Updated with comment from Jawbone.
Fitbit (NYSE:FIT) yesterday beat rival Jawbone‘s accusations that it stole trade secrets for its wearable fitness tracking device when a judge for the U.S. International Trade Commission ruled that there were no violations of the Tariff Act because “no party has been shown to have misappropriated any trade secret.”
The decision by Judge Dee Lord spikes Jawbone’s attempt to block imports of the Fitbit devices, part of its ITC complaint alleging that Fitbit infringes 6 of its patents and poached workers who brought confidential data with them when they jumped ship – including plans, supply chains and technical details.
But Jawbone withdrew 2 of the patents and Lord ruled the remaining 4 invalid ahead of a May trial on the trade secret accusations.
“From the outset of this litigation, we have maintained that Jawbone’s allegations were utterly without merit and nothing more than a desperate attempt by Jawbone to disrupt Fitbit’s momentum to compensate for their own lack of success in the market,” Fitbit CEO James Park said in prepared remarks.
Jawbone said it plans to appeal the decision and will pursue a larger trade secret case against Fitbit in the coming months.
“We intend to seek review of today’s ruling before the full Commission. The case in the ITC involved a very small subset of Jawbone’s trade secrets asserted against Flextronics and Fitbit because of the limited jurisdiction of the ITC. Jawbone is continuing to pursue its much broader trade secret case against Fitbit, which is headed to a jury trial in California state court. The California court already has granted a preliminary injunction and rejected Fitbit’s efforts to dismiss the case. Jawbone is confident it will prevail when the full scope of its claims is heard by the jury,” a jawbone representative wrote to MassDevice.com
The news sent FIT shares up 2.8% today in pre-market trading, to their opening price of $15.30 apiece. The stock gained 2.2% in early trading, rising to $15.20 per share.
Fitbit’s win comes after a loss last month in an ITC complaint it leveled against Jawbone, in which ITC Judge Thomas Pender invalidated a trio of Fitbit patents; Fitbit has asked the full commission to review that decision.
The companies are also sparring in state and federal court; Jawbone led with a trade secret violations case in California state court that’s still pending, as are patent infringement proceedings in federal court.
(Material from Reuters was used in this report).
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