NEW YORK ( TheStreet) -- InterDigital (IDCC - Get Report) cancelled the sale of its patent portfolio throws into question Eastman Kodak's (EK) bankruptcy filing, including Kodak' ability to sell patents, litigate infringement claims and draw in the funds to continue its 131-year history.
Both companies contain portfolios of patents that are encumbered by years of licensing agreements, which may make them harder to value and sell, according a patent expert. Kodak and InterDigital's common failure to sell patent portfolios may also mark a turning point in the patent M&A wars being waged in Silicon Valley, which yielded multiple billion dollar plus deals in 2011.
"It's very difficult to sell patents which have so many encumbrances," says Alexander Poltorak, CEO of General Patent about Kodak's patents in a January interview prior to the firms bankruptcy. Poltorak compared Kodak's patent portfolio to those at InterDigital and Tessera Technologies (TSRA) in its size and previous monetization through licenses.
Heavily licensed patents are difficult to value because buyers would need to see how far partnerships travel and if infringement claims are already protected by previous settlements, said Poltorak. In contrast,
(MMI) portfolio -- which was a key in its $12.5 billion sale to Google -- were much less burdened. "