Jawbone doubles down on its allegations against Fitbit

Next Story

Local deals site LivingSocial lays off 280, over 50% of staff, outsources customer services

For nearly a year Jawbone and Fitbit have been in the courts and Jawbone just threw down new allegations. In a motion to amend the original filing, Jawbone wants to add a new defendant to the case that formerly worked at Jawbone but defected to Fitbit, bringing a host of confidential information along with her. Jawbone also now contends that this person, along with previously named defendants, lied under oath that they had returned all confidential Jawbone information prior to leaving the company.

Jawbone says, that without these files and former employees, Fitbit’s latest products wouldn’t offer nearly as many features or design elements.

Last May, Jawbone brought a suit against Fitbit recruiting employees who plundered confidential information on their way out. Then, just a week prior to Fitbit’s IPO in late May 2015, Jawbone filled another suit against Fitbit regarding patent infringements. Fitbit fired back in September and October with three separate patent infringement cases and lodged a complaint with the International Trade Commission.

Now, some ten months later, the companies are still at it, and Jawbone has updated its filling to include new information and context surrounding the new products released by Fitbit.

Jawbone’s updates contends that Fitbit’s latest products contain “hallmarks of Jawbone’s proprietary technology, and thereby indicate that Jawbone’s trade secrets have already been put to use by [Fitbit]”

The court filing gives the following examples:

  • “FitBit has recently begun to offer automatic activity detection on its products, which is a staple of Jawbone’s leading technology”
  • “As numerous experts in the wearable space have already remarked, Fitbit’s new “Alta” product bears a striking resemblance to Jawbone’s UP products – not only in appearance and design but also in terms of its features.”

Jawbone contends that only after poaching the former Jawbone employees named in this case, did Fitbit start to appreciate that fitness trackers need a more complete understanding of the user and the company would have to develop different more sophisticated sensors than what Fitbit was currently using to gather this additional information.

Indeed, whether by coincidence or not, Jawbone’s allegation matches the timeline of Fitbit’s product releases. Before announcing its latest products at the beginning of 2016, Fitbit was on a dry spell of sorts. The company had not announced a new product since October 2014, and it was over a year before that, in October 2013, had Fitbit announced the Fitbit Force, which was eventually recalled.

The lawsuit indicates that Fitbit started recruiting Fitbit employees in early 2015, eventually getting some to switch teams several months later. Fitbit’s next products would then be announced some eight months later.

In the updated filling, Jawbone names a new defendant in the case. Weiden had access to the “precise confidential information and trade secrets developed by Jawbone that Fitbit sought to obtain.” Specifically, prototypes of an unreleased fitness tracker product including electrical and mechanical designs and costs along with the design schematics for Jawbone’s custom printed circuit boards, the material used in constructions, and manufacturer’ yield rates, lead times, timetables and schedules.

Jawbone alleges that several of the employees Fitbit successfully recruited kept confidential Jawbone information. The defendants certified that they had in fact returned all the confidential information prior to leaving Jawbone, but later, according to the recent filling made by Jawbone, through a court ordered forensic analysis, the defendants still had procession of no fewer than 335,191 additional files containing or constituting confidential Jawbone information in USB storage devices, external hard drives, smartphones, cloud storage account and personal email accounts.

In the case of Jing Qi Weiden, Jawbone says, she emailed confidential documents from her Jawbone email account to her new Fitbit account.

Fitbit’s legal counsel points out that they already revealed the additional files back in December, and Jawbone is attempting to spin the situation away from what is actually happening. The firm’s full statement on this matter is below.

Here is a brief timeline of the events as they’ve unfolded between Jawbone and Fitbit:

  • Just as Fitbit was preparing for its IPO, Jawbone sued Fitbit, alleging that ex-Jawbone employees recruited by Fitbit had taken and were sharing confidential information from their previous employer — some 18,000 pieces of data in all. Fitbit denies the claims.
  • Now long after that — weeks, in fact — Jawbone sued Fitbit again, this time over patent infringement. Jawbone accused Fibit of infringing on a patent for “a wellness application using data from a data-capable band,” according to a write-up in the WSJ. “Jawbone said it has spent more than $100 million on research and development and has hundreds of patents.” The patents in question in this case actually also came from a Jawbone acquisition of a company called BodyMedia in 2013 for around $100 million, and potentially apply to nearly all of Fitbit’s products.
  • Then, again just weeks later, Jawbone filed a complaint with the International Trade Commission, requesting an injunction on Fitbit imports claiming infringement of six Jawbone patents. The suit, which the ITC began to investigate in August, also cites the first case involving employees stealing trade secrets. Flextronics, which makes Fitbit devices, was also named in the ITC complaint.
  • Fitbit then fought back, filing a patent suit against Jawbone in September. This one covered five different UP devices and their accompanying software and user interface. Fitbit says it owns some 200 patents and is clearly prepared to use them to defend itself.
  • Meanwhile, the case over trade secrets continues in increments. The latest is that judges have ordered five Fitbit employees to hand over any Jawbone data they have kept.
  • Finally, Jawbone’s latest — this counterclaim — is in response to Fitbit’s patent suit but is also being used by the company as a platform for refreshing our attention on its wider list of complaints, which it says it continues to pursue:

    “The antitrust counterclaim filed by Jawbone in one of the pending Fitbit patent suits outlines how Fitbit’s recent patent cases against Jawbone are baseless and filed to thwart competition. The counterclaim also highlights Fitbit’s campaign to misappropriate Jawbone’s most important assets – intellectual property and trade secrets – as part of its unfair competition,” the company said in a statement. “Jawbone is determined to move forward with the anti-trust case, its trade secret case in California Superior Court and its International Trade Commission Complaint for which a hearing is scheduled for May 9, 2016. Jawbone believes that when all of the evidence is weighed, the remedies and damages Jawbone is seeking will be granted – including, in the ITC matter, the injunction to prevent virtually all of Fitbit’s wearable products from being imported into the United States.”

  • In early March 2016, an ITC judge ruled that two Jawbone patents covered ineligible subject matter under the Supreme Court’s Alice decision.

Fitbit’s statement

Jawbone’s latest attempt to bring additional baseless trade secret claims comes on the heels of it suffering another defeat in its similarly meritless patent litigation against Fitbit at the ITC.  Recently, the ITC judge ruled that two of Jawbone’s patents are ineligible under case law settled by the U.S. Supreme Court, and only two of its original six patents remain at issue in that case.  We believe Jawbone’s latest request to file yet another amended complaint indicates desperation due to its inability to compete in the market and its setbacks at the ITC.  Just like the other claims asserted in this litigation, the additional claims Jawbone seeks to assert are unsubstantiated and based on gross mischaracterizations of the events that occurred months ago.

Further, there is no evidence or allegation that Fitbit ever had access to the additional files Jawbone cites in its motion.

 

Additional reporting by Ingrid Lunden.