Jawbone and Fitbit are two of the biggest names in the wearable industry, so the fact that one is suing the other is rather big news. According to court documents filed in San Francisco, Jawbone is taking Fitbit to task over what it claims was a “systematic plundering,” of its ideas, intellectual property and trade secrets by Fitbit employees. On top of covert investigations, Jawbone alleges that Fitbit recruiters stole away as many as 30 per cent of the company’s employees by targeting them with offers too good to refuse.
While an isolated incident of jumping ship to a rival firm might be explainable, a systematic hiring spree of competitor staff is a bit of a corporate no-no. However what really stands the chance of getting a judges attention, is that as the employees moved firms, its alleged that they took a number of trade secrets with them, by copying data and future business plans from Jawbone computer systems before leaving.
According to one quoted Fitbit recruiter, its plan wasn’t even necessarily to make a great new product, but to “decimate,” Jawbone by plundering its secrets and staff at the same time, according to PcWorld. Marty Reaume, Fitbit’s chief people officer, is also said to have telephoned her opposite number at Jawbone and admitted the poaching of employees, but said that there was no nefarious scheme behind it.
Jawbone has now asked the judge to not only provide financial compensation for what it describes as stolen secrets and employees, but it also wants a block order put in place to prevent it from using the information garnered during the employee exodus.
We may not know what the result of this suit is for some time, though its initiative may be a bit of a payback from Jawbone, as Fitbit is currently preparing to go public. A lawsuit is unlikely to instil confidence in potential buyers. Before this news it was set to do rather well, since its latest earnings reports were strong and it currently controls nearly 70 per cent of the fitness band industry in the US, with some 10.9 million devices sold in 2014. That’s up from just 4.5 million sold in 2013.