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Court Upholds Patent Violations Against Kodak

April 26, 1986

ROCHESTER, N.Y. (AP) _ A federal appeals court in Washington has upheld a ruling that Eastman Kodak Co. violated several Polaroid Corp. patents for instant photography, company officials said Friday.

The original ruling, issued by a federal judge in Boston, forced Kodak from the instant photography business in January at a cost estimated at $494 million.

That $494 million charge resulted in Kodak posting its first quarterly loss on record for the final quarter of last year.

Friday’s ruling was handed down in the Court of Appeals for the Federal Circuit.

Kodak officials said they were disappointed by the decision, and were studying what steps to take in the case, said company spokesman Charles Smith.

Some of Kodak’s options include appealing the decision, trying to settle the 10-year-old lawsuit, or allowing it to move to its next phase, which is the setting of damages in U.S. District Court in Boston.

″We are looking into all the avenues,″ Smith said.

He said Kodak still maintains it did not knowingly violate the seven Polaroid patents and that its entry into the instant market in 1976 was in complete compliance with patent law.

Polaroid spokesman Allan Verch said the Cambridge, Mass.-based company was ″obviously gratified″ by the ruling.

Polaroid sued Kodak shortly after it entered the instant market, claiming stolen Polaroid trade secrets were used in Kodak products.

Kodak has offered its estimated 16.5 million instant camera owners a refund of one share of Kodak stock, a new disc camera and film, or a coupon book worth $50.

But that program has been put on hold by a lawsuit in Chicago that claims Kodak is not offering a fair refund offer.

In its 1985 annual report, Kodak said the withdrawal from the instant photographic consumer market would not threaten the company financially or technologically.

It also said it does not expect any damages that may be awarded to Polaroid to have ″a material adverse effect″ on the company.

Polaroid, which now has a monopoly in the U.S. instant photography market, recently introduced a new instant camera it claims takes pictures that are the same quality as a 35mm camera.

The new camera is an effort to boost slumping sales in the instant photography market, which has been flat for several years, according to industry analysts.

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