Legal fight over Quibi’s mobile technology gets ugly

SAN FRANCISCO —  Legal sparring over mobile technology used by Quibi intensified Tuesday after technology firm Eko sued the streaming service for allegedly lifting its technology.

In a federal lawsuit filed in Los Angeles, Eko says a key feature of Quibi’s service called “turnstyle” — that allows consumers to shift their viewpoint in a video by turning their phone vertically or horizontally — copies Eko’s patented mobile technology.

“This is a case to stop the theft of Eko’s technology by Quibi,” the New York company said in its lawsuit.

Quibi has denied wrongdoing, saying it did not use trade secrets or infringe on Eko’s patent when it created “turnstyle.” The Hollywood company, led by tech veteran and Chief Executive Meg Whitman and Chairman Jeffrey Katzenberg, filed legal documents on Monday asking a federal court in L.A. to issue a declaratory judgment on the subject.

“These claims have absolutely no merit, and we will vigorously defend ourselves against them in court,” Quibi said in a statement Monday. The company declined to comment on Eko’s lawsuit.

The legal battle comes at a crucial time for Quibi, just weeks before it launches its subscription streaming service April 6. The company, which stands for “quick bites” of video, aims to distribute episodes that are told in 10 minutes or less through its app for mobile phones.

Already, the company has had a few bumps along the way, including the cancellation of its April 5 red carpet event amid concerns surrounding COVID-19, and a verbal gaffe that resulted in an apology from its CEO.

Eko, a subsidiary of Israeli JBF Interlude Ltd., believes Quibi stole its technology after becoming aware of it through demonstrations it showed to Katzenberg and Quibi employees when they previously worked with Eko’s partner, Santa Monica camera and social media company Snap.

In 2015, Eko filed an application for a patent for its technology and later that year entered into a non-disclosure agreement with Snap to integrate its technology for its Snapchat app. That agreement barred the parties from disclosing, publishing, distributing or disseminating confidential information to anyone outside the company’s employees and those bound by the agreement, Eko said in its lawsuit.

“This approach was consistent with Eko’s approach to protection of its technology, which includes storage of code on password protected servers, requiring nondisclosure agreements with third parties, and training of employees not to use or disclose confidential, commercially valuable information,” Eko said.

Separately, in March 2017, Eko CEO Yoni Bloch met with Katzenberg as a potential investor. Bloch showed the studio mogul a demo of Eko’s technology, the company said.

Three Snap employees who saw Eko’s technology later joined Quibi, Eko said. Two of those three employees were listed as the inventors on Quibi’s patent for its “turnstyle” technology, which was filed in 2019.

Snap declined to comment.

Quibi said in its legal documents that it’s implausible for the former Snap employees to have received Eko’s source code because they are not engineers or computer programmers.

Eko has notified Apple Inc. of its concerns on Quibi infringing on its patent. On its App Store review guidelines, Apple said app developers should only use content that they have created or have a license to include. An Apple spokesman declined to comment.

It is unclear whether Eko has filed a similar complaint with Google Play Store. Google did not return a request for comment.

Ron Abrams, an intellectual property attorney at Brutzkus Gubner, said it is possible for people to invent new technology in a way that is not covered by existing patents.

“You can look at patents and if you can figure out a different way, that’s all fine,” Abrams said. “That’s what the patent system is all about.”

But he also said the timeline of how the former Snap employees who were under the NDA moved to Quibi and were later listed as inventors in Quibi’s patent, could help Eko’s case.

“All those details matter,” Abrams said.

Quibi said in a statement Monday that it is looking forward to launching its app April 6. The service will launch with 50 titles, including the thriller “Survive,” starring Sophie Turner, formerly of “Game of Thrones.” Quibi subscriptions cost $4.99 a month with ads and $7.99 without ads.