Shutterfly Inc. (SFLY), the online photo- sharing service, sued bankrupt Eastman Kodak Co. (EKDKQ), accusing it of violating a noncompetition agreement included in the sale of its Kodak Gallery business.
A Kodak service called My Kodak Moments, which allows users to create photo books and order prints from their smartphones, is “explicitly prohibited” under the agreement, Shutterfly said in a complaint filed today in U.S. Bankruptcy Court in Manhattan.
Shutterfly, based in Redwood City, California, last year agreed to buy Kodak Gallery, another online photo-sharing business, for $23.8 million. Kodak Gallery competed with Shutterfly, and a “significant driver” of the purchase price was the noncompete agreement, Shutterfly said in its court filing.
Stefanie Goodsell, a spokeswoman for Rochester, New York- based Kodak, declined to comment on the lawsuit.
Kodak, which filed for bankruptcy in January 2012, said in court papers last year that Kodak Gallery required a “significant investment” to become competitive and that it was selling the business because it was “no longer an important component” to its strategy.
The case is Shutterfly Inc. (SFLY:US) v. Kodak Imaging Network Inc., 13-ap-01310, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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