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Jawbone leans over, whispers: Psst, guess who's in a criminal probe? Yes, it's Fitbit

Whatever, you're just a sore loser, Fitbit fires back

man in suit clutches briefcase full of cash. Photo by Shutterstock

The bitter battle between Fitbit and Jawbone has picked up again, with Jawbone claiming in its latest court filing that its rival is under criminal investigation.

Despite both companies seeing falling interest in their lines of wearables, they appear determined to drag each other down, with several contiguous lawsuits and wild accusations aplenty.

The latest – that Fitbit is under a secret criminal investigation for stealing trade secrets – came in a bumper pack of filings earlier this month. Fitbit for its part claims that the allegations have already been dealt with in an earlier investigation, which was also sparked by Jawbone.

In what has been an extraordinary back-and-forth of lawsuits and investigations into one another, Jawbone – through its corporate entity AliphCom – claims that Fitbit stole six of its employees, who brought with them valuable trade secrets.

In a 30-page filing [PDF], one of a dozen filed on the same day, Jawbone provides a detailed rundown of its "material facts" and Fitbit's responses. The best bits are, of course, redacted.

We just found em, guv, honest

Fitbit meanwhile says it never stole the trade secrets – which included product plans, consumer research, financial information and discussions with vendors – but that they were, by chance, discovered on a cloud storage system. It claims it immediately did the right thing and informed Jawbone.

On top of the numerous lawsuits between the two (we count six going back two years, but there may be others), there have also been two cases in front of the US International Trade Commission (ITC) and, Jawbone claims, a current grand jury probe run by the Justice Department.

Fitbit did not deny it is being investigated, but says that the claims being looked into are "based on the almost identical fictional allegations that were fully rejected by the International Trade Commission after a nine-day trial."

It also notes with some bitterness that those allegations were originally made on the eve of its IPO. "These allegations are without merit," it said in a statement, arguing that Jawbone was trying to pressure Fitbit in its civil case in San Francisco.

In short, there's no love lost between the two companies. And the battle between them is dragging them both down – Fitbit's share price has fallen to $5.81 from its IPO launch in June 2015 at $32.50. Its share price peaked the first month after going public but has been on a slow, steady decline ever since, as the market for wearable devices hasn't picked up despite Apple's high-profile entry.

Jawbone meanwhile has raised hundreds of millions of dollars in funding but has yet to turn a profit. It keeps its finances under wraps, which has led to years of speculation that it is on shaky ground.

As ever, the only people getting rich are the lawyers. ®


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