summary of economic activity in the tech sector:

    Lawyers get involved in patent bids.

    Lawyers get involved later in the inevitable patent infringement cases.

    Lawyers win (and earn)
    8 Dec 2012, 06:20 AM Reply Like
  •  
    Someone said to me, "Lawsuits have become the way that US companies negotiate." I can't help but think market efficiency would improve if they went back to using closed-door meetings in Las Vegas and smoke-filled boardrooms...
    8 Dec 2012, 06:51 AM Reply Like
  •  
    Joe,
    Unfortunately that is true in my field, there is no negotiating in good faith if one side doesn't get what they believe is fair it ends up in a lawsuit 80-85% of the time.
    8 Dec 2012, 09:50 AM Reply Like
  •  
    i like Joe's comment about closed-door meetings and smoke-filled boardrooms. For us long-term holders of what I at least think is a solid company, and even one that can yet still be a growth company, to see it's price whip-sawed around as if it were a day-trader's thrill can be more than a little disconcerting. I'm reminded of "the next big thing," and the present markets fascination with orgasmic innovations. Remember when the printed and bound book was the idea to make the world change? What more can our brains accommodate!
    8 Dec 2012, 07:48 AM Reply Like
  •  
    I interviewed with a former Kodak division a couple years ago. It was the most ... bizarre interview of my career.

    The hiring manager sounded like he needed anti-depressants and a suicide watch. He described the job, in not-so-many-words, as translating customer requirements into an engineering spec, JUST SO the Chinese overlords could have them translated into Mandarin & implemented by their (native) engineers. He also made it clear his group would only survive until their bosses figured out how to hire enough truly fluent English/Mandarin optical engineers to cut them out entirely.

    I didn't take the job.

    That's what was happening to American companies, prior to the Great Recession and Chinese economic troubles. Kodak sold a valuable division for much-needed cash, only to have the American jobs siphoned off. From their POV, the Chinese weren't doing anything bad: boosting their GDP and bringing jobs in! But from our POV...
    9 Dec 2012, 10:34 AM Reply Like
  •  
    Didn't Kodak buy then Cn #1 print film Lucky to cut R&D?

    "boosting their GDP and bringing jobs in!"

    Also tech transfer ...
    9 Dec 2012, 01:35 PM Reply Like
  •  
    As a long time Mac OS user, I saw the innovation in Windows 8 as a big step away from decades of icons floating on a desktop.

    http://seekingalpha.co...

    The two barriers are the general mistrust of Microsoft (MSFT) and the unfamiliarity of the appearance of the Windows 8 user interface. It remains to be seen if users want to move away from an icon for everything, towards tiles that inform without opening applications.
    9 Dec 2012, 06:54 PM Reply Like
  •  
    Kodak invested in Lucky Film, but the Chinese government blocked a buy-out. The investment was for a multi-year period of technology sharing, with Lucky Film able to make certain emulsions. The original agreement was in 2003, though Kodak negotiated to back out of the deal in 2007. Meanwhile I think the exchange allowed Lucky to gain some coating expertise, which is applicable to more uses than simply making film.
    9 Dec 2012, 06:57 PM Reply Like
  •  
    Neither company really wants the patents, they are buying them to keep them out of the hands of patent trolls. By cooperating they split the price and eliminate a potential bidding competitor. It's pretty much in everyone's best interest.... everyone save Kodak or any patent trolls that might profit from these later.
    8 Dec 2012, 08:11 AM Reply Like
  •  
    If AAPL / GOOG do not infringe then they have nothing to fear. They apparently do infringe, so that's why they are buying the patents. Just because AAPL / GOOG are big and well-liked, it doesn't mean they can infringe other people works. When given a chance, AAPL / GOOG would patent the silliest things and go after their competitors. Business is war. There is no "do-no-evils" here. It's time for AAPL / GOOG to pay their dues.
    8 Dec 2012, 10:49 AM Reply Like
  •  
    They are only infringing if a court rules a patent has been infringed. I'm sure Kodak would have sued if they thought they could win easily... there must have been some doubt since they didn't. Apple/Google buying them now prevents some patent troll whose only mission in life is to try and get court wins they live off going to court and hoping to get a good judgement.
    8 Dec 2012, 10:54 AM Reply Like
  •  
    Litigation is like a coin-toss. Even one has all the right facts, he can still end up loosing. Furthermore, litigation can drag on for years. For a company that needs cash now such as Kodak, the easiest way is to sell the patents. AAPL / GOOG may actually get a deal here if they can buy it for 500 mil. Kodak previously wanted 1 Bil: http://huff.to/YY4o3F
    8 Dec 2012, 11:15 AM Reply Like
  •  
    –––––If AAPL / GOOG do not infringe then they have nothing to fear.–––––

    It's also likely they already push the edges of infringing on quite a few. As Apple is discovering, until a patent is put through the defended or asserted in the legal and bureaucratic process, its value is a great big unknown.

