A Triumph of Genius

Ronald K. Fierstein

4 ideas

1. Polaroid versus Kodak instant photography war

   After Kodak launched its own instant cameras and film in 1976, Polaroid sued for patent infringement. A federal court found in 1985 that Kodak had infringed seven Polaroid patents and enjoined it, forcing Kodak out of instant photography in January 1986 and leaving millions of owners with orphaned cameras. A 1990 damages ruling of roughly $909 million, settled in 1991 for about $925 million, ended a fifteen-year fight that remains the benchmark case for a founder defending an invention against a far larger incumbent.

2. Patents are the science company's only moat

   For a company whose advantage comes from years of basic research, the patent is what turns discovery into a defensible business. Without enforcement, a larger rival with more manufacturing and distribution can copy the result and capture the returns on research it never paid for. Land's position was that the company's brilliance was its only asset and its patents were the only thing protecting that brilliance, so defending them in court was a core business function, not a legal side matter.

3. Your supplier-partner is a future competitor

   Kodak manufactured film components for Polaroid and was briefed on its technology during that relationship, which gave it an inside view of the market it later entered. A partner who supplies you learns your economics, your technology and the size of your opportunity. So every cooperative arrangement with a capable incumbent should be judged partly as a transfer of competitive intelligence.

4. Injunctions matter more than damage awards

   Polaroid sought damages in the billions but received a fraction of that, because courts award only the lost profits a plaintiff can rigorously prove, or a reasonable royalty. The decisive remedy was the injunction that removed Kodak from the market entirely. In patent fights, the power to exclude a rival is worth more than the money recovered after the fact.

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