In 18 years of research at Case Western Reserve University, Professor Joseph Fagan developed a way to test infants for retardation within the first year of life, instead of two or three years. Now he has started InfanTest Corp., of Cleveland, which has received a $50,000 federal grant to produce an easily administered commercial version. The test would be given to the many infants "at risk" for retardation because of prematurity or other conditions. It determines whether babies can distinguish between a new image and one they've just seen; almost all normal infants look at the new picture. The test lets doctors focus on the infants who really need their help.