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March 25, 2013

Shutterfly sues Kodak of violating Gallery business sale agreement

My Kodak Moments App breaches the sale agreement by establishing a competing business

By CBR Staff Writer

Online photo- sharing service Shutterfly has filed a lawsuit against Eastman Kodak, accusing it of breaching a noncompetition agreement including the sale of Kodak Gallery business.

Kodak’s My Kodak Moments app, which allows users to create photo albums and order prints from their smartphones, is clearly prohibited under the signed agreement.

In 2012, Shutterfly acquired Kodak Gallery, a rival online photo-sharing business, for $23.8m, which competed with Shutterfly.

Shutterfly said in its filing that the My Kodak Moments App breaches the sale agreement by establishing a competing business.

Upon the completion of acquisition, Kodak has transferred accounts of Kodak Gallery’s 75 million users in the US and Canada to Shutterfly.

Additionally, Shutterfly alleges that My Kodak Moments app is powered by the same technology that powers Kodak Gallery.

Kodak filed for bankruptcy in January 2012 and revealed that Kodak Gallery was in need of a significant investment to increase competition and that planned t sell it as it was no longer an important component to its scheme.

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