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Groups backed by Apple, Google win Kodak patents with $525M bid

Erica Ogg — Wed, 19 Dec 2012 14:38:09 +0000

To pay down its bankruptcy costs, Kodak announced Wednesday it has sold off its trove of imaging patents and among the beneficiaries are the biggest names in mobile: Apple and Google. Pooling their resources to offer $525 million, two different consortiums of buyers nabbed licenses to Kodak’s IP. Intellectual Ventures, with whom Apple and Microsoft have teamed up in the past, and the RXP, which counts Google as a client, led the bid. In all, 12 companies will receive licenses.

The other patent licensees in the deal include Samsung, HTC, Faceboook,, Amazon, Fujifilm, RIM, Huawei, Adobe, and Shutterfly.

The news of the sale was first reported by Bloomberg last week, which pegged the offer at “more than $500 million.” Previously, the digital imaging patents had been valued at $2.6 billion.

Wednesday’s announced sale also brings a bit of closure on the legal front: with it, all outstanding patent claims between the 12 licensees and Kodak are settled. That includes Apple’s dispute with Kodak over iPhone and iPad image capture.

Updated at 8:40 a.m. with additional companies named as licensees.

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Apple, Google find common ground, team up to buy Kodak patents for $500M

Erica Ogg — Sat, 08 Dec 2012 15:17:58 +0000

Apple and Google may not agree on the best mobile mapping software. Or the best way to build a mobile operating system. But they apparently can agree on a good deal when they see one: the two companies have reportedly partnered to purchase Kodak’s bundle of 1,100 imaging patents, according to Bloomberg. The offer is said to be more than $500 million.

That the two would partner on a patent deal is somewhat surprising, given that they are direct competitors in making mobile software and selling smartphones and tablets. But Apple is no stranger to entering non-intuitive alliances in order to improve its patent position. In 2011 Apple worked with RIM, Microsoft and Sony to snap up the intellectual property assets of Nortel Networks after that company went bankrupt. A Google-led consortium lost out to Apple’s group.

According to Bloomberg’s sources, both Apple and Google had initially led separate consortiums to try and purchase the Kodak patents this summer — on Apple’s side was Microsoft again and Intellectual Ventures; with Google was a mix of “Asian manufacturers of Android smartphones” and RPX, a group that defensively buys patents for its clients so they can’t be sued by non-practicing entities (patent trolls).

However, it appears that Google and Apple decided it was in both of their best interests to have access to theses patents together, showing that rationality can prevail, even in the midst of “thermonuclear war.”

Just this week Google Chairman Eric Schmidt was reflecting on the necessity that his company work with Apple, despite their differences. He told the Wall Street Journal, “The adult way to run a business is to run it more like a country. They have disputes, yet they’ve actually been able to have huge trade with each other. They’re not sending bombs at each other.”

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Soon you’ll be able to go to CVS and print a book

Laura Hazard Owen — Thu, 13 Sep 2012 14:54:45 +0000

On Demand Books, the company behind the Espresso Book Machine, and Kodak are partnering to add print-on-demand technology to Kodak Picture Kiosks. That means consumers will be able to print paperback photo books, self-published books and the seven million backlist and public domain titles in On Demand’s catalog from retail chains such as CVS.

On Demand also announced a partnership with ReaderLink, which distributes books to grocery stores, drugstores, mass market and club stores, to make more titles available through the Kodak Picture Kiosks.

“We envision an integrated solution that can substantially redefine the publishing industry and bring exciting new solutions to customers,” said On Demand CEO Dane Neller in the release.

There are 105,000 Kodak Picture Kiosks globally; you can find them in chains like CVS as well as photography stores, pharmacies and other retail outlets. The partnership with On Demand launches in the U.S. this year and will expand internationally in 2013.

On Demand Books was founded by former Random House editorial director Jason Epstein; Neller, the former CEO of Dean & DeLuca; and Thor Sigvaldason, a former technology consultant at PricewaterhouseCoopers, in 2003. The company already has a partnership with Xerox that has placed Espresso Book Machines in about 70 bookstores and libraries globally, but the Kodak partnership will expand its footprint substantially.

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Why Kodak’s bankruptcy should scare Nokia

Om Malik — Thu, 19 Jan 2012 23:30:57 +0000

Yesterday, a friend of mine, someone who is quite savvy about technology and the startup landscape stopped by for a chat. Our conversation veered towards the state of the web, media and of course Silicon Valley. The gist of his argument was that in Silicon Valley we have big waves that are followed by many tiny waves and they all come in a cluster. You just need to be riding one of those waves – depending on the boldness of your idea, willingness to risk it all and adapting to a new way of thinking. And if you don’t, then you miss your chance to profit from it.

His words were ringing in my ears when I turned on the computer this morning and read about Kodak’s bankruptcy. Shocking (and sad) as it might be, it is not all that surprising. People have been watching the company’s slow free fall for years. The Economist has a great rundown of what went wrongat the company — I recommend you read that and skip all the news-y nonsense – and my key takeaway from that wonderful piece: you cannot fight the future.

