IN THE COURTS : Polaroid Wants $12 Billion in Kodak Suit

Resuming a historic federal court battle stemming from the lucrative rights to instant photography, Polaroid Corp. told a judge Monday that it lost nearly $4 billion in potential profits because of patent infringements by Eastman Kodak Co.

In the opening day of the trial, Polaroid, which pioneered instant photography, argued in U.S. District Court that it deserves triple damages of nearly $12 billion on the grounds that Kodak acted intentionally.

The trial is the final phase of a 13-year battle over Kodak’s entry into instant photography. The outcome could profoundly affect both companies.

Polaroid, based in Cambridge, Mass., drove Kodak from the instant picture business in 1985 with a victory in the first phase of the patent infringement suit. This new trial will determine what monetary damages Kodak owes Polaroid for violating seven patents.

Although Polaroid conceded the complexity of ascertaining actual damages, its position suggests a settlement of about $12 billion, a staggering figure that not only would be the biggest court settlement in history but also would exceed the net worth of its rival, which is based in Rochester, N.Y.

Kodak has insisted that it owes no more than $200 million, including interest.

Wall Street analysts predicted that the final settlement would likely range from $1 billion to $2 billion. And the award could have a substantial impact on Polaroid stockholders, with whom the company has promised to share the cash award in staggered payments, depending on the amount.

In its trial brief, Polaroid argues two important points:

- Its losses should be based on profits it would have made without Kodak’s patent infringing entry into the instant photography business in 1976, “just as Polaroid was poised to reap the benefits of its investment of hundreds of millions of dollars in innovative technological research and its 30-year effort to build a worldwide instant photography market.

- Kodak intentionally disregarded Polaroid’s patent protection.

Polaroid lawyer Herbert F. Schwartz told the court he would prove that Kodak introduced its instant cameras and film knowingly in violation of Polaroid’s patents.

“Kodak felt it had to get into the business and would lose billions of dollars if it did not,” Schwartz told the court. Kodak, he said, “adopted a strategy to block any barrier in its way.”

In a trial brief already submitted to U.S. District Judge A. David Mazzone, Kodak denied intending to violate the patents.