IMAX licenses Kodak's laser projection technology, as Kodak tries to avoid bankruptcy
IMAX and Eastman Kodak have announced a relationship that allows IMAX to license more than 50 patent families from Kodak that will broaden the application of digital projection technologies in motion picture theaters. It also bolsters Kodak's revenue as the 131-year-old company tries to avoid filing for bankruptcy.
"Bloomberg News" quoted sources that said Kodak would receive an upfront payment of more than $10 million, a milestone payment and ongoing royalties. Neither company would confirm those figures.
The patents cover fundamental laser projection technology. IMAX also licensed certain exclusive rights in the digital cinema field to a broader range of Kodak patents covering complementary technologies useful for laser projection products.
The decade-long deal helps Kodak narrow a cash shortfall and advances a goal of generating $250 million to $350 million in revenue this year from licensing intellectual property. The company said on Sept. 30 that it has "no intention" of filing for bankruptcy.
"This is the ordinary course of business and I think, if anything, it demonstrates that they have intellectual property other than the image capture and printing side," Mark Kaufman, an analyst at Rafferty Capital Markets in New York, told Bloomberg.
IMAX's licensing of Kodak's laser projection technology and patents will enable it, for the first time ever, to deliver the highest-quality digital content available to IMAX film-based screens larger than 80ft and to dome theaters. This technology also will allow IMAX to distribute content with greater efficiency to the company's global theater network.
"This Kodak intellectual property is truly cutting edge, and will be used by IMAX's Technology Group to enhance the cinematic experience for consumers, enable the application of digital technology in our larger and institutional theaters and make being in business with IMAX even easier and more profitable," said IMAX CEO Richard L. Gelfond.
IMAX expects to introduce the new laser-projection technology by the second half of 2013. It will provide the company's largest screen and dome customers — which have previously only had access to analog film — with a full array of digital content, which often includes Hollywood's biggest IMAX DMR titles.
The Kodak announcement follows IMAX's September 2010 equity investment in Laser Light Engines (LLE), an initiative centered around developing technology to illuminate existing digital screens to IMAX standards. The Kodak technology is expected to extend these efforts and allow the illumination of IMAX 80ft to 100ft screens and domes with a brightness and clarity not currently attainable in these formats. The system will also consume less power, last longer and have a wider color gamut when compared with existing technology.
Kodak put a separate set of digital imaging patents valued at an estimated $3 billion up for sale in July. The company is facing pressure from its bondholders to use cash from asset sales to pay down debt. Some bondholders have met with bankruptcy lawyers and restructuring advisers to help ensure they are paid, "Bloomberg" reported.