On Wednesday 10 June, Jawbone hit Fitbit with a patent infringement suit alleging that Fitbit is infringing 3 of its US patents. Jawbone is seeking an injunction to stop Fitbit from selling its products in the US.
Both Jawbone and Fitbit are market leaders in the field of wearable fitness trackers and have both invested vast amounts of money in R&D, protecting this investment with patents. In fact, in a statement in the suit, Jawbone says it has spent more than $100million on R&D and has hundreds of patents. In a statement following the suit, Fitbit hit back saying it too had "independently developed and delivered innovative product offerings". Fitbit went on to say that it had more than 200 patents and patent applications of its own and that it would"vigorously defend itself against these allegations".
This terminology used by Fitbit in this statement may have a subtle undertone. In disputes like this, it is quite common for the company on the receiving end of an action to counter-sue for patent infringement. In other words, it is quite possible that Fitbit will hit back at Jawbone saying that Jawbone infringes some of Fitbit's patents and that they too are seeking an injunction to stop Jawbone selling their products. Both these companies clearly understand how to use their investment in patents in both an offensive and defence manner and so the wording of the statement suggests that a counter suit is at least on the table.
The timing of this suit is interesting. Two weeks ago, Jawbone launched another action in the US alleging that Fitbit enticed away five Jawbone employees and stole trade secrets (which is another form of intellectual property) from Jawbone.
Both of these suits have been brought as Fitbit is about to launch its first IPO. Launching an action like this against a company about to launch an IPO is not uncommon. This is for two main reasons. The first is because the uncertainty associated with a suit like this can negatively impact the IPO and secondly, after an IPO, companies tend to be cash rich meaning that they are wealthy targets.
In a remarkable prediction, Fitbit noted in its IPO filing in May that it operates in a "highly competitive" market and that "competition in [the] market will intensify in the future". Although Fitbit had remarkable foresight, even they may have been shocked at two separate lawsuits in two weeks.