What’s Worth More: Kodak’s Patents, or Its People?

kodak edison Whats Worth More: Kodaks Patents, or Its People?

Quick, to the patent office!

Tim Carmondy has an interesting piece up on Wired’s Epicenter blog about the value of Kodak’s patent portfolio. Following the massive $12.5 billion purchase of Motorola by Google, and the recent record setting $4.5 billion auction for Nortel’s patent portfolio, it’s a seller’s market for ailing tech companies with large and storied troves of patents.

Kodak has an incredible array of patents in the mobile photo space dating back to the early 20th century. While it might seem odd that patents on vintage cameras could be valuable in the age of Instagram, when it comes to defending a patent in court, the more prior art a company can own, the better. It’s the reason Bloomberg recently ran a story entitled, Kodak Worth More in Breakup With $3 Billion Patents: Real M&A.

Step back for a second and think about this. A patent is a government granted monopoly. The idea is to exchange a period of exclusivity, during which an inventor can reap the rewards of his or her labor, for that knowledge entering into the public domain after the patent expires. Of course, Kodak’s patents are now decades, even centuries old. And they are being brought to bear on a market which iterates in six months cycles.

But the greatest irony comes when you step back and look at the overall American economy. Betabeat is working on a feature piece about an innovative New York City start-up working on a new camera. This start-up discovered that Rochester, NY, a five hour drive north to the edge of beautiful lake Ontario, and longtime headquarters of Kodak, had a treasure trove of resources–not old patents valuable as weapons in a wasteful patent war. It was the tens of thousands of talented engineers, machinists and optical experts who had been laid off by Kodak over the last decade.

We’ll have a fuller picture for you next week, but here is the basic message. The tech giants are sitting on huge piles of cash, much of which they would like to repatriate. That money can go toward scooping up patent portfolios and enriching lawyers, or it can go toward building out the next generation of mobile hardware and putting thousands of talented Americans back to work. Kodak may be worth the most right now, on paper, when it’s cut up into pieces for its patents. But to build a sustainable future, American companies should be focused on people, not patents.