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Polaroid, Fuji Reach Patent Agreement

July 25, 1986

CAMBRIDGE, Mass. (AP) _ Polaroid Corp., whose lawsuit pushed Eastman Kodak Co. out of the instant photography market, won’t sue Fuji Film Co. to stop it from selling instant film, in return for some of the Japanese firm’s secrets.

The agreement announced Thursday followed a Japanese Patent Office ruling that Fuji infringed on Polaroid’s Japanese patent for integral instant film.

Polaroid has ″given up the potential of winning a few million dollars on a suit for a few million dollars worth of technology,″ said Charles Ryan, an analyst with Merrill Lynch & Co.

Under the agreement with Fuji Photo Film Co. Ltd., Polaroid pledged not to sue Fuji for patent infringement.

In return, Fuji agreed not to appeal the patent office decision; will give Cambridge-based Polaroid some Fuji technology; and sell Polaroid commercial products on favorable terms and conditions, Polaroid said.

Fuji sells Polaroid videotapes and certain photo transparencies for marketing in the United States. Analysts said the companies’ good business relationship may partly explain why Polaroid did not sue.

″It’s less emotionally charged and there are smaller stakes in any case,″ said William Reylea of Eberstadt Fleming Inc.

Fuji, which sells primarily in the Far East, was not in direct competition with Polaroid, which never used the specific patent in question to manufacture and sell instant film in Japan, analysts said.

The Fuji technology Polaroid is interested in acquiring includes electronic imaging and magnetic recording with videotapes and floppy disc systems, said Eugene Glazer of Dean Witter Reynolds Inc.

Polaroid had filed for the Japanese patent, similar to two U.S. patents, in May 1969 but had manufactured film under other patents, said Polaroid spokesman Harold Johnson.

The patent case against Fuji had never been filed in Japan, said Johnson, who declined to estimate the dollar value of the agreement.

Last April, a federal appeals court in Washington, D.C., upheld a lower court ruling that Kodak violated Polaroid instant photography patents. The ruling had forced Rochester, N.Y.-based Kodak from the instant photography business in January at an estimated $494 million cost.

Kodak has appealed that ruling to the U.S. Supreme Court, company spokesman Hank Kaska said Thursday. ″We believe the decisions in the Polaroid case raise fundamental issues of national importance that may well be of interest to the Supreme Court.″

Some of those issues, as outlined in Kodak’s brief to the court, include whether the decision hinders inventiveness and fosters monopolies by penalizing Kodak for taking risks to enter a new market.

Kodak officials, who reported that the withdrawal from the instant camera business is costing $494 million, have said the company will not resume making or selling instant cameras, regardless of the outcome of the appeal.

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