Apple Cozies Up to Google for Kodak Patent Deal
Apple's rumored odd-couple alliance with Google to buy Kodak patents is primarily a defensive opportunity for both companies to gain access to a broad portfolio and share in the underlying costs, said patent attorney Douglas Sorocco. "Both parties are looking to insulate themselves from patent infringement claims if a third party got their hands on one or more of the patents."
Dec 12, 2012 5:00 AM PT
In what may seem like an unlikely partnership, Apple and Google -- fierce rivals that have gone head-to-head in patent battles -- might be teaming up to buy Kodak's patents and help it avoid bankruptcy.
Apple and Google are offering the camera company more than US$500 million for 1,100 patents, according to Bloomberg. Kodak has valued its portfolio between $2.2 and $2.6 billion.
The patents include rights to technology for capturing, manipulating and sharing digital images. Over the past year, Kodak has been struggling, trying to auction off its vast patent portfolio to get the cash it needs to stay afloat.
Although Apple and Google usually don't bargain on the same side, an arrangement like this one isn't unusual, said Douglas Sorocco, patent attorney at Dunlap Codding.
"It's fairly common for competitors to join together to purchase broad portfolios. You just don't hear about it much until it's a fairly substantial number being paid," he told MacNewsWorld.
"The thinking is usually defensive in nature. Both parties are looking to insulate themselves from patent infringement claims if a third party got their hands on one or more of the patents," Sorocco explained. "It also provides the parties access to a large portfolio of patent assets that they can use to counterclaim -- or threaten to counterclaim -- against someone who may bring a patent lawsuit against them."
Normally, that defense could be especially helpful for Apple, which is fighting Samsung in courtrooms around the world. In the Kodak patent buy case, however, Apple's partnership with Google could be doing more for Samsung than Apple might like, suggested Sorocco.
"Generally, this move probably is more helpful to Samsung, as they work closely with Google and the Android operating system," he pointed out.
Still, the move makes sense from both sides, Sorocco continued. As much attention as Apple's high-profile battle with Samsung gets, it's not the only patent war the company is waging. Teaming up with a noted rival to increase its portfolio could be a move that ultimately saves precious legal resources in the future.
"My read is that this is primarily a defensive opportunity for both Apple and Google to gain access to a broad portfolio of technology patents and share in the underlying costs," Sorocco observed.
"Both companies get what they want -- freedom from suit and potential bargaining chips -- and share the cost of doing so," he pointed out. "It's a pretty smart strategic and financial decision and doesn't significantly impact the underlying disputes the companies have with one another on their core technologies."
Apple made headlines this week when CEO Tim Cook announced that some of the company's Mac computer line will be manufactured domestically, with operations moving from China to the U.S.
The move has been in the work for years, Cook claimed. Exactly which computers will be made in the U.S. is unknown, but rumors point to the iMac.
Apple plans to spend more than $100 million over the next year to oversee an operational switch from Foxconn, which makes the majority of Apple products overseas, to factories in the U.S., Cook noted.
The company has taken heat in the past for not doing more to improve the working conditions and wages in overseas electronics manufacturing plants such as Foxconn. It's questionable whether Apple's move to bring production back to the U.S. will diminish that criticism.
"I think this is a really savvy public relations stunt by a corporation that has no actual intentions of cleaning up its supply chain," said Taren Stinebrickner-Kauffman, founder and executive director of SumOfUs.
"For years, Apple's been making and breaking promises when it comes to ethical sourcing and how it treats its workers," Stinebrickner-Kauffman told MacNewsWorld. I hope consumers aren't taken in by it, but instead demand evidence of actual change from Apple."
Apple did not respond to our request to comment for this story.