Back in August, a report popped up claiming that Apple and Google had teamed up to put a bid in for Kodak’s patents. The company, once a staple in the photography industry, declared bankruptcy this year and is selling off its IP to help pay its debts.
Well the story resurfaced tonight, with a follow-up report from Bloomberg confirming that Google and Apple are indeed working together to buy Kodak’s IP. The two are said to be offering more than $500 million to buy 1,100 of Kodak’s imaging patents…
“Apple Inc. (AAPL) and Google Inc. (GOOG) have joined forces to offer more than $500 million to buy Eastman Kodak Co. (EKDKQ)’s patents out of bankruptcy, said two people with knowledge of the situation.
The two companies, competing for dominance of the smartphone market, have partnered after leading two separate consortia this summer to buy Kodak’s 1,100 imaging patents, said the people, who asked not to be identified because the process is private”
It’s not unlikely for competitors to work together in large-sum patent auctions. Last summer, Apple led a consortium that included the likes of Microsoft, Research In Motion, and other rivals to purchase some 6,000 wireless patents from Nortel Networks.
Previous reports indicated that Apple had originally teamed up with Microsoft and Intellectual Ventures, a patent holding firm, to buy the Kodak patents and Google was working with its hardware partners, but there’s no mention of why they came together.
One likely reason is to prevent a bidding war. In the aforementioned Nortel auction, Apple and Google were on opposite sides and the winner, Apple’s group, ended up paying more than $4.5 billion for the patents. Working together, they may be able to keep the price down.
There’s no word on whether or not Kodak has accepted the offer, but considering that its commitments for $830 million exit financing it obtained last month are dependent on its sale of its digital imaging patents for at least $500 million, it seems like a no-brainer.