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Shutterfly Accuses Kodak of Breach of Non-Compete via Online Album App

Posted on Jan 01, 2016

Online photo album company Shutterfly, Inc. is accusing Eastman Kodak Co. of violating a non-compete agreement between the two companies. Shutterfly filed the suit on March 22 in the U.S. Bankruptcy Court for the Southern District of New York. Shutterfly alleges that Kodak’s “My Kodak Moments” app allows users to turn their Facebook photos into photo books, in violation of the terms of the non-compete. Shutterfly is seeking unspecified financial damages, as well as asking the court to shut down the app, which users currently have access to without charge.

In May of 2012, Kodak sold its Kodak Gallery online photo album business to Shutterfly. The sale took place as part of Kodak’s Chapter 11 bankruptcy, for a price of $23.8 million. One of the terms of the sale between the companies was that Kodak would not compete with Shutterfly for the next three years with regard to the online album business. In its lawsuit, Shutterfly alleges that Kodak is in violation of the non-compete by promoting its My Kodak Moments app.

Kodak’s My Kodak Moments app is free to consumers and was initially unveiled in 2010. Users are able to take their Facebook photos and lay them out into album form. Shutterfly states that it has had multiple communications with Kodak regarding this alleged non-compete violation issue. Kodak, however, has reportedly denied that the app is in violation of the agreement and refuses to cease activity.  

Contact a New York non-compete attorney today at (888) 497-3410 for more information about this and other business litigation matters.

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