Reports of Kodak’s sale of some of its digital imaging patents tend to be misleading, writes Peter Coleman.

The US$525 million deal for purchase and licenses is real enough, and will help the US company move from its present Chapter 11 bankruptcy. But the headlines that announce ‘Kodak sells its imaging patents’ – implying all of them – are sloppy journalism.

The company announced on December 19 that a consortium organised by Intellectual Ventures and RPX Corporation was going ahead with the deal, following a series of agreements. Companies including Apple, Google, Samsung, Microsoft and RIM have been named as participants in the deal.

Some of the money comes from 12 intellectual property licensees, each of which will receive some rights to the patent portfolio and “certain other Kodak patents”. Intellectual Ventures is also paying to acquire the digital imaging patent portfolio subject to the new and existing licenses.

Importantly, the transaction ends current patent-related litigation: Kodak gets a settlement of its claims and saves the ongoing expense of fighting them in court… and gets to focus on it future.

But while it fits with Kodak’s move out of consumer business – no more cameras and kiosks – the cupboard that had been stocked over decades of technology development and company acquisitions, is by no means empty.

According to Alexander Poltorak of intellectual property firm General Patent, quoted by Jessica Leber of MIT Technology Review in August, “they are keeping the best patents for themselves”.

Bloomberg has reported that Kodak still owns 9600 patents and will be using its portfolio to focus on commercial printing and packaging. That’s the bit that matters to newspaper publishers, thousands of which use Kodak technology to make printing plates every day. And to a much smaller number leveraging the company’s patented inkjet systems for digital newspaper printing.

Here perhaps is the future: Digital newspaper printing is currently a technology ahead of its time – a product looking for a business model – but that opportunity continues to get closer as the proposition improves.

Chairman and chief executive Antonio Perez says the patents deal is “another major milestone toward successful emergence”. Kodak will be able to repay a substantial amount of its initial DIP loan, satisfy a key condition for its new financing facility, and “position its commercial imaging business for further growth and success”.

Significantly, it allows the company to focus on the clever stuff, rather than being distracted by markets in which the ‘Kodak moment’ has been overtaken by time.