Companies that once were large and massive and failed to adjust to the new reality have been left behind. Xerox that owned the photocopying industry is now a small player in what was essentially its core competency — document management. AT&T used to be a giant wireline phone company that controlled how we communicated with each other. Now it is a cellphone provider and only a component of the way we communicate. Why? Because communication itself has since moved on to a new kind of network and isn’t limited by per-minute billing.

No coming back

Kodak Logo: through the ages

As my friend Pip Coburn says, turnarounds never turn. Kodak has been in restructuring mode for 15 years – cutting headcount, closing factories, tightening belts and squeezing rocks for blood. In other words — the company isn’t fat in a traditional sense. But why none of its strategies worked was because the company took too long and sat on its duff watching digital photography come and eat it for a mid-day snack even though Kodak R&D helped with the digital photo revolution when it launched the first digital camera in 1975.

And yet they failed to do what one of their major competitors – FujiFilm did — embrace digital with both arms and is now thriving. And when Kodak finally did embrace digital in 1993 it did with hesitance that comes when companies are afraid to cannibalize their existing businesses for the sake of the future.

Today Kodak is experimenting with printers, commercial printing and other services as new ways to grow, but one wonders if that will be the path forward. I am pretty sure HP, Cannon and Lexmark have something to say about Kodak’s printing ambitions. And even if it succeeds and survives, it won’t be the Kodak of George Eastman. We might as well call it, a Corporation-Once-Known-As-Kodak!

Kodak, like many other businesses that have failed before it, made one fatal mistake – it forgot the true purpose of its business and instead focused on features, SKUs and products. (I have written about this before.) Kodak continued to define itself by “film” when all it should have done is define itself with “photos” or moments.

Who cared if the photos were on a slide, were printed and placed in albums, in digital cameras or on online sharing services. “The Kodak Moment” is what made that company powerful. Had it looked at the world from that lens it would be been an easy decision to adapt to new technologies and adopt them for benefit of their customers – us! In Mad Men, Don Draper tells the guys from Eastman Kodak when giving a pitch for their slide carousel:

This device isn’t a spaceship. It’s a time machine. It goes backwards, forwards. It takes us to a place where we ache to go again. It’s not called the Wheel. It’s called a Carousel. It lets us travel the way a child travels. Around and around, and back home again… to a place where we know we are loved.

Nokia’s Kodak Moment?

Nokia CEO Stephen Elop

There are many lessons for today’s companies in Kodak’s failure to adapt and eventual bankruptcy. Is Nokia the next Kodak? I hope not – for I like those guys – but Nokia is a likely candidate. Just as Kodak’s internal team was arguing for a digital shift that the top guys ignored, Nokia too, ignored all protestations from its resident experts who argued for an Internet-centric, touch-based and app-driven mobile device. Anyone remember the Nokia 770?

That phone could have been Nokia’s future, instead it is forgotten. Nokia defined itself by a certain kind of a product – the 12-key phone. People at Nokia talked about a multimedia mobile computer, but it couldn’t look beyond those 12 keys. It took Apple and Google to show Nokia how to re-imagine the phone. In doing so they have defined how hundreds of millions view and what they expect from a smartphone. As I have said before – it is too late for the Finnish company.

Sure, Nokia has a brand, global presence and a sizeable marketshare. So did Kodak. It took 132 years, the last 15 of those spent in constant belt tightening, for the photo film company to sink. Having missed the big wave, Nokia doesn’t have the luxury of time.

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Ailing Kodak Files Patent Suits Against Apple And HTC

Jeff John Roberts — Wed, 11 Jan 2012 04:13:23 +0000

Eastman Kodak announced late Tuesday that it was suing Apple (NSDQ: AAPL) and HTC for allegedly infringing four of its imagining patents. The timing of the suits may be strategic as the struggling camera maker has been desperately trying to sell part of its patent portfolio to stave off a bankruptcy filing.

The company stated in a press release that it had filed suit in federal court in its home town of Rochester, New York and that it had also commenced proceedings at the International Trade Commission, a federal body that can ban imports if they infringe US patents.

The patents in question are related to technology for transmitting images. Kodak says Apple’s iPad and iPhone are using this technology as are HTC’s smart phones and tablets.

The timing of the suit is curious in that Kodak’s patent portfolio has been a hot issue for months. Analysts have said selling or licensing the patents may be the 131-year company’s only hope of effecting a turnaround after years of decline. The new lawsuits will not produce any cash in the near future as patent proceedings typically take years. Today’s announcement may therefore a way to show the strength of the portfolio to potential buyers or it may be a threat to other companies using imaging technology to pay a licensing fee to Kodak.

In a separate announcement today, the company said it was implementing a management shake-up and cost-cutting measures (via Bloomberg). Kodak is rumored to be preparing a bankruptcy filing for early February that would permit it to shed debt and restructure.

