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Cable/Video

Quibi in legal quarrel over its 'Turnstyle' tech

Quibi is embroiled in a legal tussle centering on a key technology that will help power its premium, short-form, mobile-focused video streaming service set to launch April 6.

In a complaint filed Monday with a California court, Quibi is seeking a declaratory judgment that its "Turnstyle" technology does not infringe on a patent owned by Eko, a company that has developed an interactive storytelling platform and original shows/series such as Wizard School Dropout and Timeline.

As a critical component of Quibi's new mobile streaming service, Turnstyle is designed to seamlessly maintain the full-screen experience as content is viewed in portrait or landscape mode on a mobile device. Quibi demonstrated the technique during a CES keynote on January 8, 2020. Turnstyle will be used to present Quibi's lineup of TV shows, movies and news programs as well as ads. Here's a demo of Turnstyle in action:

Quibi said it filed the complaint against Eko following a demand letter sent to Quibi two weeks after its CES demo alleging that certain Quibi employees who previously worked at Snap obtained unspecified "trade secrets" and "source code" for Eko's service while at Snap. Quibi claims that Eko's allegations are "untrue and implausible on their face," as both employees referenced by Eko are not engineers or computer programmers and do not read source code.

Quibi claims that Eko, an interactive video technology company with a presence in New York and Tel Aviv, Israel, "embarked on a campaign of threats and harassment to coerce money or a licensing deal from Quibi."

According to Quibi, Eko's alleged wrongful activities include claims that Quibi is infringing on an Eko patent and misappropriating trade secrets. Quibi also alleged that Eko submitted a complaint to the Apple App Store in early March in an attempt to derail the launch of the Quibi app, and that Eko pitched the Wall Street Journal and Recode on "the false narrative" that Quibi is infringing on Eko's intellectual property.

The Eko patent in question – US No. 10,460,765 – describes "Systems and Methods for Adaptive and Responsive Video." Per the patent abstract, "during playback of the video, a change in one of the device properties is detected, and the video is seamlessly transitioned to a second state based on the change." Eko's '765 patent was issued on October 29, 2019.

Quibi claims its technology was developed independently and without using any Eko trade secrets. Quibi also notes it was issued a "media content presentation" patent – US No. 10,554,926 – on February 4, 2020, that describes the technology underpinning the Turnstyle technique.

Via its complaint, Quibi is seeking to enjoin Eko "from taking any further steps to improperly tarnish Quibi's brand or to interfere with Quibi's highly anticipated launch."

'Limited contacts' with Eko
Quibi and Eko are not complete strangers. Quibi outlined some of its "limited contacts" with Eko in the complaint:

  • In late March 2017, Quibi founder Jeffrey Katzenberg "held an informational meeting" with Eko CEO Yoni Bloch. The purpose, court docs explain, was to pitch Katzenberg to invest in Eko. "The meeting was not conducted under a non-disclosure agreement or any other expectation of confidentiality. No confidential information was requested or provided to Mr. Katzenberg," Quibi told the court. Katzenberg ultimately decided not to invest. In a statement issued today, Eko said the meeting discussed a potential investment that would give Quibi majority control of Eko.

  • In February 2019, two Quibi employees held a breakfast meeting with Eko in Beverly Hills, California, with the purpose to get "reacquainted" and for Eko to pitch unscripted video content to Quibi. That meeting also was not conducted under an NDA, and was held well after development of Quibi's app was underway, Quibi said.

  • On March 28, 2019, two Quibi employees visited Eko's offices in New York for a demo of Quibi's platform, and no proprietary information or trade secrets were exchanged, Quibi said, adding that an Eko employee followed up with an email to Quibi stating: "Loved your demo, and excited to see where you guys are headed."

    Eko, which markets a free online tool for content creators called Eko Studio, has been asked for comment.

    Update: In a statement sent Tuesday afternoon, Eko labeled Quibi's complaint "nothing more than a PR stunt," and that it is likewise "telling that Quibi filed the motion only after learning the Wall Street Journal was going to publish and article exposing allegations of Quibi's theft of Eko's technology." It also called Quibi's technology "a near-identical copy" to Eko's

    The statement continued: "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 demo 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."

    Eko's full statement can be read below on the message board.

    The legal dust-up arrives less than a month before Quibi debuts a service that will cost $4.99 per month with ads, and $7.99 without. Quibi, which has raised about $1.75 billion, will launch with about 50 shows and movies involving major Hollywood talent.

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    — Jeff Baumgartner, Senior Editor, Light Reading

  • Jeff Baumgartner 3/10/2020 | 5:41:43 PM
    Eko's response Here's the full statement from Eko: 

    Quibi's declaratory judgment motion is 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.   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 demo 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.

    In March 2017, Mr. Katzenberg met with Eko founder and CEO Yoni Bloch and discussed 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. Separately, over a period of several months in 2017 and 2018, Mr. Bloch met with three Snapchat employees to work toward a potential integration of Eko technology into the Snapchat app. With nondisclosure agreements in place, Mr. Bloch demoed the technology to these same Snap employees and shared pertinent code. In October 2018, two of those Snap employees joined Quibi.  They were both among the so-called inventors of Quibi's alleged patent. The third Snap employee joined Quibi in the spring of 2019.

    In February 2019, Quibi informed Eko that it had not started building its technology. The next month, just weeks before Quibi filed for its patent, Mr. Bloch met with the two Quibi employees to discuss possible Eko-Quibi partnerships. The third Snap employee joined Quibi in the spring of 2019.

    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. 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.

     

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