ROCHESTER (dpa-AFX) - Eastman Kodak Co. (EK), has begun selling its patents as smartphone and tablet makers vie for cutting-edge technologies, the Wall Street Journal said Wednesday. Following the report, Kodak shares gained over 25.0 percent in Wednesday's regular session, and a further 7.4 percent in extended trade to close at $2.89.
One probable buyer is a large player in the wireless industry seeking to use the patents for defensive protection. Kodak is marketing its patents through investment bank Lazard Ltd.
Kodak's move couldn't have come at a better time as technology companies clamor to acquire key patents that could to carve a niche for themselves.
Google (GOOG ), last Monday, agreed to acquire Motorola Mobility Holdings Inc. (MMI) for about $12.5 billion. Motorola Mobility has one of the strongest patent portfolios in the industry with over 17,000 patents and 7,500 pending. Earlier in July, a consortium including Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Research In Motion (RIM, RIM.TO) acquired 6,000 patents from Nortel Networks Corp. (NRTLQ.OB for $4.5 billion.
Kodak sees patent sell-off as a way to rake in money, a supplement to its licensing strategy, which through 2008 to 2010, had brought in about $1.9 billion.
The move is not unexpected, as Kodak, in July, revealed it is exploring strategic alternatives for its digital imaging portfolios.
At that time, Kodak said about 10 percent of its total U.S. patent portfolio will be on the block. This includes more than 1,100 patents pertaining to capturing, processing, storing, editing, and sharing digital images. The company, earlier in February, had said it expects to generate about $250 million to $350 million per year in intellectual property revenue through 2013.
Kodak is also on a warpath with Apple Inc. (AAPL) and Research In Motion Ltd.(RIMM, RIM.TO) over its digital imaging patents. In July, the U.S. International Trade Commission reaffirmed its stand that Kodak does not violate Apple's patent rights, and that one of two patents in dispute is invalid. Kodak is seeking more than $1 billion in royalties from Apple and RIM through the lawsuit.
EK closed Wednesday's regular trade at $2.69, up $0.55 or 25.70%, on a volume of 58.0 million shares on the NYSE. In after hours, the stock gained $0.20 or 7.43%.
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