Two of the most prominent manufacturers of portable fitness trackers—Fitbit Inc. and AliphCom (the maker of Jawbone)—are engaged in no fewer than six separate litigations pending in state court, federal court, and before the U.S. International Trade Commission. Last week, the litigations took an antitrust turn when Jawbone countersued, Fitbit in the Northern District of California for monopolization in violation of Section 2 of the Sherman Act.
Jawbone alleges that FitBit has used two kinds of anticompetitive tactics to impede competition and to preserve its dominant position (85% market share) in the fitness-tracker market. First, Jawbone claims that Fitbit filed two separate sham patent litigations against Jawbone. According to Jawbone, the only reason to file separate lawsuits challenging Jawbone’s patents in the Northern District of California and in the District of Delaware is to harass Jawbone.
Second, Jawbone alleges that Fitbit stole its trade secrets and hired away Jawbone’s key employees. What makes Jawbone’s antitrust counterclaim more interesting than the run-of-the-mill pleading is that a different court has already found that Jawbone’s corporate espionage allegations have some merit. On October 13, 2015, the California Superior Court granted Jawbone’s request for a preliminary injunction and ordered five former Jawbone employees to return the data that they purportedly stole when they left Jawbone for Fitbit. At least one news media outlet reported that Jawbone became alarmed by these employees’ departures after it discovered that their laptops contained “cleaning” software that was meant to hide the downloading of company files.
But even if these employees’ actions amount to the theft of trade secrets, will Jawbone’s antitrust counterclaim stand up to Twombly scrutiny?