Kodak completes $527 million patent sale and licensing transaction

By Caroline Salls

Pittsburgh, Feb. 1 - Eastman Kodak Co. completed a transaction for the sale and licensing of its digital imaging patents for net proceeds of $527 million, according to a company news release.

The company said the transaction, which achieves one of Kodak's key restructuring objectives, follows other recent major accomplishments that include final court approval for its interim and exit financing.

Kodak said its monetization of IP assets further builds on its momentum toward emergence in mid-2013.

According to the release, a portion of the $527 million was paid by 12 intellectual property licensees organized by Intellectual Ventures and RPX Corp. Another portion was paid by Intellectual Ventures, which acquired a substantial majority of the digital imaging patent portfolio subject to these new licenses, as well as previously existing licenses.

"The licensing and sale of our digital imaging patents is another major milestone toward successful emergence," Kodak chairman and chief executive officer Antonio M. Perez said in the release.

"We are on track to emerge as a profitable, sustainable company."

The company said the completion of the sale enables it to repay a substantial amount of its initial debtor-in-possession loan, satisfy a key condition for its newly approved financing facility and position its core commercial imaging business for future growth and success.

Kodak said it retained significant competitive advantages and strong growth prospects in its core commercial imaging businesses. In addition to retaining rights to use the 1,100 digital imaging patents sold in the transaction, Kodak maintained ownership of about 9,600 patents, including many focused on its core business.

The transaction also includes an agreement to settle current patent-related litigation between the participants and Kodak, which avoids additional litigation costs and helps to ensure that management and the company's resources focus on enhancing core operations, the release said.

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.

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