SAN FRANCISCO _ Legal sparring over mobile technology used by Hollywood-based Quibi intensified on Tuesday after New York-based technology firm Eko sued the streaming service for allegedly lifting its technology.
In a federal lawsuit filed in L.A., 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 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 company, led by tech veteran and CEO 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 did not immediately respond to a request for comment on Tuesday's lawsuit.
The legal battle comes at a critical time for Quibi, just weeks before it launches its subscription streaming service on 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, which is a subsidiary of Israeli-firm 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-based camera and social media company Snap.
In 2015, Eko filed an application for a patent for its technology and later that year entered into an NDA with Snap to integrate its technology for its Snapchat app. That NDA barred the parties from disclosing, publishing, distributing or disseminating confidential information to anyone outside of 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.
Eko has notified Apple 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 the Google Play Store. Google did not return a request for comment.
Ron Abrams, an intellectual property attorney at Brutzkus Gubner, said it could be tough to prove that there was a misappropriation of trade secrets, noting that Quibi's legal documents said no NDA was signed at the March 2017 meeting between Eko's CEO and Katzenberg.
"If you're going to spill your guts and give people ideas, that's on you," Abrams said. "That's the risk you have to take when you're trying to raise money or trying to get an investor. You got to give them some idea of what you're doing and you can't put the toothpaste back in the tube once it's out."
Quibi said in a statement on Monday that it is looking forward to launching its app on 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.
