Quibi Holdings, LLC v. Interlude US, Inc., 2:20-cv-02250

Background

Eko (Interlude) develops interactive mobile-video "rotation" technology (portrait/landscape with different content) and alleges some non-public aspects were shown to Jeffrey Katzenberg on March 22, 2017.
Katzenberg expressed interest in acquiring Eko's technology; Quibi was later founded (Oct. 2017) and launched a "Turnstyle" feature that Eko says uses its ideas.
Eko filed a consolidated action alleging, inter alia, breach of implied-in-fact contract (Desny/Grosso theory) against Katzenberg and trade secret and patent claims against Quibi; Eko filed a Third Amended Complaint asserting eight claims.
Quibi and Katzenberg moved to dismiss Count I (implied contract) and Quibi separately moved to stay Eko's patent claims pending inter partes review (IPR) petitions it filed against the '220 patent (and said it would file against the '066 patent).
The court rejected dismissal of the implied-contract claim as to Katzenberg (pleading sufficiency), but dismissed Eko's aiding-and-abetting / implied-contract theory against Quibi (no privity; aiding-and-abetting applies to torts), with leave to amend as to Quibi.
The court denied Quibi's stay motion as premature (PTAB had not decided institution) and because IPR might not simplify or promptly resolve the litigation; denial was without prejudice to renew if PTAB institutes.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Eko pleaded a breach of implied-in-fact contract against Katzenberg	Bloch disclosed non-public interactive-video ideas at meeting; Katzenberg said he wanted to buy/was interested, so he accepted disclosure knowing payment was expected	Katzenberg: no facts show he agreed to pay or that disclosures imposed a contractual duty; some disclosed material was public	Denied dismissal as to Katzenberg — pleadings plausibly allege Desny/Grosso elements (prepared work, disclosed for sale, offeree accepted knowing conditions)
Whether Quibi can be liable for aiding and abetting or be sued for breach of implied contract	Eko alleged Quibi aided Katzenberg and benefited from Turnstyle; TAC alleges Quibi "aided and abetted" Katzenberg's breach and also claims against Quibi	Quibi: it did not exist on the date of the pitch (no privity or contract); aiding-and-abetting applies only to torts, not breaches of contract	Court dismissed implied-contract/aiding-and-abetting theory against Quibi (no basis for implied contract with Quibi; aiding-and-abetting not available for contract breach under CA law); leave to amend granted for Quibi claims
Whether to stay patent claims pending Quibi's IPR petitions	Eko: stay is premature and IPR may not simplify this case; many non-patent issues (trade secrets, other patents) remain	Quibi: IPR petitions likely to be instituted and could eliminate or narrow claims and avoid duplicative proceedings/damages	Denied without prejudice: PTAB had not yet instituted IPRs so simplification was speculative; even if instituted, IPR may not resolve all issues or avoid delay

Key Cases Cited

Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir. 2004) (setting Ninth Circuit test for Desny implied-in-fact idea-submission claim)
Desny v. Wilder, 46 Cal.2d 715 (Cal. 1956) (California Supreme Court recognizing implied-in-fact contract protection for submitted ideas)
Montz v. Pilgrim Films & Television, Inc., 649 F.3d 975 (9th Cir. 2011) (discussing scope of idea-submission claims and relation to copyright preemption)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must contain factual content plausibly suggesting entitlement to relief)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (court may disregard conclusory allegations at pleading stage)
SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018) (PTAB must address every claim challenged in instituted IPR)
Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) (federal courts have inherent power to stay proceedings pending PTO reexamination)