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After nearly five years of litigation, camera and film manufacturer Fuji Photo Film Co. has won a $25 million verdict in its bid to recover damages for patent infringement committed by a recycler of its single-use disposable cameras. The award was returned by a federal jury against Jazz Photo Corp., a Carteret, N.J.-based company that, since 1995, has sold approximately 38 million of the refurbished disposable cameras. In its suit, Fuji alleged that Jazz had infringed its patents on components of the disposable cameras through its practice of recovering the used casings, loading them with new film and packaging them for resale. According to Fuji attorney Matthew W. Siegal of New York’s Stroock & Stroock & Lavan, Jazz bought the used casings from middlemen who had acquired them from film processors. The casings were then shipped to China, where they were reconfigured and reloaded. Fuji also buys the spent casings and then melts them down to be remolded. Fuji filed the suit in 1998 after a trial in front of the International Trade Commission and subsequent injunctions failed to prevent Jazz from selling the cameras. Fuji named Jazz and founder Jack C. Benun in the suit. Siegal, who tried the case with partner Lawrence Rosenthal, associate Lisa Rudden and Robert J. Rohrberger of Livingston, N.J.’s Fox & Fox, said Jazz used a defense theory of repair construction, claiming that it was simply repairing cameras whose patent rights had been exhausted after their sale. Fuji countered that refurbishing the cameras amounted to a reconfiguration of patented elements into a new product, and was thus infringement. The jury returned its verdict on Dec. 2, awarding Fuji $3.5 million in lost profits and about $21.5 million in royalties, or 56 cents for each of the estimated 38.4 million disposable cameras sold by Jazz. Despite the verdict, Jazz is still selling the refurbished cameras, primarily through Wal-Mart, Siegal said. While he anticipates an appeal by Jazz, he said he hopes that the verdict, combined with existing injunctions, will force Jazz out of the refurbished-camera business. Siegal also noted that Judge Faith S. Hochberg of the U.S. District Court for the District of New Jersey must still rule on prejudgment interest and enhanced damages for willful infringement. Jazz’s trial attorney, John K. Crossman of New York’s Dreier & Bartiz, was unavailable for comment.

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