Kodak to Appeal Ban on Its Instant Cameras, Film

Eastman Kodak said Monday that it will keep selling instant cameras and film while it appeals an injunction obtained by Polaroid Corp. that bars Kodak from the instant photo market starting Jan. 9.

A federal district judge in Boston handed down the injunction Friday after ruling previously that Kodak had infringed on seven patents on instant cameras and film held by Polaroid.

“Right now, we have no plans to alter our manufacturing activities or our marketing plans,” Kodak spokesman Charles Smith said. “We’re working hard to get that message out into the marketplace.”

Kodak lawyers will immediately ask the Court of Appeals for the federal circuit in Washington, which handles patent disputes, to stay the injunction. It will file a notice of appeal of the ruling before the injunction’s Jan. 9 effective date, Smith said.

In trading on the New York Stock Exchange, Kodak closed down 12.5 cents at $44.625 a share. Polaroid closed up $1 at $36.25 a share Monday, the first day of trading since the injunction.

Polaroid filed suit in 1976 after Kodak introduced an instant photography system, ending Polaroid’s 30-year monopoly in the field. Polaroid said that Kodak infringed on its patents, while Kodak argued that its system was the product of its own research.

Instant film and cameras are far more important to Polaroid than to Kodak. Polaroid says the business makes up 90% of its sales, which totaled $1.3 billion in 1984. Analysts estimate that the instant market represents about 3% of Kodak’s sales, which were $10.7 billion last year.

Polaroid, headquartered in Cambridge, Mass., has about 70% to 75% of the U.S. instant market, with Rochester-based Kodak holding the remainder, securities analyst Michael Ellmann of Wertheim & Co. said Monday.

The amateur market for instant film has shrunk in recent years, although there has been growth in specialized markets, such as photo identification.

Worldwide, industry sales of instant film and cameras are about $1 billion to $1.5 billion a year, Ellmann estimated.

Ellmann said Kodak probably is fighting the injunction because of hopes for future profits and because, if it does not, a judge could assess damages at a coming trial running into the tens or hundreds of millions of dollars.

“Those sums are worth fighting about even for a company as big as Kodak,” Ellmann said.

Kodak has made instant-film technology a part of a new generation of products, including one that makes instant prints of pictures on television screens and computer monitors. It is unclear whether a judge would consider those products to infringe on Polaroid patents.

Smith said the importance of the instant market to Kodak was demonstrated earlier this year when it created a business unit devoted solely to it as part of a corporate reorganization.

Fuji Photo Film Co. of Japan sells an instant-camera system outside the United States under license from Kodak. Sam Yanes, a Polaroid spokesman, said Polaroid has put off any action against Fuji while waiting to see if the Polaroid patents are held to be valid in Japan.