Kodak to receive $525 million under patent monetization agreements

By Caroline Salls

Pittsburgh, Dec. 19 - Eastman Kodak Co. completed a series of agreements that successfully monetizes its digital imaging patents, according to a company news release.

Under the agreements, Kodak will receive about $525 million, a portion of which will be paid by 12 intellectual property licensees organized by Intellectual Ventures and RPX Corp.

The company said each licensee will receive rights related to the digital imaging patent portfolio and some other Kodak patents.

Another portion of the $525 million will be paid by Intellectual Ventures, which is acquiring the digital imaging patent portfolio subject to these new licenses, as well as previously existing licenses.

"This monetization of patents is another major milestone toward successful emergence," Kodak chairman and chief executive officer Antonio M. Perez said in the release.

"Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company.

"This proposed transaction enables Kodak to repay a substantial amount of our initial DIP loan, satisfy a key condition for our new financing facility and position our commercial imaging business for further growth and success," Perez said in the release.

Litigation settlement

According to the release, the transaction also includes an agreement to settle current patent-related litigation between the participants and Kodak.

The company said the settlement avoids additional litigation costs and helps ensure that management and the company's resources focus on enhancing the operations of its core future businesses.

Recent accomplishments

Kodak said the proposed transaction, which achieves one of its key restructuring objectives, follows other recent major accomplishments that include an agreement for interim and exit financing for the company's emergence from its Chapter 11 restructuring and resolution of U.S. retiree non-pension benefits liabilities.

Kodak's monetization of IP assets further builds on its momentum toward a successful emergence in the first half of 2013, the company said in the release.

The transaction is subject to court approval and the satisfaction of customary conditions.

Shutterfly license deal

In a separate news release, Shutterfly, Inc. said it entered into an agreement to license 1,100 Kodak imaging patents, as well as other patents that Kodak is keeping as part of its ongoing business.

"As the market leader in digital personalized photo products and services, Shutterfly continues to invest in its intellectual property portfolio through licensing and internal innovation, which includes 55 patents granted and more than 50 patent applications in the U.S. and abroad," Shutterfly president and CEO Jeffrey Housenbold said in the release.

"We've partnered with a consortium of global technology firms to come to an agreement that supports the business objectives of all parties involved."

Shutterfly said this proposed agreement also dismisses current patent-related litigation between Shutterfly and Kodak.

Kodak is a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets. The company filed for bankruptcy on Jan. 19, 2012 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 case number 12-10202. Shutterfly is a Redwood City, Calif., internet-based social expression and personal publishing service.

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