Kodak and Shutterfly trade infringement suits

Photography and imaging giant Kodak and online photo site Shutterfly have filed patent infringement suits against each other, in a dispute that could have broad implications for other online photo sharing services like Flickr, Picasa…and even Facebook, which is now the world’s largest photo sharing site. Although neither company has disclosed exactly what patents are involved in the suit—Shutterfly let the news slip in an SEC filing—industry watchers indicate Kodaks patents in the case are exceptionally broad patents that cover images stored in a central repository and which can be ordered online.

Kodak is seeking an injunction along with triple damages and costs. Shutterfly is seeking the same in its countersuit.

Although Kodak and Shutterfly have cooperated in the past on things like film developing and scanning services, the companies are now competitors, with Kodak offering many online photo services that compete directly with Shutterfly. Kodak has been hit hard by the transition to digital photography and away from traditional film-based photography, but has recently been digging deep into its patent portfolio to assert claims to technologies it believes it has played a key role in developing. At the beginning of the year, Kodak launched an infringement suit against Apple and RIM; Apple countersued, claiming Kodak violates two Apple patents related to digital imaging.

Shutterfly indicated in its SEC filing that it intends to fight the Kodak lawsuit. “[Shutterfly] believes that it has meritorious defenses to this action and intends to defend this matter vigorously.”

If the matter proceeds continues to proceed without settlement, the next logical move may be for each company to attack the validity of each other’s patents, seeking to escape any infringement claim by a finding that the technology in question wasn’t patentable in the first place. If Shutterfly attacks Kodak’s patents, the matter will no doubt be watched closely by the likes of Google, Yahoo, and Apple.

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