Shutterfly has filed suit against Kodak because the bankrupt company has released a web service which violates an agreement between the two parties.
Kodak has filed for Chapter 11 bankruptcy at the beginning of 2012. The company is currently in the process of reorganizing itself, despite the fact that it recorded a $1.38 billion loss during the last financial year.
Kodak is expected to shed its bankrupt status in 2013
Even so, the company’s CEO, Antonio Perez, revealed that the company will emerge out of bankruptcy as early as mid-2013 or by the end of this year. However, things may not go according to plan, considering the fact that Shutterfly has filed a lawsuit against the Rochester-based entity.
Shutterfly sues Kodak in New York
The complaint has been filed at the US Bankruptcy Court, in the Southern District of New York. It claims that Kodak has violated an agreement by launching the so-called My Kodak Moments application.
This app allows users to create photo books using their Facebook pictures. Additionally, the albums can be created from their friends’ photos.
Kodak has provided such a service until 2012. It was called Kodak Gallery. The app allowed consumers to buy custom photo albums from Facebook images. However, the company sold this service to Shutterfly for an amount of $23.8 million.
My Kodak Moments is the same service as the one sold to Shutterfly in 2012
Shutterfly claims that the two parties have an agreement, which prevents Kodak from releasing a rival application. The complaint says that the My Kodak Moments app is based on the same technology as the former Gallery service.
The My Kodak Moments application is available for download on iPhone and Android smartphones.
Kodak remains silent for now
For the time being, a Kodak spokesperson has refused to comment.
It remains to be seen whether the two companies will manage to reach a deal outside court or whether the US Bankruptcy Court judge will decide who is right and who is wrong.