This part 2 of the Secret History of Polaroid and Edwin Land. Read part 1 for context.
Kodak and Polaroid, the two most famous camera companies of the 20th century, had a great partnership for 20+ years. Then in an inexplicable turnabout Kodak decided to destroy Polaroid’s business. To this day, every story of why Kodak went to war with Polaroid is wrong.
The real reason can be found in the highly classified world of overhead reconnaissance satellites.
Here’s the real story.
In April 1969 Kodak tore up a 20-year manufacturing partnership with Polaroid. In a surprise to everyone at Polaroid, Kodak declared war. They terminated their agreement to supply Polaroid with negative film for Polacolor – the only color film Polaroid had on the market. Kodak gave Polaroid two years’ notice but immediately raised the film price 10% in the U.S. and 50% internationally. And Kodak publicly announced they were going to make film for Polaroid’s cameras – a knife to the heart for Polaroid as film sales were what made Polaroid profitable. Shortly thereafter, Kodak announced they were also going to make instant cameras in direct competition with Polaroid cameras. In short, they were going after every part of Polaroid’s business.
What happened in April 1969 they caused Kodak to react this way?
And what was the result?
Read the sidebar for a Background on Film and Instant Photography
Today we take for granted that images can be seen and sent instantaneously on all our devices — phone, computers, tablets, etc. But that wasn’t always the case.
Film Photography
It wasn’t until the mid-19th century that it was possible to permanently capture an image. For the next 30 years photography was in the hands of an elite set of professionals. Each photo they took was captured on individual glass plates they coated with chemicals. To make a print, the photographers had to process the plates in more chemicals. Neither the cameras nor processing were within the realm of a consumer. But in 1888 Kodak changed that when they introduced a real disruptive innovation – a camera preloaded with a spool of strippable paper film with 100-exposures that consumers, rather than professional photographers, could use. When the roll was finished, the entire camera was sent back to the Kodak lab in Rochester, NY, where it was reloaded and returned to the customer while the first roll was being processed. But the real revolution happened in 1900 when Kodak introduced the Brownie camera with replaceable film spools. This made photography available to a mass market. You just sent the film to be developed, not the camera.
Up until 1936 consumer cameras captured images in black in white. That year Kodak introduced Kodachrome, the first color film for slides. In 1942, they introduced Kodacolor for prints.
While consumers now had easy-to-use cameras, the time between taking a picture and seeing the picture had a long delay. The film inside the camera needed to be developed and printed. After you clicked the shutter and took the picture, you sent the film to a drop-off point in a store. They sent your film to a large regional photo processing lab that developed the film (using a bath of chemicals), then printed the photos as physical pictures. You would get your pictures back in days or a week. (In the late 1970s, mini-photo processing labs dramatically shortened that process, offering 1-hour photo development.) Meanwhile…
Instant Photography
In 1937 Edwin Land co-founded Polaroid to make an optical filter called polarizers. They were used in photographic filters, glare-free sunglasses, and products that gave the illusion of 3-D. During WWII Polaroid made anti-glare goggles for soldiers and pilots, gun sights, viewfinders, cameras, and other optical devices with polarizing lenses.
In 1948 Polaroid pivoted. They launched what would become synonymous with an “Instant Camera.” In its first instant camera — the Model 95 – the film contained all the necessary chemicals to “instantly” develop a photo. The instant film was made of two parts – a negative sheet that lined up with a positive sheet with the chemicals in between squeezed through a set of rollers. The negative sheet was manufactured by Kodak. Instead of days or weeks, it now took less than 90 seconds to see your picture.
For the next 30 years Polaroid made evolutionary better Instant Cameras. In 1963 Polacolor Instant color film was introduced. In 1973 the Polaroid SX-70 Land Camera was introduced with a new type of instant film that no longer had to be peeled apart.
A Secret Grudge Match
To understand why Kodak tried to put Polaroid out of business you need to know some of most classified secrets of the Cold War.
Project GENETRIX and The U-2 – Balloon and Airplane Reconnaissance over the Soviet Union
During the Cold War with the Soviet Union the U.S. intelligence community was desperate for intelligence. In the early 1950s the U.S. sent unmanned reconnaissance balloons over the Soviet Union.
Next, from 1956-1960 the CIA flew the Lockheed U-2 spy plane over the Soviet Union on 24 missions, taking photos of its military installations. (The U-2 program was kicked off by a 1954 memo from Edwin Land (Polaroid CEO) to the director of the CIA.)
