Fitbit Slapped With Lawsuit Ahead Of IPO

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Wearable market heats up with coincidentally timed lawsuit between rival fitness tracker makers

The wearable market is widely tipped to explode and the relationship between two makers of fitness trackers has done just that.

Fitbit has been slapped with a lawsuit by rival Jawbone, just ahead of its initial public offering (IPO), which would be the first for the wearable technology market.

Stealing Data?

Jawbone has accused FitBit of “systematically plundering” staff and critical trade secrets. At the start of this year Fitbit recruiters contacted a third of Jawbone’s employees and hired at least five people.

It is alleged in the Jawbone complaint that some of poached staff used USB thumb drives to steal proprietary information as they left.

“This case arises out of the clandestine efforts of Fitbit to steal talent, trade secrets and intellectual property from its chief competitor,” lawyers for Jawbone wrote in the complaint. They alleged that the former staff downloaded information such as Jawbone’s current and future business plans and products.

Court-lawsuit-gavel-largeFitbit’s actions in the case “bear the hallmarks of a carefully orchestrated plan to abscond with reams of proprietary and confidential information regarding the intricacies of Jawbone’s business and the future direction of the market,” Jawbone alleged in its complaint.

“As the pioneer and leader in the connected health and fitness market, Fitbit has no need to take information from Jawbone or any other company,” Fitbit was quoted by the New York Times as saying in a statement.

“Since Fitbit’s start in 2007, our employees have developed and delivered innovative product offerings to empower our customers to lead healthier, more active lives,” said Fitbit. “We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations.”

Happy Timing?

Some may view the timing of the lawsuit as a little coincidentally, coming just as Fitbit plans an IPO.

There is little doubt that wearable tech market is heating up, with a number of active players including Apple, Microsoft, Garmin, and Samsung all competing in the market.

Earlier this month, data from analyst firm Canalys found that sales of wearable bands rose 150 percent throughout the last year, with this growth set to continue following the recent launch of the Apple Watch.

Figures released by IDC earlier this year estimated that 45.7m wearable devices will be sold this year, up 133.4 percent from last year’s figure, as the release of the Apple Watch and other devices push up sales.

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Author: Tom Jowitt
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