Jawbone Files Countersuit Against Fitbit In “Frivolous” Patent Infringement Case

The war continues apace in the world of wearable fitness trackers. Jawbone — which makes fitness trackers, speakers and Bluetooth headsets — has filed a counterclaim against Fitbit in a patent infringement case brought by the latter company against its rival in September.

In the countersuit — embedded below along with Fitbit’s patent suit — Jawbone denies all Fitbit’s infringement allegations and calls the suit a “frivolous” misuse of Fitbit patents.

“Fitbit is knowingly and willfully misusing its patents as part of its efforts to protect its market power,” Jawbone writes in the counterclaim filed in the U.S. District Court for the Northern District of California. “Both in this case and in a concurrently filed case in Delaware, Fitbit alleges that Jawbone infringes three of its patents. The infringement allegations in both lawsuits are plainly meritless, and Fitbit had no reasonable basis for bringing either case.”

In a separate statement, Jawbone says it’s continuing to pursue three of its own prior legal actions against Fitbit over its own claims of patent infringement; stolen trade secrets; and an ITC injunction.

Fitbit has responded in kind, referring to Jawbone’s “misguided attempt for publicity” and “lack of performance”:

“We have been able to successfully compete in a competitive market by providing consumers with products they want at price points they find attractive,” a spokesperson said. “These allegations are unfounded, and yet another misguided attempt for publicity in order to deflect attention from Jawbone’s own lack of performance. Fitbit’s primary focus is and continues to be on delivering innovative products and services that empower people around the world to reach their health and fitness goals.”

The news comes on the same day that Fitbit is expected to report its quarterly earnings.

The legal actions underscore the ongoing acrimony between the companies in an already-crowded market that, in the lead up to the holiday sales season, is facing a fresh wave of competition from established brands like Apple with its Watch and Microsoft with its own Band.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.”

The market for wearable health tracking devices is still relatively young and nowhere near as ubiquitous as that of smartphones. For that reason, there is a lot to potentially play for here. But for all of them, there is also a gamble, since much bigger companies are only now moving into this area in ernest.

Today, Fitbit has a market cap of $8.4 billion and is one of the leaders in the area of fitness tracking wearables. Jawbone remains private, raising nearly $820 million from investors. But with $300 million of that coming in the form of backing from BlackRock, and some very long delays on its most recent devices, some have questioned the company’s current state of health.

Updated with response from Fitbit.