Despite Quibi’s failure to corner the short-form Netflix market, its IP dispute with Eko is still very much alive. Eko is being funded by Elliott Management—which has fought Quibi’s every attempt to get through the discovery process. In fact, Elliott tried to quash an SDNY subpoena investigating how much Elliott knows as the legal funder of the case.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Despite Quibi’s failure to corner the short-form Netflix market, its IP dispute with Eko is still very much alive. Eko is being funded by Elliott Management—which has fought Quibi’s every attempt to get through the discovery process. In fact, Elliott tried to quash an SDNY subpoena investigating how much Elliott knows as the legal funder of the case.
Above the Law explains that this situation and its outcome should be of interest to litigation funders, as well as IP litigators and their clients. After all, the questions raised by Quibi’s opposition to Eko’s attempt to quash the subpoena could set precedent for future IP cases that are backed by third-party funding.
Some have speculated that Elliott’s decision to fund Eko was predicated on a romantic relationship involving a founder at Elliott. Others are focusing on Elliott’s unusual decision to allow Eko to run the case as if money were not an issue.
Quibi seems to suggest that Eko’s inability to demonstrate its assertions is reason enough to allow discovery into the funding agreement. The company also suggest that Eko’s claim for damages is ‘unusually aggressive’ to the point of suspicion. Earlier in the case, Quibi sought to deny that it was the giant in a David v Goliath situation. Now that Quibi had folded, the likelihood of Eko using that argument is slim.
Quibi has further suggested that Eko may be controlling litigation and settlement decisions, contrary to what ethical standards allow. Combined with accusations of Elliott’s disclosure of funding being intentionally belated, it’s a compelling argument for increased discovery.
Ultimately, Quibi asserts that Elliott’s relationship with Eko is business related, not legal in nature. How the court rules in this motion will no doubt impact discovery relating to litigation funders for some time to come.
