Things aren’t looking good photography giant Kodak. The company was hoping to sell off some of the patents it holds in an effort to pay creditors and emerge from bankruptcy. However, Kodak is failing to generate interest in its patent portfolio in the wake of one of its major patents being ruled invalid back in May.
Kodak has been trying to attract what’s known as a Stalking-Horse bidder on its patent portfolio. This sort of bid is when a company comes in and bids a set amount to generate interest in the auction. Typically, if the Stalking-Horse bidder is outbid, they get some sort of breakup fee as a consolation. According to analysts, this sort of bidder usually increases the selling price of the stock portfolio by creating urgency with other bidders. Much of the reason for Kodak’s inability to generate interest in its patent auction stems from a court ruling that a key patent Kodak held was invalid. That key patent had to do with image previewing for digital cameras.
The reason that invalidation hurt Kodak so much was because it was considered the crown jewel patent for one of two portfolios going up for auction. Kodak has been using that patent for two years in an effort to squeeze licensing fees out of major smartphone makers, including Apple and RIM. Kodak has previously said it will appeal the court’s ruling in patent. If Kodak fails to attract a Stalking-Horse bidder, it could be forced to liquidate patents and other assets hurting its chances of generating the revenue needed to emerge from bankruptcy.