Elliott backs Eko in legal fight against Katzenberg’s Quibi

Activist investor outfit Elliott Management has reportedly joined forces with technology outfit Eko to finance a lawsuit against Jeffrey Katzenberg’s Quibi.

According to the Wall Street Journal, Elliott is offering financial support for the intellectual property infringement lawsuit in exchange for equity in the company.

Eko took action against Quibi in March, alleging that the high-profile short-form video streamer stole technology used for its Turnstyle feature, which switches video from vertical to horizontal formats in real time for mobile users. Eko’s lawsuit claims that the company shared its technology with Quibi employees bound by non-disclosure agreements.

Quibi dismissed the claim as being without merit and filed a counter motion to have the case dismissed.

A preliminary hearing on the case in the Los Angeles Federal Court is scheduled for later this week.

According to the Journal, Elliot founder Paul Singer has ties with some of Eko’s investors.

Eko is backed by Sequoia Capital, Intel Capital, Warner Music Group, Samsung, Walmart, and others, and is involved in a joint venture with Walmart to develop content, ranging cooking shows to interactive toy catalogues, to help the retail giant engage with customers.

Elliott’s media and telecom-related investments include AT&T and Telecom Italia, where it has been active in pushing for changes in the direction of the companies’ strategies. In Italy, it engaged in a long-running battle for control of the telco with France’s Vivendi after seizing control of the board.

In the case of AT&T, it pressed for debt reduction and took a highly critical view of the company’s media investments, including its acquisition of Time Warner as well as its ownership of DTH satellite pay TV outfit DirecTV. It secured a commitment from the company not to engage in further large-scale acquisitions.

Katzenberg told Reuters at the end of last month that the Quibi app had been downloaded 2.7 million times since launch.