by: Shawn Shinneman | Staff Writer
Dallas Business Journal
David Pridham chased the Kodak (NYSE: KODK) patent portfolio so long he joked it was his white whale, but in the end, Pridham’s target was no Moby Dick.
Dominion Harbor announced it has acquired the massive Kodak patent portfolio, a move that could double the patent monetization company’s revenue this year, said Pridham, Dominion’s CEO and founder.
“This portfolio is revolutionary and it’s incredibly valuable,” he said. Pridham has had an interest in the portfolio since it first hit the market. From 2007 to 2010, he said, the portfolio was monetized to the tune of $1.8 billion. An outside firm put the value of the collection as high as $2.6 billion.
In 2012, however, during Kodak’s efforts to emerge from bankruptcy, they sold the portfolio to Intellectual Ventures for $525 million. Pridham said the portfolio has grown since that point. He declined to disclose the terms, citing the structure of the deal.
Here’s what he had to say about how Dominion Harbor came to own the portfolio and how the company plans to take it to market:
How’d you come to acquire this portfolio?
I found out about a year ago that Intellectual Ventures, the company that acquired the portfolio, had quietly put it back on the market. I reached out to some folks over there that I know and have been negotiating ever since.
I view it as a huge opportunity not only for Dominion but sort of for the whole market, because the patent monetization market has been on a down swing since about 2013 or so. What we’re trying to do is come up with new ways to bring intellectual property to companies that need to license them, need to acquire them, need to develop them. So this is sort of a one-stop-shop portfolio for patent commercialization.
How will you bring it to market?
We have about 5,000 patents sitting in the “bank” that we use to seat startup companies. Part of the Kodak strategy is to take some of those assets that Kodak developed – truly revolutionary – and put them in startups and small companies that are looking to enter the new markets and build their business toward an initial public offering.
Another concept we have is that there are a lot of existing businesses out there that need patents—in the different technology verticals that Kodak set up—to move into new markets, even though they’re large companies.
And then part of it is licensing, going to companies that have had licenses to Kodak in the past, paid hundreds of millions of dollars for those licenses. And extending those licenses out to cover the full portfolio for the balance of the life of the patent. So that’s sort of our three-headed strategy with respect to moving forward with Kodak.
Why is this portfolio so valuable?
We spent a lot of money trying to figure out exactly how you can use technology to measure the value of a patent. All the patent tools of the past, including ones we’ve developed, have always looked sort of intrinsically at what a patent says, what the words mean. And that’s important. But what we’ve done is we’ve taken that intrinsic analysis—and we think we do it better than anyone else—and we couple it with an extrinsic analysis.
Think of a patent as a piece of a large jigsaw puzzle. Every tool on the market would tell you what that piece means in and of itself. What our tool does is tell you where that piece fits in the overall jigsaw puzzle, and what the pieces that surround that piece mean. And that’s critical because you need to know context when you’re evaluating anything.
When you put the Kodak patent portfolio into our IPedia platform, it scores in the 97th percentile of active patent portfolios in existence today. That includes all the U.S. patents, the ones owned by Microsoft, IBM. The ones owned by Apple, by Google. To sort of see all that data, it leads us back to home base, and home base is: this portfolio is revolutionary and it’s incredibly valuable.
What does this do for revenue and growth?
I think it does a lot. Our revenue has been really good, we’ve grown every year since 2013. Without giving specific numbers, our revenue is in the low eight figures. I think this deal, for us, brings us well above that. We’re looking at doubling our revenue this year because of this portfolio and we’re looking at multiples of that going forward.