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Jawbone sues Fitbit and ex-employees for stealing its biggest secrets

Jawbone sues Fitbit and ex-employees for stealing its biggest secrets


Jawbone says Fitbit made off with its "playbook for the future"

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Jawbone is taking rival fitness accessory manufacturer Fitbit to court, accusing the company of "systematically plundering Jawbone employees" and making off with Jawbone's own "critical trade secrets and intellectual property." The full complaint, filed with San Francisco's Superior Court, attempts to paint Fitbit as a company that, even as it heads for an IPO on Wall Street, lacks any real direction or forward roadmap. Jawbone says that Fitbit's recruiters have relentlessly tried to poach its workers to help keep the business on track.

In a statement, Fitbit contested Jawbone's claims, saying that it has "no need" to steal information. The company says, "We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations."

This year alone, Fitbit is accused of contacting 30 percent of Jawbone's workforce. Five employees were ultimately swayed to join Fitbit, "each of them bringing along access to, and intimate knowledge of, key aspects of Jawbone’s business and the future direction of the market and its business." Those five individuals are also named as defendants in the case for violating Jawbone's confidentiality agreements and engaging in unfair business practices.

Jawbone accuses Fitbit of stealing its employees to compensate for a lack of direction

Jawbone doesn't mince words in the complaint, blasting Fitbit and the employees who switched sides for colluding to give Fitbit an unfair advantage over its chief competitor in the fitness tracker market. Jawbone says that the five employees each downloaded highly secret files to personal USB thumb drives and emailed other sensitive documents to personal email addresses. All of this supposedly happened after they'd already accepted positions at Fitbit but before the five employees alerted Jawbone of the situation. Jawbone says they basically gave its "Playbook for the Future" to the company's greatest rival.

The stolen files are the informational equivalent of a gold mine for Fitbit, as they provide an intricate roadmap into the core of Jawbone’s business, including such information as Jawbone’s supply chain, gross margins, product lineup (both current and future), product target costs, vendor contacts, product analysis, market trends and predictions, and the future direction of Fitbit’s main competitor.

Jawbone says it has suffered "monetary, competitive, and irreparable harm" as a direct result of the scheming. It's seeking compensatory and punitive damages against Fitbit and the five ex-employees, and also wants the court to stop Fitbit from benefitting from the "plundered" trade secrets that should have never changed hands. It's worth noting that Fitbit remains in a quiet period ahead of its IPO, which could make a direct response challenging for the company at this time. For its part, Jawbone is coming off the release of two new fitness trackers: the $99 Up2 and the company's flagship Up3. The latter device has received generally poor reviews.

Update May 28th, 8:05AM ET: This story has been updated to include a statement from Fitbit.