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Photo Foes Go Toe to Toe: Shutterfly and Kodak Trade Lawsuits

December 15, 2010

In an 8-K filed today, Shutterfly Inc. announced it is being sued by Eastman Kodak, and is replying with a suit of its own.  Both lawsuits revolve around patent infringement claims.

The legal departments of both Shutterfly and Kodak have been busy in recent years.  The latest Shutterfly 10-K discloses that the company has had to defend itself against three other lawsuits, all for patent infringement.   Meanwhile, according to an article in today’s Wall Street Journal online, Kodak’s revenue in recent years has come “in large part” from successful patent settlements.  “Kodak has suits pending against Apple Inc. (AAPL) and Research in Motion Ltd. (RIMM), and last winter scored significant royalty deals with Samsung Electronic s Co. Ltd. (SSNHY, 005930.SE) and LG Electronics Inc. (066570.SE) for its digital-camera technology,” the article notes.

Photo by Rob Brewer. Some rights reserved.

Shutterfly’s track record suggests it should not be underestimated.  When the company announced its intention to go public in 2006, many analysts, including Timothy J. Mullaney of Businessweek and Bill Simpson of tradingipos.com (republished in Seeking Alpha) expressed skepticism about Shutterfly’s prospects.   Yet Shutterfly has done well, with both its net revenues and gross profit increasing healthily year over year since its IPO (according to its most recent 10-K).

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