Eastman Kodak will get $525 million for its patents to help it emerge from bankruptcy. The Rochester, NY company has been trying to find a buyer for some time as part of its deal for new financing.
Kodak has struggled in recent years since the adaption of digital photography. It originally put the patents for digital imaging up for sale in January 2011 but couldn’t find an interested buyer.
Kodak has decided to leave behind certain areas of its business, including digital cameras, pocket video cameras, and digital picture frames. Instead, it plans to focus on the commercial aspect of the business and packaging printing.
The company is selling 1100 patents to a group of licensees that are part of the Intellectual Ventures and RPX Corporation. Each of the licensees will pay a portion of the total cost and then they will be given access to all of the patents. One of the companies included in this group is Shutterfly Inc. Kodak had already sold its online photo service business to the company earlier in 2012.
Kodak will still hold over 9600 patents that are mainly focused on the commercial imaging and printing aspects of its business.
The list of companies in this group are headlined by Apple and Google. Rumors had provided an indication that Apple and Google were working together on a deal to buy the patents from Kodak several months ago. The offer was lower than the $525 million that Kodak is getting, but made up the bulk of the total.
The company was required to get $500 million from the sale of the patents in order to gain financing for an $830 million loan that is cheaper than the original $793 million loan it had. This condition is part of the recovery plan for Kodak after it filed for bankruptcy in January. Getting the deal on the patents means the company can begin its efforts to reinvent itself in the new era of photography.