With just under a month to go before it launches, smartphone-based streaming service Quibi is facing accusations that it stole (and then patented) proprietary technology from interactive video company Eko.
For the uninitiated, Quibi was founded by digital video vet Jeffrey Katzenberg and has taken in a whopping $1.75 billion of funding to produce shows and movies that’ll debut in episodes of 10 minutes or less. Eko, meanwhile, hooks up with content production partners like BuzzFeed, FBE, and Marvel Cinematic Universe directors Anthony and Joe Russo to produce a variety of original content, which it then distributes on its ad-supported website and app. It’s taken in $36.5 million of backing from investors including Walmart.
Now, the two companies are suing one another over some of their core video tech.
The tech in question is Quibi’s Turnstyle feature, which detects the orientation of a user’s phone while they’re watching and flips content accordingly. If you’re thinking content flippage is nothing new and a basic feature of video platforms like YouTube, the differentiator is this: When a Quibi user flips their phone, say from vertical viewing to horizontal, they won’t see the black bars that usually appear to take up the space around vertically oriented videos. Instead, Turnstyle will instantly reoptimize the video, widening the camera shot and filling up the user’s full phone screen. The same thing happens in reverse–if a user switches from horizontal to vertical, the shot will narrow and focus in on its central element, still filling the whole screen.
Quibi unveiled Turnstyle in January during a keynote at CES 2020. Following that reveal, Eko “embarked on a campaign of threats and harassment to coerce money or a licensing deal from Quibi,” the streaming service claimed in a lawsuit filed March 9.
Quibi’s lawsuit is seeking a declaration that Turnstyle does not infringe on Eko’s patented technology, plus an order that Eko withdraw a complaint it filed with Apple’s App Store, plus unspecified monetary damages, Variety reports. It also seeks a ruling that Quibi hasn’t stolen any of Eko’s trade secrets.
That last bit is especially important because it’s a significant part of the countersuit Eko filed against Quibi one day later, on March 10. Eko alleges that two separate incidents resulted in Quibi stealing its trade secrets and tech innovations.
The first incident is a March 2017 meeting between Quibi’s Katzenberg and Eko founder/CEO Yoni Bloch, where Katzenberg was looking at investing in Eko. Eko claims that during the meeting, it demo’d its own horizontal-to-vertical tech for Katzenberg, “including details regarding technology that Quibi now uses in its touted Turnstyle feature.” (Quibi agrees Katzenberg and Bloch met, but in its suit, writes that Katzenberg “barely remembers the meeting.”)
The second incident is a series of meetings between Eko and three Snap employees that took place during 2017 and 2018. These meetings were laying groundwork for a potential–but ultimately not carried out–integration of Eko’s tech into Snapchat. After those meetings took place, all three Snap employees went to work for Quibi, Eko claims. Two of them moved to Quibi in October 2018 to work in content and product management, respectively. Quibi has said it began developing Turnstyle in September 2018.
Eko’s lawsuit alleges the three employees brought Quibi detailed information about its content-flipping tech. “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,” a company rep told Variety.
In its lawsuit, Quibi argues the trade secret allegations are “untrue and implausible on their face” because “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.”
There is one detail that seems at odds with Quibi’s argument, though: two of the employees are among the five people cited as inventors on Turnstyle’s patent.
Eko’s countersuit seeks an official declaration that Quibi stole its trade secrets, plus financial compensation of an unknown amount, plus an order to stop Quibi from “selling, offering for sale, marketing, or using the Turnstyle feature.” It also wants courts to force Quibi to sign over its recently granted Turnstyle patent to Eko.
“Our Turnstyle technology was developed internally at Quibi by our talented engineers,” a Quibi spokesperson said in a statement. “These claims have absolutely no merit and we will vigorously defend ourselves against them in court.”
Quibi’s lawsuit was filed in the U.S. District Court for Central California. Eko’s was filed in U.S. District Court for the Central District of California Western Division. As of now, no court dates have been set.