The U-2 cameras used Kodak film, processed in a secret Kodak lab codenamed Bridgehead. In May 1960 a U-2 was shot down inside Soviet territory and the U.S. stopped aircraft overflights of the Soviet Union. But luckily in 1956 the U.S. intelligence community had concluded that the future of gathering intelligence over the Soviet Union would be with spy satellites orbiting in space.
Air Force – SAMOS – 1st Generation Photo Reconnaissance Satellites
By the late 1950s the Department of Defense decided that the future of photo reconnaissance satellites would be via an Air Force program codenamed SAMOS.
The first SAMOS satellites would have a camera that would take pictures and develop them while orbiting earth using special Kodak Bimat film, then scan the negative and transmit the image to a ground station. After multiple rocket failures and realization that the resolution and number of images the satellite could downlink would be woefully inadequate for the type and number of targets (it would take 3 hours to downlink the photos from a single pass), the film read-out SAMOS satellites were canceled.
Sidebar– Kodak Goes to The Moon
CIA’s CORONA – 2nd Generation Photo Reconnaissance Satellites
It was the CIA’s CORONA film-based photo reconnaissance satellites that first succeeded in returning intelligence photos from space. Designed as a rapid cheap hack, it was intended as a stopgap until more capable systems entered service. Fairchild built the first few CORONA cameras, but ultimately Itek became the camera system supplier. CORONA sent the exposed film back to earth in reentry vehicles that were recovered in mid-air. The film was developed by Kodak at their secret Bridgehead lab and sent to intelligence analysts in the CIA’s National Photographic Interpretation Center (NPIC) who examined the film. (While orbiting 94 miles above the earth the cameras achieved 4 ½-foot resolution.) CORONA was kept in service from 1960 to 1972, completing 145 missions.
Film recovery via reentry vehicles would be the standard for the next 16 years.
Sidebar – The CIA versus the National Reconnaissance Office (NRO)
With the CIA’s success with CORONA, and the failure of the Air Force original SAMOS program, the Department of Defense felt the CIA was usurping its role in Reconnaissance. In 1961 it was agreed that all satellite Reconnaissance would be coordinated by a single National Reconnaissance Office (the NRO). For 31 years satellite and spy plane reconnaissance was organized as four separate covert programs:
Program A – Air Force satellite programs: SAMOS, GAMBIT…
Program B – CIA satellite programs: CORONA, GAMBIT, KEENAN…
Program C – Navy satellite programs: GRAB, POPPY …
Program D – CIA/Air Force reconnaissance Aircraft: U-2, A-12/SR-71, ST/POLLY, D-21…
While this setup was rational on paper, the CIA and NRO would have a decades -long political battle over who would specify, design, build and task reconnaissance satellites. The CIA’s outside expert on imaging reconnaissance satellites was… Edwin Land CEO of Polaroid.
The NRO’s existence wasn’t even acknowledged until 1992.
Air Force/NRO – GAMBIT – 3rd Generation Film Photo Reconnaissance Satellites
After the failure of the SAMOS on-orbit scanning system, the newly established National Reconnaissance Office (NRO) regrouped and adopted film recovery via reentry vehicles.
Prodded by the NRO and Air Force, Kodak put in an “unsolicited” proposal for a next-generation imaging satellite codenamed GAMBIT. Kodak cameras on GAMBIT had much better resolution than the Itek cameras on CORONA. In orbit 80 miles up, GAMBIT had high-resolution spotting capability – but in a narrow field of view. This complemented the CORONA broad area imaging. GAMBIT-1 (KH-7) produced images of 2-4 feet in resolution. It flew for 38 missions from July 1963 to June 1967. The follow-on program, GAMBIT-3 (KH-8), provided even sharper images with resolution measured in inches. GAMBiT-3 flew for 54 missions from July 1966 to August 1984. The resolution of GAMBITs photos wouldn’t be surpassed for decades.
CIA – HEXAGON – 4th Generation Film Photo Reconnaissance Satellites
Meanwhile the CIA decided it was going to build the next generation reconnaissance satellite after GAMBIT. Hexagon represented another technological leap forward. Unlike GAMBIT that had a narrow field of view, the CIA proposed a satellite that could photograph a 300-nautical-mile-wide by 16.8-nautical-mile-long area in a single frame. Unlike GAMBIT whose cameras were made by Kodak, HEXAGON’s cameras would be made by Perkin Elmer.
CIA Versus NRO – HEXAGON versus DORIAN
In 1969 the new Nixon administration was looking to cut spending and the intelligence budget was a big target. There were several new, very expensive programs being built: HEXAGON, the CIA’s school bus-sized film satellite; and a military space station: the NRO/Air Force Manned Orbiting Laboratory (MOL) with its DORIAN KH-10 film-based camera (made by Kodak). There was also a proposed high-resolution GAMBIT-follow-on satellite called FROG (Film Read Out GAMBIT) – again with a Kodak Bimat camera and a laser scanner.
