Hollywood mogul Jeffrey Katzenberg is resorting to unusual tactics to fend off a lawsuit against his struggling video startup Quibi, The Post has learned.
Despite publicly blasting patent infringement claims by video company Eko as meritless, Quibi has quietly hired private investigators to dig up dirt on the rival — including its founder Yoni Bloch and its billionaire backer Paul Singer, who’s bankrolling the Quibi lawsuit, sources said.
The Post has spoken with five ex-Eko employees who have fielded calls from Quibi’s private eyes in recent weeks. They say the investigators didn’t ask about the technology issues in the lawsuit and focused instead on Bloch’s management style, Eko’s work culture and internal disputes that might be brewing beneath the surface.
A techie who worked at Eko eight years ago said he was asked “if there was any shouting in the office” or if he noticed if Eko was in “financial trouble.”
“I wasn’t aware of financial problems … and the environment was great,” said this person, who asked not to be identified. “They asked if I was aware who invested in the company. I suspected that they were trying to get some dirty information,” he said. “It’s not like I was hiding anything. The phone call kept me busy while I was shopping.”
In March, Eko sued the well-funded Katzenberg startup, claiming it stole Eko’s technology for playing videos either vertically and horizontally, depending on how the user is holding the smartphone. The March 20 lawsuit alleges that Quibi employees had access to Eko’s technology through nondisclosure agreements.
Quibi, which has tapped big stars like Kevin Hart, Jennifer Lopez and Nick Jonas for its short-form videos, has denied the claims, and has asked a Los Angeles federal court judge to issue a declaratory judgment in its favor.
The dispute comes as Quibi, launched in the midst of the pandemic with a focus on under-10-minute films, struggles to sign up subscribers. In a court hearing last month, Quibi’s lawyers argued that Eko’s demands to disable the technology pending the outcome of their case would hinder its ability to sign up new customers.
Austin Beers, who worked at Eko until 2015, said he was called on June 4 by a man who explained he was working with Quibi’s lawyers.
“He asked, ‘how ethical was the company?’, ‘Did they cut any corners’ and if I knew any of the investors, particularly Paul Singer,” Beers said.
Beers, who has never met Singer, said some of the questions appeared to stem from bad reviews about Eko on Glassdoor.com. Beers acknowledged that the startup culture means long hours and that his bosses, who were Israeli, had an intense management style.
“Americans are used to a softer style, a compliment sandwich. Americans love that. Israelis think that’s bulls–t. It took me four months to realize that it’s just passion, not personal.”
Assaf Dagan, who co-founded a now-defunct startup with Bloch called Hykoo in 2015, said a man and woman called him last week asking about Bloch’s “conduct.”
“They asked some questions about Yoni’s conduct and our relationship. How did it end when he closed the company? Were people angry at Yoni?” Dagan said.
The investigators also asked whether Bloch had taken the company’s storytelling technology with him to Eko — leaving Hykoo to flounder.
“There was a narrative they were digging about Yoni using this technology behind our backs,” Dagan said before dismissing the notion.
Sources say the calls came from a number associated with the W Group, a Walnut Creek, Calif., private investigation firm founded by Scott Wilcox. Neither Wilcox nor Quibi’s Morrison & Foerster lawyers replied to requests for comment.
In a statement, Quibi said: “This litigation is completely without merit, and we are using every resource at our disposal to defend against it — and will continue to do so.”
Despite TV shows like “The Good Wife” popularizing the idea of private investigators being called on every case, legal experts say it’s not common, and suggests Quibi may be seeking to undercut Eko’s claims outside of court.
“They are trying to get some dirt, to find something embarrassing to cause the other side to want to drop the lawsuit,” opined Brad Simon, a partner at Windels Marx who specializes in white-collar crime. Such “sleazy tactics” are not often looked upon kindly by judges, but they have become a strategy in “high stakes” litigations, he added.
“This is the sort of thing that happens when one side is desperate,” another lawyer, who asked not to be named, said.
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