    By putting these unknown/ untested patents to bed, they are preventing future litigation and settlement costs.

    For Kodak litigation would have been pricey and if they'd failed it would have just accelerated the end. As silverscreen pointed out, litigation and patent enforcement is rarely a cut and dried. A jury might award millions, or they might award a token judgement.
    9 Dec 2012, 07:25 AM Reply Like
  •  
    Oh, it's in Kodak's best interest - did you miss the part about how they need this to obtain bankruptcy financing? It's a choice between abandoning ship for a rowboat, or going down with it. To the oars, boys!
    9 Dec 2012, 10:25 AM Reply Like
  •  
    Dennis, I hope the move keeps the lawyers out of the pie!
    8 Dec 2012, 09:43 AM Reply Like
  •  
    Even a conservative estimate puts the cost of royalties on cellphones these days over $20 and close to $40 if the numbers that have been leaking about recent patent agreements are accurate.

    This seems to be why featurephones and computers seem to provide so much more bang for the dollar versus smartphones.

    I agree Dennis' comment above "Neither company really wants the patents, they are buying them to keep them out of the hands of patent trolls."

    Figure another patent royalty adds another $1-$5 per device sold, it starts to add up to real money pretty fast.
    8 Dec 2012, 10:07 AM Reply Like
  •  
    so basically steve jobs created the patent bubble and now it is popping
    8 Dec 2012, 02:33 PM Reply Like
  •  
    If by "Steve Jobs" you mean "all US companies and their lawyers", yes.
    9 Dec 2012, 10:35 AM Reply Like
  •  
    From my research there are 6034 active patents owned by EK. Oddly in 2006 over half the patents that came up for renewal were allowed to expire.

    Shareholders should have held management responsible for that. You don't flush a 1000 patents down the toilet because your mad about the light bill or the toner costs!

    If I were Apple or Google I would keep the clown carnival of bids going so that the distracted EK management forgets to pay the renewal fees again due to all the pretty zeros in the bids. They're entitled to some zeros alright.
    8 Dec 2012, 03:30 PM Reply Like
  •  
    CLU, you should look at those patents though most of them probably were related to outdated technologies that are no longer in use... how much are patents on camera film and beepers worth today? Probably less than the cost of renewing patents.
    8 Dec 2012, 07:46 PM Reply Like
  •  
    The vast majority of cameras are smaller than a postage stamp, less them 1/4" thick, have no moving parts, and only the rarest of hobby devices use film. There are almost no 23+ year old patents that apply to a modern camera.

    A patent on a mechanical shutter release is pretty pointless in Today's markets. Film processing patents, patents on 23 year old flash bulb lighting technology, putting time stamps on film, or recycling silver nitrate. All of these 23+ year old technologies are worth less than the cost of keeping the lights on. Many of those patents were likely renewed at least once. Kodak is an old company with tons of ancient IP which isn't worth protecting.

    The $500 million patent portfolio being bid on only contains 1,100 patents. (ref: http://on.wsj.com/UNGO6K)
    9 Dec 2012, 07:40 AM Reply Like
  •  
    IBM used to give away patents ...
    9 Dec 2012, 01:37 PM Reply Like
  •  
    I thought I was publishing about AAPL. I'll be glad to accommodate you after that.
    9 Dec 2012, 06:09 AM Reply Like
  •  
    Google and Apple are the main players in the future.
    9 Dec 2012, 09:10 AM Reply Like
  •  
    I'm OK with that! Both are bringing more production to the US, both *make* things (esp. Apple, but increasingly Google), both provide decent standards-of-living for their workers (disregarding overseas subcontractors)...

    If AAPL & GOOG are hiring, the US unemployment is probably dropping, and our GDP is going up.

    I just don't want them too cozy... Competition, and the chance for a startup to challenge them on innovation and efficiency.
    9 Dec 2012, 10:39 AM Reply Like
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