InterDigital

According to the Wall Street Journal, Kodak has started the process of auctioning off some or all of its lucrative patents. Kodak’s demise is well documented as the once $30B company has seen its market cap slide to around $800m as the digital imaging company has continuously lost share to competitors. According to the WSJ one potential bidder is “a large, strategic buyer in the wireless industry looking to use the patents for defensive protection.”

This news comes on the tails of this past Monday’s acquisition of Motorola Mobility by Google for a whopping $12.6B in cash. Google has long been rumored as potential suitors of multiple patent-holding companies such as InterDigital, Kodak and of course Motorola Mobility. If these Kodak patents do sell, they will not gather nearly as high of a price as the Motorola deal, but could likely see Kodak’s stock take a nice move up.  This morning’s news of one analyst saying Kodak’s patents could be worth 5x the company’s market cap sent shares up more than 25% and are currently up more than 5% in after hours trading on the latest Wall Street Journal news.  Meanwhile, InterDigital saw a pop in its shares today as another rumor was swirling that an auction will take place after Labor Day weekend and that there are multiple interested parties.
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Over the past few weeks, the patent arms race has been accelerating and the latest comes in a Bloomberg story that has old frenemies – Apple, Google and Samsung – locked in a fight for InterDigital’s patent portfolio. Samsung is said to be interested the most in InterDigita’s intellectual property their CEO claims is “stronger” than the 6,000 Nortel patents the Apple-led consortium recently acquired for $4.5 billion. People familiar with the matter tell the publication Samsung has been “approached to make a bid”:

Samsung is looking at the patents along with Apple Inc. (AAPL), Google Inc. (GOOG) and other potential bidders, said the people, who asked not to be identified because the talks are private. InterDigital, which holds patents related to mobile technologies used to transfer information, said last month that it hired bankers as it considers a sale.

InterDigital’s patent portfolio covers technology for high-speed cellphone networks “now used by the world’s biggest handset makers”, including Apple’s iPhone as well as BlackBerry and Android phones. The portfolio includes 8,000 patents in total and is estimated to be worth $5 billion or more. “To hedge the risk, Samsung could go ahead with bidding, although they may have to pay a big premium”, says  Shinyoung Securities Co. analyst Lee Seung Woo…

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In order to acquire more patents, Wall Street Journal is reporting Google is in talks with InterDigital regarding an acquisition. In past weeks, Google lost the bidding war against Nortel, which would of landed the company numerous amounts of patents. Currently, Google has a small portfolio of patents which could lead to lawsuits over Android. For Google, the only logical thing is to acquire more. As CNet notes:

“We continue to be optimistic about the prospects for the company under its current business plan,” Terry Clontz, InterDigital’s chairman, said in a statement. “That said, over the past year we have seen the value of intellectual property rise substantially as major players in the mobile industry increasingly understand the strategic and economic value of this type of asset.”

As of now these talks with InterDigital are preliminary and no price has been set.  Apple is also rumored to be involved.