In March 1969, President Nixon canceled the CIA’s HEXAGON satellite program in favor of the Manned Orbiting Laboratory (MOL), the Air Force space station with the Kodak DORIAN camera. It looked like Kodak had won and the CIA’s proposal lost.
However, the CIA fought back.
The next month, in April 1969, the Director of the CIA used the recommendation of CIA’s reconnaissance intelligence panel – headed by Edwin Land (Polaroid’s CEO) to get President Nixon to reverse his decision. Land’s panel argued that HEXAGON was essential to monitoring arms control treaties with the Soviet Union. Land said DORIAN would be useless because astronauts on the military space station could only photograph small amounts of territory, missing other things that could be a few miles away. In contrast, HEXAGON covered so much territory that there was simply no place for the Soviet Union to hide any forbidden bombers or missiles.
Land’s reconnaissance panel recommended: 1) canceling the manned part of the NRO/Air Force Manned Orbiting Laboratory (MOL) and 2) using the DORIAN optics in a robotic system (which was ultimately never built) and 3) urging the President to instead start “highest priority” development of a “simple, long-life imaging satellite, using an array of photosensitive elements to convert the image to electrical signals for immediate transmission.” (This would become the KH-11 KEENAN, ending the need for film-based cameras in space.)
The result was:
- Nixon canceled NRO/Air Force Manned Orbiting Laboratory (MOL) and its Kodak DORIAN film-based camera,
- Nixon told the CIA to build the HEXAGON satellite with its Perkin Elmer camera.
Over the next two years, Land lobbied against the GAMBIT follow-on called FROG and after a contentious fight effectively killed it in 1971. But most importantly Nixon gave the go-ahead to build the CIA’s KH-11 KEENAN electronic imaging satellite – dooming film-based satellites – and all of Kodak’s satellite business.
Why Did Kodak Go to War With Polaroid?
Finally we can now understand why Kodak was furious at Polaroid. The CEO of Polaroid killed Kodak’s satellite reconnaissance business.
Kodak’s 1970 annual report said, “Government sales dropped precipitously from $248 million in 1969 to $160 million in 1970, a decline of nearly 36 percent.” (That’s ¾’s of a billion dollars in today’s dollars.)
The DORIAN camera on the Manned Orbiting Laboratory and the very high-resolution GAMBIT FROG follow-on were all Kodak camera systems built in Kodak’s K-Program, a highly classified segment of the company. In April 1969 when MOL/DORIAN KH-10 was canceled, Kodak laid off 1,500 people from that division.
Kodak also had 1,400 people in a special facility that developed the film codenamed Bridgehead. With film gone from reconnaissance satellites, only small amounts were needed for U-2 flights. Another 1,000+ people ultimately would be let go.
Louis Eilers had been Kodak president since 1967 and in 1969 became CEO. He had been concerned about Land’s advocacy of the CIA’s programs that shut out Kodak of HEXAGON. But he went ballistic when he learned of the role Edwin Land played in killing the Manned Orbiting Lab (MOL) and the Kodak DORIAN KH-10 camera.
Kodak’s Revenge and Ultimate Loss
In 1963 when Polaroid launched its first color instant film — Polacolor – Kodak manufactured Polacolor’s film negative. By 1969 Polaroid was paying Kodak $50 million a year to manufacture that film. (~$400 million in today’s dollars.) Kodak tore up that manufacturing relationship in 1969 after the MOL/DORIAN cancelation.
Kodak then went further. In 1969 they started two projects: create their own instant cameras to compete with Polaroid and create instant film for Polaroid cameras – Polaroid made their profits on selling film.
In 1976 Kodak came out with two instant cameras — the EK-4 and EK-6 –and instant film that could be used in Polaroid cameras. Polaroid immediately sued, claiming Kodak had infringed on Polaroid patents. 
The lawsuit went on for 9 years. Finally, in 1985 a court ruled that Kodak infringed on Polaroid patents and Kodak was forced to pull their cameras off store shelves and stop making them. Six years later, in 1991, Polaroid was awarded $925 million in damages from Kodak.
Epilogue
1976 was a landmark year for both Kodak and Polaroid. It was the beginning of their 15-year patent battle, but it was also the beginning of the end of film photography from space. That December the first digital imaging satellite, KH-11 KEENAN, went into orbit.
