BodyMedia's patents, now owned by Jawbone, are at the heart of the new suit.
For the second time in less than a month, Jawbone is suing Fitbit in advance of the latter company's planned June 17th initial public offering. This time the allegation is patent infringement.
Jawbone is now suing Fitbit over alleged infringement of three patents Jawbone obtained when it purchased BodyMedia in 2013. Although Jawbone implied at the time it would keep BodyMedia intact, it ended up shuttering it within a few years of the acquisition, confirming for some that BodyMedia's extensive IP catalogue was the real impetus of the purchase.
The case concerns three patents: “General Health And Wellness Management Method And Apparatus For A Wellness Application Using Data From A Data-Capable Band,” a 2013 patent; “System For Detecting, Monitoring, And Reporting An Individual’s Physiological Or Contextual Status,” a patent from 2011; and “System For Monitoring And Managing Body Weight And Other Physiological Conditions Including Iterative And Personalized Planning, Intervention And Reporting Capability," a patent from 2013.
The suit also confirms that Jawbone acquired BodyMedia for more than $100 million. If Jawbone prevails, this suit could prove to be a return on that investment. Jawbone declined to comment, beyond providing MobiHealthNews with a copy of the suit.
"As the pioneer and leader in the connected health and fitness market, Fitbit has independently developed and delivered innovative product offerings to empower its customers to lead healthier, more active lives," Fitbit said in a statement. "Since its inception, Fitbit has more than 200 issued patents and patent applications in this area. Fitbit plans to vigorously defend itself against these allegations.”
This is the third overall lawsuit leveled against Fitbit since the fitness device company announced its IPO plans, and the second to come from competitor Jawbone.
Two weeks ago, Jawbone filed suit for misappropriation of trade secrets, breach of contract, and breach of implied covenant of good faith and fair dealing. In that suit, they alleged that Fitbit had poached five Jawbone employees and enticed them to steal information about the company's future plans on their way out the door.
A week before that, a California man filed a class action suit against Fitbit, alleging that the company’s sleep tracking is inaccurate and constitutes false advertising. Fitbit has vowed in statements to the press to fight both of these lawsuits.
Jawbone's pursuit of Fitbit comes at a time when not only is Fitbit gearing up to IPO -- seeking to raise $358 million for its own coffers, according to its latest SEC filing -- but Jawbone is rumored to be in some amount of financial trouble.
In early 2014, Jawbone was expecting to raise $250 million from investors affiliated with Rizvi Traverse, but according to a report from Fortune, this investment came up short, forcing Jawbone to “scramble yet again to raise new funds”. According to a May 2015 report in Bloomberg, this funding came in the form of a $300 million loan from BlackRock on fairly harsh terms -- it's secured by "Jawbone's current and future licenses, intellectual property, royalties, accounts receivable and revenue from IP or licenses".
In 2014, Jawbone’s contract manufacturer, Flextronics, also sued the company because Jawbone’s “perilous” financial position prevented the company from paying its $20 million tab. The suit settled quietly soon after.
