Seven months after San Francisco-based Fitbit Inc. and Jawbone Inc. announced a joint settlement to resolve litigation regarding allegedly misappropriated trade secrets, U.S. prosecutors have charged six current and ex-employees of Fitbit with possessing trade secrets stolen from the rival brand.
Katherine Mogal, 52; Ana Rosario, 33; Patrick Narron, 41; Patricio Romano, 37; Rong Zhang, 45; and Jing Qi Weiden, 39, all worked for Jawbone for at least one year between May 2011 and April 2015 before accepting employment with Fitbit. They each possessed trade secrets after leaving Jawbone, according to a June 14 media release issued by the United States Department of Justice (DOJ). None of the intellectual property they possessed was incorporated into any existing Fitbit product or service, according to the DOJ.
"Intellectual property is the heart of innovation and economic development in Silicon Valley," Acting U.S. Attorney Alex G. Tse said in the release. "The theft of trade secrets violates federal law, stifles innovation, and injures the rightful owners of that intellectual property. This office, together with our law enforcement partners, is committed to protecting the intellectual property rights and economic security of this district."
The defendants are scheduled to appear on July 9 before Judge Virginia K. DeMarchi. If convicted, the defendants face a maximum sentence of 10 years imprisonment and each faces a fine of $250,000 per count of the possession of stolen trade secrets.
A Fitbit spokesperson provided the following statement to Club Industry: “In a trade secret misappropriation case brought by Jawbone in the International Trade Commission in 2016 that involved these same individuals, a federal administrative law judge during a nine-day trial on the merits found that no Jawbone trade secrets were misappropriated or used in any Fitbit product, feature or technology.”
On Dec. 8, 2017, Jawbone and Fitbit announced they were settling their years-long dispute over trade secrets. This was 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.
In August 2016, Administrative Law Judge Sandra Dee Lord ruled that “no party has been shown to have misappropriated any trade secret.”
Jawbone’s parent company, AliphCom, Inc., is no longer in business as of 2017. Jawbone co-founder and CEO Hosain Rahman since founded a new company called Jawbone Health.