Fitbit Inc (NYSE:FIT) has once again foiled its rival Jawbone’s plans for a legal takedown, with Fitbit besting Jawbone in the latest ruling by U.S. International Trade Commission Administrative Law Judge Sandra Dee Lord.
Jawbone aimed to block the fitness tracking titan’s products to the United States, alleging trade secrets had been stolen. The claim argued that the FIT team had “poached” Jawbone employees in a manipulated move to extract confidential knowledge. Yet, along with six counts of patent infringement, all invalidated by this past April, Judge Dee Lord has now dismissed Jawbone’s last accusation left standing.
As Judge Dee Lord’s ruling reads, “[N]o party has been shown to have misappropriated any trade secret,” granting Fitbit freedom to continue importing its devices from overseas and selling them in the United States.
Fitbit co-founder and CEO James Park relished the news with triumph. As Park asserted in a statement to Business Insider, “From the outset of this litigation, we have maintained that Jawbone’s allegations were utterly without merit and nothing more than a desperate attempt by Jawbone to disrupt Fitbit’s momentum to compensate for their own lack of success in the market.”
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According to research firm IDC, Fitbit reigns as top champion in the world of popular wearable-device makers, capturing almost 25% global market share at the end of the first quarter of 2016 and shipping 5.7 million devices by the second quarter. Worthy of note, compare Fitbit’s stellar numbers to its disgruntled competitor Jawbone, whose market share did not even make it on IDC’s top five list.
Especially in recent years, Fitbit has soared past its adversary to become the indisputable leader of the market, leaving Jawbone in its dust, crushing under the weight of FIT success. Jawbone CEO Hosain Rahman has therefore had all the incentive to rely on this ITC decision to try to finally stall the competition. If FitBit would be banned from importing products, which would have been a real hit during the upcoming holiday season, Jawbone could carve a space in the market for itself- a loophole win-by-default at its most strategic.
Considering that according to a Business Insider source, Jawbone has failed to release a single new fitness tracker since the spring of 2015, over a year ago now, and has sold inventory to a third-party reseller, Jawbone had a lot riding on the ITC decision. Recode notes that in January, Jawbone had already raised funding of $165 million at approximately half of its prior valuation. Note that Jawbone’s president Sameer Samat, hired less than a year ago from Google, has already fled back to Alphabet Inc quarters in the wake of Jawbone’s messy legal debacles and fallen success.
Clearly, the chips have not fallen in Jawbone’s favor, with a madcap gamble now leaving the fallen fitness tracking giant in a messy scramble.
Jawbone intends to counter this ruling, asserting in state court its staunch pursuit to continue its “much broader trade secret case,” declaring in a statement that the company remains “confident it will prevail when the full scope of its claims is heard by the jury.”