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Animoto raises $25M to invest in mobile video creation

Ryan Lawler — Wed, 29 Jun 2011 11:30:15 +0000

Cloud-based video creation startup Animoto is ready to invest heavily in its growing business with a new round of funding it’s announcing Wednesday. The company has raised $25 million, led by Spectrum Equity Investors with participation from existing investors Madrona Venture Group and Amazon.com.

Animoto runs a freemium service that lets users create short video slideshows from collections of pictures and videos that they have on their computers or mobile phones. If they want more features, such as custom templates or longer videos, users have the option to pay a small one-time fee for individual slideshow creation or a subscription for an unlimited number of slideshows.

So far, that model has been working pretty well: Animoto has more than 3 million users, who together have created about 15 million videos. But it sees an opportunity to grow faster and to attract more users, particularly through the development of mobile apps and by striking partnerships with third-party photo- and video-hosting sites. Thanks to the Animoto API, Kodak Gallery, American Greetings’ Webshots and Aviary.com are now also offering the web-based video creation service to their customers.

But the key to Animoto’s future might be in mobile, according to CEO Brad Jefferson. Mobile users are increasingly using their smartphones to shoot pictures and videos, and Animoto wants to make it easy for them to create and share slideshows with friends. At the same time, Animoto recognizes that it needs to invest heavily not just to keep pace with the competition but to beat it.

“It’s very easy for companies around mobile and photos to fall behind,” Jefferson said. “We want to be the [mobile] leader and accelerate development through this period of innovation.”

Right now Animoto has just an iPhone app, but it Jefferson said it’s evaluating other mobile app platforms. With that in mind, and with a view to also invest in its core product, Animoto is aggressively adding to its headcount. It has 60 employees now, compared to about 34 employees at the start of the year, with plans expand that to 90 employees by the end of 2011.

This round of financing is the first since 2009, when Animoto raised $4.4 million. In addition to the funding, Animoto has announced that Spectrum Equity Investors Managing Director Ben Sphero will join the company’s board of directors.

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Kodak Faces Another Polaroid Moment in Apple, RIM Dispute

Darrell Etherington — Fri, 25 Mar 2011 15:36:43 +0000

UPDATED. A ruling today on whether or not Apple and Research in Motion violated a patent held by Kodak could add more than $1 billion in revenue to the camera company’s bottom line, according to Kodak CEO, Antonio Perez (via Bloomberg), but only if a court overturns an existing ruling against Kodak.

Update: The ITC has ruled that it will review the judge’s findings from January that say RIM and Apple don’t violate Kodak’s patent. The ITC will deliver a final decision by May 23.

The U.S. International Trade Commission (ITC) will be the ultimate arbiter of Kodak’s fate in this matter. Judge Paul Luckern already ruled in January that Apple and RIM weren’t in violation of Kodak’s patents, which describe a system for image-previews on camera phones. However, Kodak settled with Samsung and LG for allegedly infringing on the same patent, netting a total of nearly $1 billion from the two companies in combined royalty payments after those companies were faced with the possibility of being shut out of the U.S. cellphone market.

While the ITC can’t assign punitive monetary measures in cases like this, it can block the imports of products it finds infringe on U.S. patents, which means the iPhone and BlackBerry devices could be blocked from sale in the U.S. if the ITC finds in Kodak’s favor. Because that would mean an immense amount of lost revenue, companies often opt instead to settle in advance of a ruling and avoid an injunction. The decision today will determine whether or not the ITC will review the judge’s January findings, and if it does, a final decision on the matter would be forthcoming by May 23.

The stakes are high in this case, but much more so for Kodak than for the companies it’s claiming infringed on its patents. A win for Kodak means significant boost to its overall revenue picture, since the resulting royalties would be pure profit without any overhead outside of legal fees for the case. Jim Kelleher, an analyst with Argus Research points out that “most of Kodak’s operating businesses lose money,” so an IP income stream this significant would add considerably to the $838 million it made from patents last year. Income from patent royalties continues to eclipse the revenue Kodak takes in from its other lines of business, including cameras, printers and software. We reached out to Kodak for comment on what a loss would mean for the company’s business, but have yet to hear back. We’ll update as necessary.

If the ruling goes against Kodak, it could potentially cut off the company’s ability to lay claim to any other patent revenues related to the use of camera phone previews. In 1989, for example, Kodak lost a patent battle with Polaroid regarding instant photography, and essentially had to cede the then-lucrative market entirely to Polaroid. Digital images eventually steamrolled the instant camera space, but Kodak still missed out on billions in potential revenue.

Apple and RIM have countersued Kodak in federal court, and Apple filed a complaint against Kodak with the ITC, too, following Kodak’s original complaint submission. Apple and RIM stand to take a hit on their gross margins if Kodak succeeds, but if the photography company fails, it stands to lose much, much more.

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Green IT Winners and Losers of 2009

GigaOM Pro — Mon, 21 Dec 2009 16:00:42 +0000

As the year winds to a close, GigaOM Pro’s crack team of contributors takes a look back at what went right, what went wrong, and for whom in the world of Green IT.

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