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Kodak emerged from bankruptcy protection last week after spinning off business units and re-focusing on business-to-business imaging services. While the company still has some way to go on the road to recovery, the critical role that intellectual property has played in its survival shows that valuable intangible assets can get companies out of sticky situations and turn their fortunes around.
Prior to filing for Chapter 11 bankruptcy protection in January last year, struggling Kodak put a tranche of around 1,100 digital imaging patents up for sale in July 2011 with some estimates valuing the portfolio at well over $2 billion.
So when those patents were eventually sold in December last year, it may have been at a price far below Kodak’s expectations. But the fact that two of the largest patent aggregators – along with leading operating companies including Apple, BlackBerry, Facebook, Google, Microsoft and others – joined forces to acquire the assets indicates that they do hold significant strategic importance for the high tech industry, which is something of a validation of Kodak’s long-term R&D investment.
Furthermore, Kodak retains ownership of around 7,500 patents, these will allow it freedom to operate in the areas where it plans to do business and can also be monetised in the future. And most importantly of all, Kodak still holds its most value intellectual asset of all – its brand.
The Kodak name enshrines around 130 years’ worth of investment in product development and marketing, and it remains arguably the most renowned photography brand in the world today. Speaking to CIO Today, Information Technology Intelligence Consulting analyst Laura DiDio points out that Kodak could create enormous value if it can successfully attach its name – typically associated with traditional, end-consumer photography products – to its new business-targeted imaging products and services.
But with a quality asset like that at its disposal, the company can in a sense continue to operate in those consumer markets it once dominated. Even during its bankruptcy, the company has continued licensing out its brand for other manufacturers to use on their photography products and services. In doing so, it has maintained a presence in the markets it has exited. There is little doubt that this will continue and presumably at least some of that goodwill will translate over to its new B2B niche.
Despite its troubles, Kodak is a company that has clearly understood and appreciated the strategic value of its intellectual assets for a long time. If things go well for the company in its new incarnation, then the patent sale and brand licensing efforts that have taken place in the context of its bankruptcy could prove to be one of the great IP success stories.
Licensing, Brands, IA management, Patents, IP business