After Land’s forced retirement in 1982, Polaroid never introduced a completely new product again. Everything was a refinement or repackaging of what it had figured out already. By the early ’90s, the alarms were clanging away; bankruptcy came in 2001.
Kodak could never leave its roots in film and missed being a leader in digital photography. It filed for bankruptcy protection in 2012, exited legacy businesses and sold off its patents before re-emerging as a sharply smaller company in 2013.
Today, descendants of the KH-11 KENNEN continue to operate in orbit.
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The first digital image was in 1982….guess Kodak’s strategy department missed what it could do to their retail business. Kodak reminds me of Motorola. Great engineering. Saw around corners. Ground breaking. But, strategically missed everything. Why? I think that is a good lesson to figure out.
I worked for Kodak, but never knew the other side of the story. Very interesting and informative. Thanks for sharing.
Your content rocks. Thanks for sharing your insights online.
The idea that something was missing to the Kodak/Polaroid lawsuit hit me when I read the book “A TRIUMPH OF GENIUS – Edwin Land, Polaroid and the Kodak Patent War.” The author made numerous references about the antipathy Kodak personally had for Edwin Land. It occurred to me that there was an entire body of hidden history behind the Kodak/Polaroid relationship. Most of the NRO papers on the history are now unclassified and I link to many of them in this post.
One thing that struck me in reading the book was that during the patent infringement trial Kodak lawyers asked Land about what he knew about the Kodak Bimat process (the integral part of the secret SAMOS camera and the FROG camera system.) That meant that someone from their black programs was feeding Kodak’s lawyers that info.
Land lied on the stand when he said he was only vaguely aware of it. Kodak never pursued that angle further in public.
Steve
I appreciate your reference to my book, A Triumph of Genius. While I find your theory interesting, I am not convinced that Dr. Land’s action with respect to the reconnaissance program was the primary cause of the rift that developed between him and Kodak.
As I outline in my book, after years of a very fruitful mentor/protégé relationship, things went south gradually because of Kodak’s desire to participate in the instant photography business directly, and not just as a supplier to Polaroid. This was an objective they pursued from the start but were thwarted time and again during each negotiation for a new production agreement. There even came a time in 1963 when, at a meeting in Rochester, Land seemed to actually offer Kodak a license under Polaroid’s patent portfolio. But after the meeting cooler heads at Polaroid intervened and essentially retracted the offer. This angered Kodak greatly. That same year, after five years of Herculean effort, when Kodak helped bring Polacolor to the market, Land’s ego would not allow him to share credit with the many scientists in Rochester who had shepherded Polaroid’s color film from the laboratory to commercial fruition. This PR blunder only further heightened tensions between the two companies, and particularly between Land and his colleagues at Kodak.
The final straw came in late 1968. Kodak had assumed that they’d eventually be able to get into the instant business (then only peel-apart technology) by the late 60s when Polaroid’s key patents would expire. However, this assumption was blown away in November 1968 when Land showed Kodak his prototype for SX-70, the first integral film unit that would process with no intervention upon ejection from the camera. The emergence of this technology meant that Kodak was, after all, going to need a patent license to enter the instant photography field. In essence, Land had moved the goal posts on them. When Kodak demanded the license in return for agreeing to help bring the new integral film to market, and Polaroid refused, Kodak determined to sever the relationship and go it alone. This decision was based largely on its own internal marketing analysis that suggested Kodak could suffer a monumental loss of business from the introduction of SX-70 – its report cited the loss as 817 million film units representing 6 billion dollars in film sales (in 1969 dollars, over 11 billion in today’s dollars). In essence it was the first time that Polaroid’s technology had become a threat to Kodak’s absolute dominance of the amateur photography market.
This is when Kodak terminated the agreement for producing peel-apart film, and raised its prices, etc. The reconnaissance business was small potatoes compared to the perceived potential of instant photography at the time. As you pointed out, its loss only cost Kodak several hundred million dollars in business. One must also remember that all of these events took place long before the advent of fast conventional processing or digital photography, the two technological and business developments that later doomed instant photography. In 1968-69, there was legitimate fear at Kodak that Polaroid was about to morph from a good customer with a niche market into a genuine competitor.
Of course, it’s intriguing that this face-off over instant photography was occurring at the same time as Land was rendering judgment affecting Kodak’s participation in the satellite reconnaissance industry, but I believe this is just coincidental. Kodak’s annoyance at Land over these decisions may have contributed cumulatively to the deterioration of the relationship, but it must be considered in the context of what was occurring in the amateur photographic industry.
