Kodak Loses Appeal, Will Drop Instant Photo Sales

Eastman Kodak Co. lost a bid to block a court order that will force the photographic giant to get out of the instant photography business beginning Thursday, the company announced today.

Kodak is making plans to stop all production and marketing of instant film and cameras, spokesman Hank Kaska said.

He said the U.S. Circuit Court in Washington denied Kodak’s request to allow the company to remain in the instant photography business while it appealed a decision in its nine-year patent battle with Polaroid Corp.

“Our next steps are uncertain, but as of tomorrow, we will be stopping all production, distribution and marketing of instant products,” Kaska said. He said the decision was handed down Tuesday evening.

In October, federal Judge Rya Zobel ruled that Kodak had infringed on seven U.S. patents owned by Polaroid, based in Cambridge, Mass. She then issued an order barring Kodak from making or selling the instant products effective Thursday.

Kodak has said in court papers that the decision will cost hundreds of jobs, idle $200 million worth of equipment and “severely and irreparably” damage its reputation as a reliable source of cameras and film.

Stock analysts were not surprised by the decision, and they generally agreed that it won’t have a devastating impact on Kodak.

“This is not something that will modify the corporation. Obviously, it’s not very pleasant,” said Brian Fernandez, an analyst with Nomura Securities in New York.

“The instant photography business is only marginally profitable for Kodak,” said Eugene Glazer, an analyst with Dean Witter Reynolds in New York. “I think the damages will be the big thing.”