Quibi — less than a month away from the commercial launch of its mobile-subscription service — is trying to dismiss patent claims from a company that is asserting the Jeffrey Katzenberg-led startup stole its technology.
In a lawsuit Monday (March 9), Quibi asked a federal court for a ruling that its technology does not infringe a patent held by Eko, an interactive-video company whose investors include Walmart.
The dispute concerns Quibi’s Turnstyle feature that 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’s lawyers this January sent a letter seeking to “coerce” payments from Quibi related to Eko’s own patent. Eko asserts that Quibi blatantly copied Eko’s features that use its patent covering a system for interactive video playback.
Bankrolled with $1.75 billion in funding, Quibi is led by chairman Katzenberg and CEO Meg Whitman. The company last week announced about 50 original movies and shows set for the April 6 U.S. launch of the service.
The company’s lawsuit alleges that, “After seeing Quibi’s keynote address at CES, Eko embarked on a campaign of threats and harassment to coerce money or a licensing deal from Quibi.” Quibi also claims in the suit that Eko submitted a complaint last week to the Apple App Store “in an attempt to derail the scheduled launch of Quibi’s app,” and that Eko pitched “the false narrative” that Quibi infringes Eko’s patent and misappropriated Eko trade secrets to reporters at the Wall Street Journal and Recode.
Eko, in a statement to Variety, called Quibi’s lawsuit “nothing more than a PR stunt.”
“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,” a company rep said. “Eko will take the legal actions necessary to defend its intellectual property and looks forward to demonstrating its patent rights to the court.”
Both companies agree that in March 2017, Katzenberg met with Eko founder/CEO Yoni Bloch and discussed a potential investment in Eko. Eko claims that it demo’d its horizontal-to-vertical video technology for Katzenberg at that meeting, before Katzenberg ultimately decided to pass on investing in Eko. (In its lawsuit, Quibi claims that Katzenberg “barely remembers the meeting.”)
Separately, over a period of several months in 2017 and 2018, Bloch met with three Snap employees under nondisclosure agreements to work toward “a potential integration of Eko technology into the Snapchat app,” according to Eko. In October 2018, two of those Snap employees joined Quibi while the third Snap employee joined Quibi in the spring of 2019, Eko claims. Last year Bloch met with Quibi employees to discuss possible Eko-Quibi partnerships — just a few weeks for Quibi filed for a patent on the Turnstyle feature.
“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 rep said.
Quibi called the Eko’s allegations about the ex-Snap employees stealing trade secrets “untrue and implausible on their face: The employees referenced by Eko are not engineers or computer programmers, do not read source code, and would have had no reason to request or obtain Eko code,” according to the lawsuit. “In any event, no Quibi employee brought or used any Eko trade secrets, computer code, or proprietary information to Quibi.”
Quibi filed the lawsuit in the U.S. District Court for Central California. The company seeks a declaration that Quibi does not infringe Eko’s patent and seeks to enjoin Eko from asserting any claim of the patent against Quibi. The suit also seeks a ruling that Quibi hasn’t stolen any Eko trade secrets as well as an order directing Eko to withdraw its infringement complaint to the Apple App Store. Quibi also is seeking unspecified monetary damages.
“Our Turnstyle technology was developed internally at Quibi by our talented engineers and we have, in fact, received a patent for it,” a spokeswoman for the startup said in a statement. “These claims have absolutely no merit and we will vigorously defend ourselves against them in court.”
On Oct. 29, 2019, the U.S. Patent and Trademark Office granted Eko U.S. Patent No. 10,460,765, covering “Systems and methods for adaptive and responsive video.” Quibi received U.S. Patent No. 10,554,926 on Feb. 4, 2020, covering a “method of presenting media content” in which a “plurality of assets is received at a mobile device comprising a display and an orientation sensor.”
According to Quibi’s lawsuit, the claims in the Eko-owned patent “are inapplicable to Quibi’s app and its Turnstyle functionality.” For example, according to Quibi, its app receives in a single stream a first video asset in portrait mode and a second video asset in landscape mode, whereas the Eko patent covers a “mapping of video presentations to media player window height/width ranges.”
Download Quibi’s complaint at this link.