Polaroid Seeks $5.7 Billion in Damages in Kodak Suit

Polaroid Corp. said Friday that it has asked a federal court for $5.7 billion in damages from Eastman Kodak, which was found in 1985 to have infringed on Polaroid patents in the instant photography market.

The request marks the latest development in a 12-year-old case that forced Kodak out of its $200-million-a-year instant photography business.

In a statement, Kodak called the $5.7-billion damages claim “ludicrous and ridiculously inflated.”

“The claim (is) an exercise in fantastic and fanciful speculation wholly divorced from any facts that Polaroid could conceivably prove,” the Kodak statement said.

“To construct its claim, Polaroid has endowed itself with perfect foresight, perfect management and labor, perfect production equipment and supplies and a perfect non-competitive environment,” it added.

Kodak said Polaroid, in its calculation of damages, claimed that it lost $1.5 billion in profit between 1976 and 1986. Interest on that amount comes to about $1.6 billion for a total of $3.2 billion in damages.

Kodak sold roughly 16 million instant cameras in those 10 years.

Polaroid is also seeking additional damages of anywhere from $1 billion to $2.5 billion for profit lost due to what it said was its inability to “pursue the pricing, production and product introduction strategies it would have otherwise chosen.”

Legal battles over the damages award that Kodak must pay to Polaroid have been going on for the past two years, but most analysts have until now estimated that Kodak would have to pay anywhere from $300,000 to $1 billion.

Both sides have been filing documents in the damages case for the last eight months. A hearing is set for March 18, but a trial date has not yet been set.

U.S. District Court Judge Rya Zobel ruled in September, 1985, that Kodak, when it tried to enter the instant photography market, had infringed on a handful of about 150 Polaroid patents on instant cameras and instant film.

Early in the suit, which was filed in April, 1976, Zobel divided the case into separate trials on the infringement claims and potential damage awards.

At Kodak’s request, Zobel ordered Polaroid to release its damages request on Friday.

“The judge simply required, at Kodak’s request, that both sides make public information we have filed over the last several months with regard to the damages suit,” Polaroid spokesman Harry Johnson said.

“The two sides obviously have totally divergent perspectives on this,” he added.

Johnson declined to comment on the $5.7-billion damage request.