Hedge fund Elliott Management Corp. is financing Eko’s patent lawsuit against streaming service Quibi, The Wall Street Journal reports. Eko’s suit claims that Quibi stole trade secrets and that its “Turnstyle” feature violates Eko’s patents. Turnstyle allows Quibi videos to play differently depending on the orientation —vertical or horizontal— of the viewer’s phone, switching in real time.
Eko wants Quibi to stop using its technology or license it and is suing for a preliminary injunction and damages. As part of the financing arrangement, Elliott would get an equity stake in Eko, according to the WSJ, though it’s not clear how much money is involved.
Quibi, the mobile video app that launched last month, raised nearly $2 billion to produce “quick bite” shows that last a max of 10 minutes. It filed a lawsuit against Eko a day before Eko filed its suit, asking a court to find that Turnstyle doesn’t infringe Eko’s patent. Quibi told The Verge in March that Turnstyle was its patented technology and that Eko’s claims were “without merit.”
Eko and Quibi did not immediately respond to requests for comment on Sunday. Elliott Management also did not respond to a request for comment.
Elliott Management is known for aggressive investor activism, backed by more than $40 billion in capital. The group was behind a recent push to replace Jack Dorsey as CEO of Twitter. The two sides reached an agreement in March that allowed Dorsey to remain as CEO but gave Elliott executive Jesse Cohn a seat on Twitter’s board, and a seat on a board committee tasked with evaluating a CEO succession plan for Twitter.
(Disclosure: Vox Media, which owns The Verge, has a deal with Quibi to produce a Polygon Daily Essential, and there have been talks about a Verge show.)