Eastman Kodak hasn’t been shy about using its patents to wring some licensing money out of the smartphone industry, but the company recently crossed a new frontier.
Kodak, which has gone after several mobile-phone companies over the past year, is now targeting an internet company, with its recent lawsuit against Shutterfly. And, more importantly, it could easily use those same patents to go after other companies in that space, from startups like SmugMug and Snapfish to larger entities like Google’s Picasa or Yahoo-owned Flickr.
Kodak has asserted five patents in the lawsuit against Shutterfly, which it claims are being infringed by various Shutterfly services, including the sales of prints and photobooks through its web site. It may find Shutterfly an unusually tough opponent, as the startup has a handful of its own patents and has hired top-notch patent lawyers. This week, Shutterfly counter-sued Kodak in a federal court in California.
A Kodak spokesman said the company “has invested hundreds of millions of dollars to develop leading technology enabling online imaging systems and services, and, as a result, we have more than 400 patents in this space alone, and thousands more in the broader imaging category. We are committed to protecting these assets from unauthorized use.” He added that Kodak considers Shutterfly’s patent counter-suit, filed against Kodak on Monday, to be nothing more than a litigation tactic.
The spokesman didn’t say whether Kodak plans to sue other photo-sharing websites.The online photo-sharing space includes dozens of small companies as well as a few heavyweights like Flickr and Facebook. The industry has seen a number of patent suits, most of them brought by so-called patent trolls that are just shell companies that own a few patents. Those lawsuits don’t carry the heft or threat of a suit brought by a well-resourced operating company like Kodak.
Earlier this year, Kodak brought lawsuits against Apple (NSDQ: AAPL) and Research in Motion (NSDQ: RIMM) alleging infringement by various mobile phones put out by those two companies. This came shortly after Kodak settled two-year-old patent litigation against LG (SEO: 066570) and Samsung. Under those settlements, both Samsung and LG are paying Kodak an undisclosed amount of licensing money.
In the same SEC documents that announced it had filed a counter-suit, Shutterfly said it will vigorously defend itself against Kodak’s lawsuit.
It’s a common tactic for companies hit with a patent suit to try to gain leverage and defend itself by filing a counter-suit, either with its own patents or with acquired patents. Shutterfly’s patents are home-grown; in its suit, the smaller company says it has seven patents that are being infringed by Kodak’s Gallery Software.