(Updated) Jawbone Loses First Round On Whether Fitbit Stole Trade Secrets

A judge has cleared activity tracking device manufacturer, Fitbit, of stealing competitor Jawbone's trade secrets. The decision follows Jawbone's case against Fitbit, which started in July 2015, whereby Fitbit was accused of stealing Jawbone's secrets by infringing on six patents and poaching employees in part for their knowledge and awareness of Jawbone's plans, future devices and technologies. Jawbone was hoping to ban Fitbit's activity trackers under the Tariff Act but Judge Dee Lord, of the U.S. International Trade Commission, explained in the ruling that there has been no violation of the Tariff Act because "no party has been shown to have misappropriated any trade secret." As such, Jawbone's complaint has come to nothing: Fitbit is still able to sell its market leading activity trackers and the six patent infringements Jawbone claimed had been broken by Fitbit were either withdrawn (for two) or invalidated (the remaining four) in a trial back in May 2016.

The news that Jawbone's complaint has been rejected by a judge is the latest round in a number of legal battles between Fitbit and Jawbone, which have also been jostling for market position for some years now. Each company manufacturers a range of activity tracking wearable devices, which synchronize with a smartphone or tablet to a cloud-based system. Fitbit has gained the upper hand, perhaps because it has a broader portfolio of wearable devices from simple bracelets through to smartwatches: the company has become the world's leading activity tracking manufacturer. Jawbone's UP brand has been losing market share and is no longer one of the world's top five activity tracker companies. Fitbit's Chief Executive Officer, James Park, highlighted this in a statement explaining how Jawbone's allegations were false and an attempt "to disrupt Fitbit’s momentum to compensate for their own lack of success in the market."

Meanwhile in the courtroom, a patent infringement case by Fitbit against Jawbone was concluded in July when a judge ruled Fitbit's patents were invalid. At the time, Fitbit appealed by asking the full trade commission to review the ruling. Whilst it is important for businesses to actively defend their patents - because an undefended patent is essentially pointless - it is also important that the same business continues to do its day to day operations. In this case it does appear that Fitbit has been more successful than Jawbone, but of course Fitbit needs to keep its eyes on the market, which is evolving with both new entrants and how activity trackers are becoming more and more commonplace, which is encouraging some consumers to move towards smartwatches.

UPDATE: Jawbone has since provided the following statement:

We intend to seek review of today's ruling before the full Commission.  The case in the ITC involved a very small subset of Jawbone's trade secrets asserted against Flextronics and Fitbit because of the limited jurisdiction of the ITC.  Jawbone is continuing to pursue its much broader trade secret case against Fitbit, which is headed to a jury trial in California state court.   The California court already has granted a preliminary injunction and rejected Fitbit's efforts to dismiss the case.  Jawbone is confident it will prevail when the full scope of its claims is heard by the jury.

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David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.
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