One of the most popular health trends today is the wearable health tracking device. Now, one fitness tracking company is suing another for allegedly strategically luring away employees in a deliberate attempt to steal trade secret information. Jawbone is suing its rival Fitbit in a lawsuit for trade secret misappropriation filed in a San Francisco court last week.
Facts Alleged in Complaint
According to the complaint filed by Jawbone, their company has created an “Up” line of activity trackers that can be worn around the wrist and measures a variety of health-related activities. Jawbone alleges that Fitbit, a rival fitness tracking company, contacted around thirty percent of Jawbone’s workforce earlier this year and hired at least five employees from the company for the specific purpose of gaining intimate knowledge about Jawbone’s corporate strategy.
Furthermore, the lawsuit alleges that these employees also copied internal Jawbone documents that detailed the company’s vital trade secrets. Information included documents regarding the company’s supply chain, product lineup, revenue, and product costs that were all given over to Fitbit. It claims that these employees all violated their confidentiality agreements and that the stolen files “are the "informational equivalent of a gold mine for Fitbit," because they provide Fitbit with "an intricate roadmap into the core of Jawbone's business."
The lawsuit claims that a forensic analysis of their former employees’ computers show that USB thumb drives were used in their final days with the company, allegedly to steal company information. In addition, Jawbone claims that one former employee called a meeting specifically to discuss the future of the company before defecting to Fitbit.
Response from Fitbit
This lawsuit was filed less than three weeks after Fitbit announced its filing for an initial public offering (IPO). It denies any wrongdoing or knowledge of trade secret appropriation from Jawbone and has stated that it plans to fight the lawsuit. “Fitbit has no need to take information from Jawbone or any other company. We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations."
Since its launch in 2007, Fitbit has become the number one producer of health and fitness tracking in the market. Sales increased by 142% last year to $745.4 million. Last year alone, Fitbit sold 11 million individual tracking devices and held 68% of the total market, up from 58% of the market the year before. Jawbone held only nineteen percent of the market in 2013, and its numbers are unknown for 2014.
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Trade secrets and intellectual property issues are some of the most hotly contested issues in court around the Silicon Valley area. Call or contact our firm today if you have questions regarding your company’s trade secrets or any other issue of intellectual property law. At Garcia & Gurney, A Law Corporation, we have skilled attorneys that have helped clients throughout Pleasanton, Alameda County, and the Tri-Valley area.