Apple joins hands with Google to bid for over $500 million Kodak patents

Apple Inc. and Google Inc. came together to offer moreimage than $500 million to buy Eastman Kodak Co. (EKDKQ)’s patents out of bankruptcy.

Why Apple and Google came together despite being competitors?

  • Despite being competitors in the smartphone market, the two companies have joined hands in order to reduce the individual cost of purchasing the Kodak patents, while fulfilling their business requirements.
  • These kinds of partnerships in patent sales are very typical because they allow competitors to neutralize potential infringement litigation.

Companies in Apple-led group:  Microsoft and Intellectual Ventures Management LLC

Companies in Google-led group: RPX Corp. and Asian makers of Google’s Android phones. The two groups had separately offered less than $500 million for Kodak’s portfolio.

Why Kodak is its selling patents?

  • Kodak which sought protection under Chapter 11, is selling patents to fund a turnaround.
  • It is also following a plan to shrink the company and focus less on photography and more on commercial, packaging and functional printing and enterprise services.
  • The company showed $5.1 billion in assets and $6.75 billion in debt in its bankruptcy filing. It plans to exit bankruptcy in the first half of 2013.

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