Fitbit moves toward trial in Jawbone trade secrets theft case

Fitbit is headed toward a trial over claims it stole rival Jawbone’s trade secrets, after failing to persuade a judge to throw the case out.

A California state judge rejected Fitbit’s argument that the lawsuit is merely an attempt to rehash claims that were already analysed and rejected by the US International Trade Commission in Washington in October. The jurisdiction of the court is of a “much broader scope” than the trade agency, San Francisco Superior Court Judge Richard Ulmer said before issuing a final decision. The two pioneers in wearable activity trackers have been embroiled in legal battles since May 2015, when Jawbone accused Fitbit in a lawsuit of plundering employees and critical proprietary information.

Matt Larson, a litigation analyst for Bloomberg Intelligence, said the ruling will give Jawbone “another swing at trade secrets claims nearly identical to its failed ITC suit.” “Trial is still a long way off,” he said. “Absent an out-of-court settlement, the lawsuit will continue to be a distraction and pose headline risk for Fitbit.” Larson also said he wouldn’t be surprised if Fitbit tries to appeal Ulmer’s decision.

A spokesman for Fitbit declined to comment on the ruling.

Jawbone said it’s pleased the court didn’t let Fitbit escape liability for its conduct.

“We look forward now to focusing on presenting our case to a California jury, which will not be bound by the strict procedural limitations that we faced in the ITC,” a company spokesman said. “We will push the case to trial as quickly as possible and are confident that justice will be done."

Mark Reiter, a lawyer for Fitbit, argued at a hearing that Jawbone shouldn’t get a chance to retry its claims in state after first going to the International Trade Commission.