Eastman Kodak has not been doing well recently, but now Apple and Google have teamed up to offer more than $500 million to buy their patents out of bankruptcy, according to Bloomberg. The patents for sale deal with the capture, manipulation, and sharing of digital images. The company is looking to sell their patent assets to fund a turnaround after seeking Chapter 11 protection in January.
The two tech giants who have been competing heavily for dominance over the smartphone market have set aside their differences to buy some of Kodak’s 1,00 imaging patents. When bidding started this summer the two had led different teams, with Apple’s group included Microsoft and Intellectual Ventures Management LLC, while Google’s group included RPX Corp and some Asian makers of Android phones. Each group had previously offered less than $500 million separately, but now they can offer more together.
Unlikely partnerships stem from patent sales because competitors can neutralize potential infringement litigation. Previously a group that included Apple, Microsoft, and Research in Motion bought Nortel Networks’ more than 6,000 patents for $4.5 billion out of bankruptcy last year. Google had lost the auction with its initial $900 million offer. According to Richard Ehrlickman, former former vice president of Intellectual Property at IBM and president of patent brokerage and consulting company, IP Offerings, “Apple and Google learned a lesson from the Nortel’s auction,” and that “They have decided to come together in this process to reduce the cost of purchasing the Kodak patents, while meeting their business needs.”