In order to stay profitable, New Jersey businesses must produce a good or a service that consumers want to purchase. Without having money coming in, a business cannot stay profitable for long. Sometimes, a business can earn money from less traditional sources, like its intellectual property. In many cases intellectual property rights can be highly desirable to other companies in the same or similar fields. These rights may contain products or processes that other companies need to survive. Take for example the recent sale of patents by Eastman Kodak Co.
Over the last several years, Kodak has struggled to make profits as consumers quickly switched from traditional photography to digital photography. In the volatile marketplace, Kodak was unable to keep up with its competitors and quickly fell into debt and eventually bankruptcy. In order to pay off some of the debt Kodak has accumulated as it has restructured itself in bankruptcy, the company decided to sell its patents for digital imaging.
The patents themselves were initially put on the market in July 2011. However, Kodak did not find a buyer until recently. At first experts thought the patents would sell for between $2 billion and $3 billion. However, the deal fell short of expectations. The 1,100 patents ended up going for $525 million to 12 licensees. Despite selling for less than initially anticipated, these patents have still generated much-needed capital for Kodak, which can now move forward as it focuses on commercial printing.
Selling intellectual property outright is just one of many ways to profit from intellectual property. Licensing agreements can be drafted that allow certain individuals or companies to profit from different types of intellectual property. These agreements must strike a fine balance between protecting business concepts and allowing a business to make money from its ideas.
Source: The Record, “Kodak to receive $525 million from patent sale,” Dec. 20, 2012
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