Technology companies including Apple Inc and Google Inc won court approval of a US$527 million deal for Eastman Kodak Co patents that are being sold as part of Kodak’s bid to exit bankruptcy protection.
The agreement, approved at a hearing on Friday by US Bankruptcy Judge Allan Gropper in New York, is worth less than the more than US$2 billion value of the patents estimated by a Kodak advisory firm.
Gropper acknowledged that the company was “disappointed” in the price.
“But we’re moving the case forward, so we should be optimistic,” he said.
The group, which also includes Microsoft Corp, Amazon.com Inc, Facebook Inc, Research In Motion Ltd (RIM) and Samsung Electronics Co, came together after Kodak won bankruptcy court approval last year to auction more than 1,000 patents related to the capture, manipulation and sharing of digital images.
Kodak, based in Rochester, New York, filed for bankruptcy in January last year and began the auction in August. The company said in court papers that a previous estimate of as much US$2.6 billion for the patents “was not achievable.”
Michael Torkin, an attorney for Kodak, said the sale agreement is the best deal the company could get and that it achieves “patent peace” by settling litigation.
Kodak has said it will receive about US$525 million from the transaction.
Before joining forces, Apple and Google had led competing groups bidding for Kodak’s patents, people familiar with the situation previously said.
Combining allowed each company to only pay for the patents and protection it needed.
Partnerships are formed in patent sales because they allow competitors to neutralize potential infringement litigation.
A group including Apple, Microsoft and RIM bought Nortel Networks Corp’s more than 6,000 patents for US$4.5 billion out of bankruptcy.
Google lost the auction for those patents after making an initial offer of US$900 million.
A ruling against Kodak by the US International Trade Commission dealt a blow to the company’s pursuit of a higher price for its patents.