1 November 2020News
In 2018, two of the most admired and experienced executives in tech and content, Meg Whitman and Jeff Katzenberg, teamed up to launch “QuickBite” – later shortened to Quibi. Quibi is a “new” model where short form high quality content is delivered to your mobile device— similar to YouTube but with Netflix grade content. The key technology behind Quibi is the ability to keep the video oriented properly as you rotate your phone. Really cool technology – except for one or two problems.
Financing: In August 2018, Quibi secured $1 billion of funding from a who’s who list of investors. A second $750 million round was completed just before Quibi launched in March of 2020. No shortage of sophisticated investors, bankers, risk managers and lawyers were deeply involved and advising Quibi and their investors.
The “Uh Oh” Moment
Eko filed a patent in 2015 on video orientation technology. Quibi filed a patent on similar technology in 2018. Apparently, none of Meg and Jeff’s legion of advisors nor investors thought to evaluate or disclose that Eko might have the better IP hand, and that it might be a good idea to secure a license from Eko or make sure Quibi’s technology does not lay down on top of Eko’s IP. In March 2020 days before Quibi’s official launch, Eko sues Quibi for patent infringement, backed by the $40 billion hedge fund Elliot Management.
The Outcome: Less than six months after launching, raising $1.75 billion and being sued by Eko, Quibi shuts down.
Was the shutdown solely because of Eko and IP issues? No.
Was it partly because of a very flawed IP risk management strategy? Absolutely.
Quibi flops and plans to distribute its remaining $350 million to investors, does Eko go away? Not a chance- creating an ongoing nightmare for investors and Quibi directors alike.
Manage and invest with confidence, but do not fly blind to IP risks.
In fact, even the simplest of searches on the IPwe platform would have shown that Eko and Quibi’s patents were nearly identical – what we call a “matching score,” raising a red-flag. An IPwe Report costing $500 would have quickly flagged these IP issues for Meg and Jeff, investors and advisors, giving them the key information before the fact they could use to assess and mitigate. IP risk is a business issue executives, investors and advisors need to understand in a world where 84% of most balance sheets are intangibles.
For Executive Management: Understand the risk – IPwe Reports enable you to intelligently manage IP risk at a nominal cost. IPwe Reports deliver valuable information, in simple language easily understood by business executives, enabling you to effectively manage IP risk.
For Investors: Be informed – the nominal cost of an IPwe Report is worth its protective weight in gold. Our reports give you incredible insights to a company’s IP position relative to their market and competitors. Get informed and ask the intelligent questions.
For Advisors: Anticipate and identify– avoid putting yourselves at risk by not identifying IP risk proactively. For less than the cost of an hour of counsel time and a fraction of a deal-fee for bankers, you can use IPwe Reports to spot the issues and then applying your professional judgement to identify, better inform and advise your client.