Fitbit and Jawbone Reach Settlement, End Litigation

After more than two years of legal battles, San Francisco-based Fitbit Inc. and Jawbone Inc. jointly announced on Dec. 8 that the companies had reached a settlement to resolve all litigation. The terms of the settlement were not disclosed.

"The terms of the agreement will remain confidential and both sides look forward to putting these disputes behind them," the media release said.

The announcement comes over a year after the United States International Trade Commission terminated its investigation into whether Fitbit and its manufacturer, Flextronics International Ltd., misappropriated trade secrets from Jawbone—now known as Jawbone Health.

In August 2016, Administrative Law Judge Sandra Dee Lord ruled that “no party has been shown to have misappropriated any trade secret.”

Litigation between the companies began in California state court in May 2015 when Jawbone alleged Fitbit had stolen its employees and intellectual property. A series of counterclaims followed.

Fitbit CEO James Park, in August 2016, called the ongoing litigation "a desperate attempt by Jawbone to disrupt Fitbit’s momentum to compensate for their own lack of success in the market.”

Fitbit has struggled financially since 2016, most recently reporting a net loss of $113.4 million in its 2017 third quarter revenue. Park has repeatedly called 2017 a transition year for the wearables manufacturer.

In a Dec. 8 Seeking Alpha article, analyst Larry Ramer speculated Samsung, Seoul, South Korea, "will either partner with and invest in or acquire Fitbit." He cited Samsung President Young Sohn's desire for the company to "make major acquisitions in several areas, including digital health."