Interactive-video company Eko struck back against Jeffrey Katzenberg’s Quibi with its own lawsuit, accusing Quibi of infringing one of Eko’s patents and misappropriating its trade secrets.
The Eko suit, filed Tuesday in the U.S. District Court for the Central District of California Western Division, comes a day after Quibi proactively filed a federal lawsuit seeking a judgment that its Turnstyle mobile-video technology does not infringe Eko’s patent and that Quibi did not steal trade secrets.
The Quibi service is set to launch April 6 with a slate of 50 shows. “Our Turnstyle technology was developed internally at Quibi by our talented engineers and we have, in fact, received a patent for it,” the company said in a statement to Variety. “These claims have absolutely no merit and we will vigorously defend ourselves against them in court.”
Quibi’s Turnstyle feature determines the orientation of a viewer’s phone (either horizontal or vertical) and presents content in the appropriate mode. Quibi claims it began developing Turnstyle in September 2018 and last month received a patent covering various aspects of the technology — and that Eko has tried to “coerce” payments from Quibi related to Eko’s own patent.
Eko, whose investors include retailing giant Walmart, asserts that Quibi blatantly copied Eko’s features that use one of its key patents, U.S. Patent No. 10,460,765, covering a system for interactive video playback. Eko alleges Quibi employees who formerly worked at Snap stole trade secrets, including source code. The company called Quibi’s March 9 lawsuit “nothing more than a PR stunt.”
Eko’s lawsuit seeks declarations that Quibi has misappropriated Eko’s confidential and trade secret information and unspecified monetary damages, as well as an injunction to stop Quibi from “selling, offering for sale, marketing or using the Turnstyle feature.”
In addition, Eko wants the court to force Quibi to assign the patent it recently received — U.S. Patent No. 10,554,926, which covers a “method of presenting media content” — to Eko.
“Because Quibi refuses to cooperate with Eko or voluntarily rectify its blatant and egregious violation of Eko’s intellectual property rights, Eko now seeks relief from this Court to enjoin Defendant from using Eko’s confidential and trade secret information, from infringing Eko’s ‘765 patent, and to require Quibi to assign Quibi’s ’926 patent to Eko because any innovation underlying Quibi’s ‘926 patent is Eko’s, not Quibi’s,” Eko said in the lawsuit.
In March 2017, Eko co-founder and CEO Yoni Bloch met in L.A. with Katzenberg, exploring a potential majority investment in Eko by Katzenberg’s investment and holding company WnderCo. Bloch showed off Eko’s technology to Katzenberg, “including details regarding technology that Quibi now uses in its touted Turnstyle feature,” per Eko’s lawsuit. Quibi’s legal filing claims that Katzenbeg “barely remembers the meeting.”
In its complaint, Eko accuses two Quibi employees — who formerly worked for Snap — of passing along Eko’s confidential and proprietary technology to Quibi that formed the basis of Quibi’s ‘926 patent. Eko said it met with the Snap employees starting in 2015, before they joined Quibi in 2018. Eko claims the Snap staffers signed nondisclosure agreements.
After Quibi’s presentation at CES 2020 in January during which it unveiled Turnstyle, Eko sent Quibi a cease-and-desist letter demanding it stop “unauthorized use of Eko’s proprietary technology.” Shortly thereafter, Quibi was granted the ’926 patent on Feb. 4. In responding to Eko, Quibi claimed that the ex-Snap employees in question were not serving in technology roles — while Eko pointed out that one of them is among the listed inventors on Quibi’s ’926 patent.
According to Quibi’s lawsuit, the claims in the Eko-owned patent “are inapplicable to Quibi’s app and its Turnstyle functionality.” But as Eko explains in its lawsuit, the ’765 patent includes the description of an app that, when a smartphone is rotated from landscape to portrait orientation, can switch video to a “second state” that can involve “changing audio/video content playback, video dimensional ratio, video quality, and/or the position, shape and/or size of the video viewing region.”
“Quibi not only copied Eko’s technology, but applied for a patent on the exact same technology,” Eko says in the lawsuit.
Eko, previously called Interlude, was founded in 2010. The New York-based company’s growing slate of original interactive shows includes millennial workplace comedy “Damage Control,” which was developed under Eko’s content-development pact with Walmart.