1:51pm PT by Ashley Cullins
Quibi Sues Over Mobile Tech Dispute Ahead of Launch
Quibi is asking a California judge to end "a campaign of threats and harassment" ahead of its April 6 launch.
Interactive media company Eko has accused Quibi of patent infringement and stealing trade secrets, according to a complaint filed Monday in California federal court. The dispute centers on the fledgling streamer's "Turnstyle" — a feature that detects the orientation of a user's smartphone to determine whether they see a video in landscape or portrait mode. The startup, which is led by CEO Meg Whitman and chairman Jeffrey Katzenberg, says it announced the technology at the Consumer Electronics Show in January, which made it a target for "a company looking to make a name for itself and to capitalize on Quibi’s early acclaim."
Katzenberg in March 2017 met with Eko CEO Yoni Bloch, who was pitching his platform for an investment. The former DreamWorks Animation chief declined to invest and "barely remembers the meeting." The next year, he formed Quibi. Then, in March 2019, two Quibi employees met with Eko to "get reacquainted" and hear a pitch for unscripted video content, according to the complaint.
After CES, Eko sent Quibi a letter alleging that its employees stole trade secrets and source code — but Quibi maintains the employees who are accused of such conduct "are not engineers or computer programmers, do not read source code, and would have had no reason to request or obtain Eko code."
Quibi also says Eko sent a notice to Apple alleging patent infringement and trade secret misappropriation, and contacted reporters at Recode and The Wall Street Journal.
“Our Turnstyle technology was developed internally at Quibi by our talented engineers and we have, in fact, received a patent for it," said a spokeswoman for Quibi in a statement to The Hollywood Reporter. "These claims have absolutely no merit and we will vigorously defend ourselves against them in court.”
Quibi also argues the patent it is accused of infringing protects functionality its app doesn't use. It's asking the court for a declaration that it doesn't infringe the patent and that it hasn't misappropriated any trade secrets — and is seeking an injunction that bars Eko from continuing to make such allegations.
In a statement, a spokeswoman for Eko called Quibi's complaint "nothing more than a PR stunt." She continues, "It is telling that Quibi filed the motion only after learning the Wall Street Journal was going to publish an article exposing allegations of Quibi's theft of Eko's technology. Eko filed for a patent for its horizontal-to-vertical video technology in 2015. Quibi did not file for a patent covering the same technology until May 2019. And, that followed confidential demoed by Eko of the technology to key Quibi top executives, including some of Quibi’s so-called patent inventors and Quibi chairman and founder Jeffrey Katzenberg."
She confirms that Katzenberg met with Block in 2017 about "a potential investment in Eko that would give Quibi majority control. Eko's horizontal-to-vertical technology was demoed to Mr. Katzenberg at that meeting." She also said that, from 2017 to 2018, Eko demoed its technology for three Snapchat employees, all of whom later went to work for Quibi. "Eko was stunned to learn that the Quibi technology is a near-identical copy of its own, from the patented smart video response system down to the way files are created, formatted and stored. [The] Eko patent was granted in October 2019. Eko will take the legal actions necessary to defend its intellectual property and looks forward to demonstrating its patent rights to the court."
Eko, through parent company JBF Interlude, on Tuesday filed its own suit against Quibi.
Its complaint alleges the former Snapchat employees who had access to its confidential information were bound by a non-disclosure agreement and are listed as inventors on the Quibi patent at issue. Eko is asking the court to give it ownership of the patent and to enjoin Quibi from using its trade secrets. (Read the complaint here.)
Quibi is set to launch its mobile video service on April 6. Much of its programming takes advantage of the Turnstyle technology, which ensures that a viewer can watch a video in either horizontal or vertical orientation without a change in picture quality. Some videos also use the feature to advance the storytelling, showing different perspectives on the same story depending on which way the phone is being held.
March 10, 2:30 p.m. This story has been updated with a statement from Eko and information from its lawsuit against Quibi.