You remember Kodak, right? Just in case you do not, Kodak used to be a camera film maker. It owned the market when it comes to a wide variety of pre-digital photo technologies. In fact, Eastman Kodak used to be quite a huge company and a global brand name. Sadly, it has become one of the biggest casualties of an industry that has been irrevocably transformed by the internet and digital technology. Kodak just could not cope with the pace of changes. Within a span of several years, we went from Kodak film to fully digital cameras and digital image capturing devices that skipped the camera component. There are just so many ways to not only capture images but to process them. The internet blew up all around Kodak and truly it sent the company spinning because its corporate structure, its R&D department and its whole business model could not cope up with the speed. This is one business school case of a company being unable to keep up with changes.
Interestingly enough, beyond the tragedy that befell Kodak and its shareholders and employees, there might be a silver lining for new technology companies in the form of Microsoft, Google and Apple. How? Of course, they are not going to be circling like vultures around Kodak’s analog and older imaging technologies. However, there is quite a bit of value in its digital capture and Kodak imaging systems and services patent portfolios. Let us make a quick review on patent portfolios and the value to existing players. As you probably remember, the previously high flying mobile hardware manufacturer and communications technology leader Motorola was bought out by Google, not because of its hardware component per se, but primarily for its patent portfolio. Google is caught in a telephony technology battle with Microsoft, Apple and other players, so it needed as much patent protection as it could. That is why it acquired Motorola primarily for its patent portfolio.
The same dynamic could play out in the digital space not so much for legal protection, but primarily for technology directions in the imaging space. That is why when Eastman Kodak got court approval from the bankruptcy court to auction off its digital capture and imaging system patent portfolio, it caught the attention of Microsoft, Google and Apple. The digital imaging space is a huge space and it might help not just to find the technology directions of Google, Apple and Microsoft, but also provide an added layer of legal protection, especially considering the fact that Kodak just lost a case against Apple and Research in Motion, the maker of Blackberry, because the court ruled that the two hardware companies did not violate Kodak’s patents. Kodak has a huge digital imaging technology patent and some industry observers estimate that the portfolio could easily be worth between $2 to $3 billion dollars. From a purely legal perspective as well as possible ideas in terms of legal protection for technological directions and trends in terms of imaging, this might be a good buy to the right buyer.