Consumer Fitness Wearables Have Their Day in Court

With its slice of the wearable fitness monitor market negligible, Jawbone sold its entire inventory of consumer wearables to a third party last May in preparation for a shift to clinical-grade products. Now, it has accused Fitbit, its former competitor in the consumer space, of stealing trade secrets. A hearing on the case is scheduled for today in a California Superior Court in San Francisco

Former employees of Jawbone also appear in the court filing, made earlier this month. Fitbit, which has lost half of its stock value over the last year according to Bloomberg, is under grand jury investigation by the Justice Department and the Department of Homeland Security as it pertains to the case.

Jawbone, a company launched in 1999, was among the first to enter what is an increasingly crowded market of small, typically wrist-worn devices that keep consumers informed on their vitals. Fitbit is the largest player on the field, holding over a quarter of the market, with Apple (thanks to their integrated Watch device) and Chinese company Xiaomi following behind.

The allegation is that former employees of Jawbone brought hundreds of thousands of the company’s files over to Fitbit when they began working for the competitor. Fitbit denies the allegations, calling them “fictional” and claiming that the files were discovered on a cloud backup and turned back over to Jawbone.

The International Trade Commission previously rejected the case based on the merits of the allegations, and Fitbit dropped an ITC case of its own against its former competitor in December.