On the eve of the exercise and fitness technology company Fitbit's Initial Public Offering its smaller rival, Jawbone, has accused the fitness and health tracking device maker of poaching employees who took with them trade secrets and commercially sensitive information costing it "hundreds of millions of dollars".
Earlier this month Fitbit launched its first share sale in which it hopes to raise at least $100m (£65m). The company plans to list shares on the NYSE. Jawbone itself recently obtained $300m in debt from BlackRock after a protracted search for funding.
The suit filed in San Francisco, California, accuses Fitbit of poaching Jawbone staff, stealing intellectual property and confidential trade data.
According to the papers former Jawbone staff used USB storage devices to take data to Fitbit.
Jawbone's lawsuit names Fitbit and five former Jawbone employees. Jawbone also believes 10 other former staff were involved. The case filed against Fitbit alleges that: "This case arises out of the clandestine efforts of Fitbit to steal talent, trade secrets and intellectual property from its chief competitor, Jawbone."
It further alleges that a recruiter from Fitbit contacted Jawbone staff with a view to recruiting them from Jawbone to Fitbit. The case quotes a Fitbit recruiter as stating that its objective was to "decimate" Jawbone by contacting an estimated 30% of its staff since the beginning of the year.
Jawbone argues the staff moves caused "substantial and in many respects irreparable harm", running into "hundreds of millions of dollars" in damages.
Fitbit does not take the allegation lying down stating that: "As the pioneer and leader in the connected health and fitness market, Fitbit has no need to take information from Jawbone or any other company."
"We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations," it added.
Jawbone is seeking compensation wants to prevent former employees from disclosing any other commercially sensitive information.
Fitbit is no stranger to fighting allegations in the courts and Jawbone's suit follows a legal challenge made last year by a large number of consumers who filed lawsuits against it relating to its recall of its 'Force' wristband, which caused irritation to the skin of some customers.
If any of the points raised above strike a chord we are experts in dealing with matters relating to employees and confidential information (see, for example, the recent case of Personal Group v Brakes, Gee 7 and another in which we represented the successful Claimant) and can help on 0191 281 4000 or email@example.com: Case Law, Digital/Tech, News