Eastman Kodak Co. said Sunday that it will license thousands of patents to Imax in a deal that will supply the troubled photography company with millions of dollars.
A person familiar with the agreement, but not authorized to speak with the media, said the initial deal is worth tens of millions of dollars. The agreement includes additional payments if certain milestones are met, along with patent royalties, the person said.
Rochester, N.Y.-based Kodak has struggled in recent years as consumers shifted to digital cameras and away from traditional film. Investor fears about its finances sent its shares tumbling earlier this month, after the company hired Jones Day, one of the country's top bankruptcy and restructuring law firms, as an advisor.
The 131-year-old company, which is credited with turning picture-taking into a hobby for the masses, insisted then that it had no intention of filing for bankruptcy protection.
Under the agreement announced Sunday, Imax Co. will have exclusive use of Kodak's laser projection technology. The Kodak patents will allow Imax to provide high-quality digital content for theater screens larger than 80 feet and domed theaters for the first time. Screens that large had previously been limited to film content, the companies said.
IMAX said it expects to introduce the new laser-projection technology by the second half of 2013.
The agreement covers about 100 patents related to laser protection technology, along with certain digital cinema rights to about 10,000 of Kodak's 11,000 total patents, said the person familiar with the deal,
The company has used its patents as a way to raise cash before. Since 2008, it's raised nearly $2 billion in licensing fees, and is hoping to sell another 1,100 digital-imaging patents. Some analysts have said that portfolio of patents could fetch $3 billion for Kodak.
After four years of losses, Kodak has said that it expects to return to profitability next year on the strength of deep investments in digital inkjet printers.