Fitness wearables specialist Fitbit has today emerged clear of allegations that it used trade secrets stolen from rival Jawbone in its products.
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Jawbone also accused Fitbit of a number of other violations patent infringement as well as poaching its own employees. The verdict came on Tuesday, and it puts an end to Jawbone’s aims of getting an import ban against Fitbit’s products.
Separately, TheStreet Ratings team rates the stock as a “sell” with a ratings score of D.
Even though it’s not usually their thing, Fitbit fans can relax.
Fitbit said it was pleased with the judge’s findings. It was an attempt to block the company from importing its fitness trackers, or parts needed to manufacture fitness trackers. That being said, Jawbone is probably one of Fitbit’s more close competitors, which is why it wasn’t surprising to learn that Jawbone had sued Fitbit over alleged theft of its trade secrets.
But Jawbone withdrew 2 of the patents and Lord ruled the remaining 4 invalid ahead of a May trial on the trade secret accusations.
The company also has filed trade secret claims against Fitbit in state court in California.
The court ruled in favor of Fitbit by saying that there was no violation of the Tariff Act, which provides the commission the authority to block products which violate USA intellectual property.
“Jawbone is confident it will prevail when the full scope of its claims is heard by the jury”, the company said in a statement.
Jawbone is not only competing against arch-rivals Fitbit, the likes of Pebble, Samsung, LG, Microsoft and most importantly the Apple Watch, which became the best-selling wearable device with 4.2 million smartwatches shipped in 2015.
The patent case was dismissed in May in an entertaining decision by Judge Dee Lord, who dismissed the patents as overly broad based on a Supreme Court precedent, Alice v CSL Bank, that is being increasingly applied to patents in the digital health space.
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Despite the favorable ruling, Fitbit shares were trading $0.40 lower on Wednesday, at $14.82. Had Jawbone won even a temporary order, it could have severely disrupted the company’s ability effort to launch its next-generation activity trackers. It raised a new round of funding – $165 million – in January at about half its previous valuation: $1.65 billion versus its previous valuation of $3.3 billion, according to Recode. However, the company commented that it is working on a new product.
