Kodak Seeks to Invalidate Rulings in Polaroid Case

Eastman Kodak Co. is seeking to nullify all federal court rulings since 1981 in Polaroid Corp.’s $5.7-billion patent-infringement suit, claiming the presiding judge has a conflict of interest because her husband’s late mother owned about $100,000 worth of Kodak stock.

In a motion filed in U.S. District Court on Wednesday, Kodak called for the immediate disqualification of Judge Rya Zobel and dismissal of all of Zobel’s rulings in the case since October, 1981, including her 1985 decision that Kodak violated several Polaroid patents on instant cameras and film.

Kodak also recommended that an award of less than $200 million “would be more than ample to compensate Polaroid” for any lost profits due to Kodak’s line of instant cameras and film, which ceased production under a court order on Jan. 9, 1986.

Cambridge, Mass.-based Polaroid, however, has deemed the Kodak motion meritless and noted that Zobel ruled on Oct. 5, 1981, that her mother-in-law’s ownership of the stock would not present a conflict.

Ruling Expected in July

“None of this is new to either side,” said Polaroid spokesman Samuel Yanes, who noted that Polaroid will likely file a countermotion.

Zobel’s husband, state Superior Court Judge Hiller Zobel, was named executor of the estate of his mother, Harriet Zobel, who died earlier this year and owned 2,250 Kodak shares. The Zobels are both named as beneficiaries of Harriet Zobel’s estate.

“Judge Zobel and her husband have, through the estate, a financial interest in a party that could be substantially affected by the outcome of the litigation,” said Kodak attorneys in the 28-page motion.

The motion noted that Harriet Zobel’s stock was worth as much as $150,000 in the past year. Kodak also claims Zobel could “substantially affect” the value of Polaroid or Kodak shares by her decisions.

Zobel will likely rule on the motion on July 6, the next scheduled pretrial conference in the case, said Nina Saab, a clerk for the judge. The trial for the damage award portion of the suit is scheduled to begin Jan. 9.

Case Started in 1976

In February, Polaroid filed a $5.7-billion damage claim in the case, first filed in April, 1976, after Rochester, N.Y.-based Kodak began production of the line. Kodak has called the claim “ludicrous and ridiculously inflated.”

Kodak reported $525 million in sales of instant cameras and film in 1981, according to the motion.

After a five-month trial in 1985, Zobel ruled that Kodak infringed on Polaroid’s patents and ordered Kodak to stop producing the instant cameras and film.

In the motion, Kodak said Zobel’s decision forced Kodak to fire or reassign about 800 workers and write off $494 million in losses.

The U.S. Supreme Court in October, 1986, refused to hear Kodak’s appeal of Zobel’s decision.

Kodak also argued in the motion that a sale of the shares would not be sufficient to eliminate the conflict.

“In the circumstances of this case, and given its high profile and potential significance to shareholders and employees of Kodak and Polaroid alike, there would inevitably be people who would question the impartiality of a judge who went to such lengths to remain on a case,” the motion said.