Kodak's Future Patently Clear?

If one were to compile a list of brands on the extinction watch list, it would likely include Kodak. The once-reigning giant of photography who, remarkably, invented the digital camera in 1975, has been mired in its own past. To many, Kodak represents anything but current digital film technology, despite the fact that the company owns many patents in digital imaging.

And patents, it seems, are Kodak's "key to the future," says The Wall Street Journal. In fact, "aggressive litigation has become an increasingly important part of Kodak's corporate strategy." In the past year alone, the company received close to $1 billion from two patent-suit settlements, one with Samsung and one with LG Electronics. Currently, Kodak is involved in a suit with Apple, and earlier this year, it sued the maker of BlackBerry, Research In Motion.

What may be keeping Kodak alive is the fact that the company started to license its intellectual property about ten years ago. It currently has some thirty licensing agreements in place. Since 2004, Kodak has sued or settled with a dozen or so other companies over intellectual property. As a business model, filing patent suits can only take a company so far.

That's why Kodak isn't giving up in its other business areas. It makes digital cameras, digital picture frames and ink-jet printers, both for consumer and commercial use. Kodak's financial picture is not robust -- the company has had only one full year of profit since 2004. On the bright side, however, Kodak did record a profit for the fourth quarter of 2009.

But Kodak, once known for uncompromising quality, has apparently fallen from grace in that area, too. A recent product review by Hiawatha Bray of the Boston Globe is typical. "Last year," says Bray, "Kodak blindsided the pocket video market with the sensational Zi8..." But its newest camera, the Playsport, "shoots videos that just don't look right."

Bray adds, "The Playsport's quality problem could not come at a worse time. Archrival Flip, whose cheap cameras spawned the pocket video craze, was acquired last year by Cisco Systems, the huge data networking company that is making a push into consumer electronics. Armed with Cisco's billions, Flip is heading upscale."

Well, if Kodak finds its video cameras can't compete with Flip... maybe it could sue Cisco.