In retrospect, it seems to me that the real impact of these events was manifested instead in Kodak’s attitude towards and treatment of Dr. Land throughout the litigation. It always seemed like there was a mysterious personal, as opposed to a purely legal and/or business, aspect to the proceedings. For example, as I described in the book, Kodak attorneys disrespectfully tweaked Land about his honorary academic degrees, and lack of an actual one, during his pre-trial deposition. And, in the litigation they focused on the Bimat technology you referenced even though it was of little substantive value to Kodak’s case. Perhaps it was an effort to have Land violate confidentially obligations, or at least to make him uncomfortable. Clearly, there was some personal animus at work, but at the time, we clearly did not understand fully the reasons therefor.
Be that as it may, it still seems to me that the true impetus for Kodak’s decision to pursue its own instant photography system to compete with Polaroid, or as you put it, “to go to war with Polaroid,” was more likely a business decision based on the sales analysis Kodak conducted than a personal vendetta. Either way, in the end, it was a disastrous decision for Kodak.
Finally, I’m not sure what you suggest when you say the Land “lied on the stand.” Seems to me that may be a bit strong. Knowing him as well as I did, I’m confident that whatever testimony you have in mind is more nuanced than untrue.
Ron Fierstein
Ron,
Thanks for the thoughtful comment. As I noted the impetus for blog post was reading your book. (A must read for anyone.)
I think what we have here is the Rashomon effect when the same event is described in significantly different (often contradictory) ways by different people who were involved.
What I want to politely suggest is that much of the CIA and NRO documentation of the systems, arguments, battles, and role of Land and his conflicts with Kodak in the reconnaissance satellite business are only now becoming available. (Even now the actual Land Panel assessments are still classified.) These weren’t accessible when you were involved with the case. Kodak never directly raised them in the trial.
The reality was that Land wore two hats. At Polaroid he was the epitome of the research scientist/CEO, but in the national security space he was one of the experts that non-technical policy people depended on. A Clark Kent identity at Polaroid and Superman inside the CIA and Pentagon.
Nothing I suggest dismisses or diminishes what you knew about the commercial side of Kodak’s thinking or your comments above. What I am suggesting is that the Kodak reconnaissance business while relatively small in revenue took up a large amount of Kodak management mind share.
I can’t overemphasize how important these satellites were to everyone from the President on down – even till today. The images they collected were the way the U.S. was able to understand what strategic weapons the Soviet Union had, and in this time period, negotiate arms control treaties with the Soviet Union in confidence (these satellite assets were obliquely labeled “national means of technical verification.” )
The Kodak effort was so important that the fall of 1967 Secretary of Defense McNamara made a secret visit to the K-group/ Dorian/ Bridgehead sites in Rochester. Believe it or not it during the Cold War it was the reconnaissance part of their business Kodak was most proud of.
Let me suggest that while you and litigation team had contemporaneous correspondence and the internal memos of both companies surrounding the events- the fact that you never saw any internal Kodak or Polaroid correspondence about these reconnaissance systems perhaps should make you consider that you saw only one half of the correspondence. The other half was code-word classified.
I wonder, if this half of the story was known and access to some of the classified memos (I link to many of them in the blog post) was available, whether the perception of the impetus (the last straw/breaking point for the relationship) for the lawsuit would have changed?
On the minor issue of when I said “Land lied on the stand…”
When Land was asked if knew about the details of the Kodak BIMAT process, he said “…only enough to realize that it was very close to our own sepia process. I took care not to learn more. And. I did not learn more.”
Well maybe. But hard to believe. By the time of trial Kodak had been proposing a BIMAT camera for 20+ years (since SAMOS in mid 1950’s) as a solution to real-time reconnaissance. Land had succeeded in convincing the president to cancel the latest BIMAT proposal as part of their FROG (Film Read Out Gambit) proposal which was a Kodak BIMAT camera with a laser scanner and a high bandwidth downlink. It’s hard to imagine that as the country’s expert on overhead imaging systems that after two decades he wasn’t intimately familiar with it. It was his job. But agreed, without cross examination knowing these facts – it’s speculation.
All this makes me conclude if there is anyone interested in making a movie of one of the most interesting people of the 20th century the story of Edwin Land has it all. Inventor, scientist, cultural icon, major player in spy technology, keeper of the country’s most important secrets, advisor to four presidents, pivotal testimony in the most important patent trial ever, CEO of a company that Steve Jobs admired and emulated. And ultimately rejected by the company he started.
Again, none of this commentary was possible without your book.
Wow..
Unfortunately, during this fighting, both these companies and the USA as a whole lost imaging edge to Japan, making these two companies history by giving birth to ‘Kodak Moment’. https://www.the-waves.org/2022/02/27/kodak-moment-collapse-from-disruptive-innovation/