Patents Provide Competitive Advantage for Kodak

Companies such as Kodak are awarded patent rights to protect their exclusive use of technology in order to compete with their rivals; thus achieving a competitive advantage. A patent right can secure an exclusive rights of an inventor to an invention for more than twenty years; hence achieving a competitive advantage. This can eventually enable the company to acquire a temporary monopoly for its products; hence allowing it to reap high profits in the competitive market. However, in case the patent expires, other companies are free to duplicate the invention. Although patenting an invention is not a guarantee that the company can achieve success, it can be profitable in case the company succeeds in business activities. Eastman Kodak has made significant efforts of surviving in the competitive global market; thus it relies on patents, as its source of income in the digital economy. Since the year 2004, Eastman Kodak has not been profitable apart from this year; hence the company has tried to find their way into the digital economy. Thus, the company has sued many companies such as Samsung, LG Electronics and it is currently battling with Apple Company for licensing fees as a way of raising cash.

Kodak has to sue companies that infringe on its patents because they want to receive settlement money. Kodak Company has the right to defend their patents rights in order to maximize profits in the global market. However, the violation of the patent right by another company may lead to the violation of the law. For instance, Kodak Company sued Samsung Company because the camera phone technology for Samsung Company violated the two Kodak patents; thus they received $550 million from Samsung. Kodak also sued LG Company for violating their patent right; thus received the settlement money of $ 400 million from LG Company. However, Kodak is currently blocked by Apple Company because each of these companies has a battle for accusing each other of patent infringement. Additionally, the company has made negotiations over the licensing deals for its patents. However, Kodak has significantly increased adequate profits from its patent rights, which can enable them to survive as the company re-structures.

In case, most of Kodak’s patents expires, the company can stretch out its safety net long enough to create profits in other business sectors. This can be through implementing a new business strategy on the way they can increase their profits. For instance, the company can outsource some of its manufacturing parts and invest heavily on digital technologies. The new strategy can enable them to capitalize on their technology innovation in order to boost their business above the profit margins. Kodak has made significant efforts of negotiating for licensing deals in order to maximize profits; hence achieving a competitive advantage. However, the company can still outsource some its manufacturing components because outsourcing is also significant. This is because it enables the company to enjoy the economies of scale and lower production cost; thereby enabling the company to gain competitive advantage in the global market.