A company that has accused Quibi Holdings LLC of infringing on patented technology is seeking a court order barring the streaming-video service from distributing some of its assets to investors as it winds down the business, until the legal dispute is resolved.
Interactive-video company Eko is asking for Quibi to be forced to set aside at least $101.9 million and for bank accounts and other assets connected to the technology to be frozen, according to papers filed Wednesday in a federal court in Los Angeles. Eko’s lawsuit, financed by hedge-fund manager Elliott Management Corp., concerns Quibi’s Turnstyle feature, which plays different videos depending on whether users hold their phones vertically or horizontally.
Quibi has denied infringing on Eko’s patents or misappropriating trade secrets and has called the lawsuit meritless.
The streaming service said last week it was shutting down just six months after its launch. Quibi was designed for watching entertainment in short bursts on smartphones, but the coronavirus pandemic kept many would-be subscribers away from the kinds of on-the-go situations executives had envisioned.
After the shutdown announcement, Eko sought assurances from Quibi that the business wouldn’t sell off the Turnstyle technology and would preserve cash to cover a payout if Eko’s suit prevailed.