A California Superior Court ordered that Jawbone, San Francisco, allow Fitbit, San Francisco, access to confidential information its former employees are accused of misappropriating.
San Francisco Superior Court Judge Ernest Goldsmith issued the ruling Jan. 20 in the civil suit. Jawbone parent company Aliphcom Corp. accused defendants Fitbit, five employees and up to 10 yet-to-be-named individuals of stealing trade secrets in a May 2015 complaint filed with the court. The five former employees that Jawbone accused Fitbit of poaching returned 18,000 documents in October that were taken from Jawbone.
Wednesday's order directed Jawbone to create separate trade secret designations for each of the five employees designated as "confidential" for the trade secrets each defendant is accused of stealing. Any other trade secrets individual defendants are accused of stealing are allowed to remain under a "confidential information – outside attorneys' eyes only" designation.
In July 2015, the parties agreed to a protective order governing the disclosure of trade secrets being litigated in the case. The order provided either party the ability to designate documents or other materials with the outside attorneys' eyes only designation.
In October 2015, Jawbone served the defendants with an amended designation of trade secrets. The amended designation includes confidential information and trade secrets of strategic business information ranging from data and insights derived from customer experience research to product blueprints.
In November 2015, Fitbit filed a motion to modify the protective order and requested access to the information in the amended designation for discovery, calling Jawbone's designation "overbroad."
Jawbone opposed Fitbit's motion in a December 2015 filing, with Jawbone's lawyers arguing it brought the litigation to prevent the defendants from continuing to use and access Jawbone's confidential information and trade secrets to gain competitive advantage. Jawbone claimed Fitbit's assertion that access to trade secret designated court documents to defend the case was "pure pretext."
“We need to prevent any additional competitive harm from happening," attorney Richard Schwartz argued, according to Law360.com.
Goldsmith disagreed and said the information "has to come out," according to Law360.com.
Wednesday's order was the latest action in the ongoing legal battles between the two wearable fitness tracker manufacturers.
Jawbone filed a complaint with the United States International Trade Commission (ITC) in July 2015 seeking to block Fitbit from importing its devices or its parts.
Jawbone's June 2015 lawsuit, which was filed ahead of Fitbit's initial public offering, in U.S. District Court in California alleging patent infringement was stayed pending the resolution of litigation before the ITC. The request from Jawbone to stay the case was granted by the court on Dec. 30, 2015.
In September 2015, Fitbit sued Jawbone and subsidiary BodyMedia in Delaware District Court alleging patent infringement. Jawbone answered that suit with a countersuit calling Fitbit's allegations a "frivolous" misuse of Fitbit patents.
Fitbit, which appeared to be a popular gift on Christmas, reported revenue of $409.3 million in the third quarter of 2015. Fitbit maintained its No. 1 position in the worldwide wearables market on the strength of its Charge and Surge models in the third quarter with 4.7 million unit shipments and a 22.2 percent market share. The company took aim at the Apple Watch when it revealed the new Fitbit Blaze at the Consumer Electronics Show earlier this month.
Last week, Jawbone raised $165 million in new funding, and President Sameer Samat left to rejoin Google, according to a re/code report.