The bankrupt Eastman Kodak has agreed to sell its online photo services business to Shutterfly Inc for US$23.8 million; however a dispute with Apple over patent rights is complicating things, reports “Reuters” (

The company that invented the hand-held camera has said it will quit the camera business and is expected to fetch $1 billion to $2 billion from the sale of about 1,100 digital patents, which is due to get under way by June 30, the article adds.

At a hearing next week on March 8, a bankruptcy judge will hear Apple’s motion to move forward with its patent-infringement suit. Apple has asked the bankruptcy court to lift the automatic stay applied to pending litigation against Kodak when the company filed for Chapter 11 on Jan. 19.

According to a January filing submitted to the US Bankruptcy Court in the Southern District of New York, Apple stateds that Kodak is seeking authority to “enter into a $950 million postpetition financing facility secured by security interests in and liens upon substantially all of Kodak’s assets, including certain patents that are subject to ongoing patent ownership and patent infringement disputes between Kodak and Apple.”

In the filing, Apple noted that the dispute involves “pioneering work on digital camera and imaging technology and related hardware, software, and user and communication interfaces” dating back to the early 1990s, when Apple partnered with Kodak “to explore how the two companies could work together on various projects including commercialization of Apple’s digital cameras.”

In December 2011 Kodak filed lawsuits against Apple and HTC Corp., alleging the infringement of certain Kodak patents relating to digital imaging technology. A complaint filed with the U.S. International Trade Commission (ITC) specifically claimed that certain of Apple’s iPhones, iPads, and iPods, and certain of HTC’s smartphones and tablets infringe Kodak patents that relate to technology for transmitting images.

Kodak also alleged that certain of HTC’s smartphones infringe a patent that covers technology related to a method for previewing images which is already the subject of pending actions against Apple. Separately, Kodak filed suits in January against Apple and HTC in U.S. District Court for the Western District of New York alleging the same infringement.

In the complaint against Apple and HTC, Kodak sought from the ITC an exclusion order preventing the importation of infringing devices, including mobile telephones and wireless communication devices featuring digital cameras. In the suits against Apple and HTC in U.S. District Court, Kodak alleged infringement of the same patents and is seeking to permanently enjoin Apple and HTC from further infringement, as well as the recovery of damages.