Consumer electronics company Jawbone has filed a motion to amend its original complaint against rival Fitbit, requesting to adding another defendant. The original complaint alleged Fitbit had purposely poached Jawbone employees, who then engaged in a scheme to provide Fitbit with Jawbone’s trade secrets.
Fitbit has repeatedly denied the claims, stating the company would “vigorously defend itself against these allegations.”
The amended complaint filed on March 14 in the Superior Court of California asks the court to add former Jawbone-turned-Fitbit employee Jing Qi “Gee” Weiden to the complaint, which would bring the number of total defendants to six. It’s alleged Weiden sent emailed confidential Jawbone documents to her Fitbit (fit) employee email account, placing the confidential information on Fitbit's servers.
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The documents Weiden is accused of taking include details surrounding a “next-generation tracker.” Among the documents was proprietary information such as design schematics for circuit boards, material lists, cost breakdowns, price quotes, manufacturer yield rates, and lead times.
Additionally, the amended complaint claims former employees failed to hand over any and all Jawbone property after terminating employment at the company. In total, Fitbit employees returned 18,000 files to Jawbone when previously ordered by the court in Oct. 2015.
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However, Jawbone now claims the forensic experts found discovered 335,191 proprietary files that were not turned over.
“These stolen files are the informational equivalent of a gold mine for Fitbit, as they provide an intricate roadmap into the core of Jawbone’s business,” the complaint reads.
Fitbit says Jawbone’s claim it intentionally withheld the files is misleading. The files in question were part of a cloud-based computer backup service, and were overlooked by Fitbit’s forensic analyst. Once the company discovered the oversight, Jawbone was notified and Fitbit immediately returned the files. Currently, there is no evidence Fitbit accessed the contents of the backup.
Jawbone also states Fitbit has already implemented some of the company’s trade secrets in its products. Noting Fitbit’s recent rollout of its auto-activity tracking feature and the similar look and feature set of Fitbit’s upcoming Alta wearable to Jawbone’s own Up products.
A Fitbit spokesperson provided Fortune with the following statement:
"Jawbone’s latest attempt to bring additional baseless trade secret claims comes on the heels of it suffering another defeat in its similarly meritless patent litigation against Fitbit at the ITC. Recently, the ITC judge ruled that two of Jawbone’s patents are ineligible under case law settled by the U.S. Supreme Court, and only two of its original six patents remain at issue in that case. We believe Jawbone’s latest request to file yet another amended complaint indicates desperation due to its inability to compete in the market and its setbacks at the ITC. Just like the other claims asserted in this litigation, the additional claims Jawbone seeks to assert are unsubstantiated and based on gross mischaracterizations of the events that occurred months ago."
The ITC ruling referenced in Fitbit's statement came on March 3.
For more, read:
Jawbone: The trials of a 16-year-old can’t-miss startup
Fitbit may have a point regarding Jawbone’s timing. In the filing Jawbone states it was made aware of documents retained by Weiden in Jan. 2016. Around the same time, according to the filing, Jawbone "learned of the facts" surrounding documents that had not been returned to the company.
In its defense, Jawbone states the delay in filing the amendment was in order to fully investigate the facts.
This post was updated Mar. 16, 8:51 a.m. with more information surrounding the filing.
The new filing is embedded below: