Shutterfly Inc., an online photo-sharing service, has sued bankrupt Eastman Kodak Co., 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 Friday in U.S. Bankruptcy Court in Manhattan.
Shutterfly, based in Redwood City, Calif., 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, N.Y.- based Kodak, declined to comment on the lawsuit.