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Kodak Seeks Reversal of Patent Ruling : Firm Can't Compete Against Polaroid in Instant Photo Market

January 07, 1986|Associated Press

WASHINGTON — Eastman Kodak asked a federal appeals court Monday to reverse a lower court ruling that bars it from competing with Polaroid in the instant photography market after Thursday.

At stake is billions of dollars in revenue to either firm in future years.

Kodak appealed an injunction handed down last October by U.S. District Judge Rya Zobel in Boston. A month earlier, following a five-month trial in a suit filed in April, 1976, she ruled that Kodak had infringed on several of Polaroid's patents.

The injunction, issued Oct. 11, would force Kodak to pull its instant photo products off the market by Jan. 9.

Delay of Injunction Sought

Kodak, based in Rochester, N.Y., asked the appellate court to reverse the lower court's ruling and, more immediately, to postpone the injunction. If the court later rules against Kodak, Polaroid would be free to ask for a separate trial for damages.

Chief Judge Howard T. Markey indicated that the three-judge appeals panel would attempt to reach a decision on whether to stay the injunction before its Thursday effective date, but he offered no clue as to when it would rule on the merits of the case.

Kodak's attorney, Francis T. Carr, told the federal appeals panel that Kodak's entry into the market in 1976 was "done carefully and well," even though Polaroid was "heavily fortified by layers of patents."

He noted that the case revolved around just a handful of the 150 patents held by Polaroid.

"What Kodak did is what the U.S. Patent Office encouraged . . . innovation around existing patents," Carr said.

The district court, he said, "has damned Kodak for what U.S. patent laws permit."

But Herbert F. Schwartz, Polaroid's attorney, said Polaroid's introduction in 1972 of the SX-70 instant photo camera, which produces a color print without requiring the user to strip "garbage" or apply chemicals, so startled Kodak that "they copied the entire film transport and developing system."

"They saw the SX-70 and they copied it," said Schwartz. "It was not a situation where Kodak was trying to do its own independent work."

Carr showed the appellate judges the Polaroid model next to the different-looking Kodak competitor, the EK-6, and declared, "If Kodak is a clone of the SX-70, I hope Kodak never gets into bio-technology."

Polaroid, based in Cambridge, Mass., says the instant photo business accounts for 90% of its sales, which totaled $1.3 billion in 1984. Analysts estimate that the instant market now comprises about 3% of Kodak's sales, which were $10.7 billion last year.

While the amateur demand for instant film and cameras has diminished in recent years, the market has grown in specialized areas, such as photo identification. Moreover, Kodak has made instant film technology a part of a new generation of products that involve "electronic imaging"--meaning prints of pictures from television and computer screens.

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