In just a short two months, Jawbone has filed not one or two, but three lawsuits against its top competitor, San Francisco-based Fitbit. The final legal complaint, which Jawbone filed with the International Trade Commission (ITC) at the beginning of July, demands that Fitbit stop importing its own parts and assembled devices. The lawsuit seeks a ruling within fifteen months and a cease-and-desist, which Jawbone wants as soon as possible. A cease-and-desist may cause considerable damage to Fitbit. This complaint correlates to the lawsuit Jawbone filed with the U.S. District Court last month, which implicates Fitbit of patent infringement in relation with its health trackers.
In May and June of this year, Jawbone filed the first two lawsuits against Fitbit, alleging that Fitbit illegally acquired business secrets when they poached Jawbone's former employees. Jawbone, a privately-held consumer technology and fitness tracker company, filed the complaints in San Francisco Superior Court and also in the United States District Court for the Northern District of California.
Jawbone, a successful electronic maker that has built a thriving business on its UP range of fitness trackers, notified its business nemesis last month that it would elevate its complaint to the ITC. On the other hand, Fitbit, which sells products such as the Charge and the Flex, denies all of Jawbone's accusations. Fitbit issued a statement last month, claiming that the company did not know of any Jawbone business secrets in its possession and that they will adamantly oppose all of Jawbone's allegations against them.
Just a month ago, Fitbit landed on the New York Stock Exchange and closed its stock on its first day at $29.68. Fitbit's stock has been increasing ever since, and closed a week ago at $41.74. Last year, Fitbit earned $745 million in revenue, with $132 million in profit. In contrast, Jawbone is rumoured to be struggling financially, with a long delay with shipping the Jawbone UP3 and $300 million of new funding that may be sorely needed.
With these amounts at play, it's easy to understand why the health tracker market has become so intensely competitive over the last few years. Fitbit and Jawbone are simply fighting for a piece of this lucrative market. And there is still potential for growth: some analysts predict that the wearables industry could reach a net work of $12 billion in just three years.