Apple Inc and Google Inc have joined forces to offer more than US$500 million to buy Eastman Kodak Co's patents out of bankruptcy, said two people with knowledge of the situation.
The two companies, competing for dominance of the smartphone market, have partnered after leading two separate consortia this summer to buy Kodak’s 1,100 imaging patents, said the people, who asked not to be identified because the process is private.
Unlikely partnerships are typical in patent sales because they allow competitors to neutralise potential infringement litigation. A group including Apple, Microsoft Corp and Research in Motion Ltd bought Nortel Networks Cor's more than 6,000 patents for $4.5 billion out of bankruptcy last year. Google lost the auction for those patents after making an initial offer of $900 million.
The Apple-led group pursuing Kodak's patents included Microsoft and Intellectual Ventures Management LLC as of this summer, the people said, while Google’s consortium included patent aggregation firm RPX Corp. and Asian manufacturers of Google’s Android phones.
Niki Fenwick, a spokeswoman for Mountain View, California- based Google, said the company does not comment on rumour or speculation. Christopher Veronda, a spokesman for Rochester, New York-based Kodak, declined to comment on the patent sale, citing a court-ordered confidentiality agreement. Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment.
Debtor Financing
The Wall Street Journal reported this week that a consortium offered more than $500 million for Kodak’s digital patents.
Kodak obtained commitments for $830 million exit financing last month, contingent on its sale of the digital imaging patents for at least $500 million.
The 132-year-old photography pioneer filed for bankruptcy protection in January, listing $5.1 billion in assets and $6.75 billion in debt. The company plans to exit bankruptcy in the first half of 2013.
The case is In re Eastman Kodak Co, 12-10202, US Bankruptcy Court, Southern District of New York (Manhattan).