Jawbone Suing Rival Fitbit on Eve of IPO

jawbone up fitness trackerFitness tracker manufacturer Jawbone is suing rival firm Fitbit, alleging that Fitbit drew Jawbone employees away from the company and got them to download confidential information before they left in an effort to steal Jawbones designs.

The lawsuit, filed in California State Court on Wednesday, alleges that earlier this year, Fitbit recruiters actively tried to poach Jawbone employees, with those who left downloading files onto thumb drives before leaving in a process Jawbone describes as “systematically plundering”.

“This case arises out of the clandestine efforts of Fitbit to steal talent, trade secrets and intellectual property from its chief competitor,” said Jawbones lawyers in the complaint. The suit goes on to cite several instances of Jawbone employees who handed in their resignation without indicating they were leaving to work for a rival company.

The lawsuit comes at a delicate time for Fitbit, which filed to go public earlier this month and is preparing for its IPO. The company has been growing quickly, with revenues increasing tenfold in the past two years, and net profits of $132m (£86m) recorded in 2014.

In contrast, Jawbone has struggled in recent years, delaying the launch of its latest Up3 model, and industry experts speculating that the $300m it raised in February wasnt equity investment but a loan with strict terms that will see BlackRock paid ahead of other investors.

According to the New York Times, Jawbone is seeking financial damages in the lawsuit, as well as a ruling that prevents ex-employees from making use of the information it alleges they took when they left.