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Health-tracking technology: the new patent battleground?

03-05-2016

The dispute between two leading providers of fitness trackers took another leap forward last week, after the US International Trade Commission (ITC)  invalidated the last of the patents that AliphCom Inc’s Jawbone claimed had been infringed by its rival Fitbit Inc.

Both companies produce wearable ‘fit tech’, technology that tracks physical activity, sleep and other health-related data, a segment of consumer electronics that is fast expanding and also includes rivals such as Garmin, Shine, Under Armour, Moov and the Apple Watch.

Jawbone filed the patent infringement in question against Fitbit in July 2015, requesting that US imports of its rival’s wearable devices be blocked. However, the Washington Court found against it, ruling that the patents in question – covering sleep monitoring and data output – “seek a monopoly on the abstract ideas of collecting and monitoring sleep and other health-related data, and are therefore ineligible.” The ruling is based on a US Supreme Court decision from 2014 that said companies can’t claim software patents for abstract ideas without inventive concepts. 

Jawbone plans to appeal the ruling, adding in a statement: “The two patents that are the subject of the ITC ruling represent only a portion of Jawbone’s case against Fitbit and a small subset of Jawbone’s overall patent portfolio.” Jawbone is also suing Fitbit for patent infringement in the federal court in San Francisco, where Fitbit is returning the favour by suing Jawbone for allegedly infringing its own patents.

Fair competition or industrial espionage?
The two companies are also due to meet again at the ITC on 9 May over claims that Fitbit allegedly stole other intangible assets belonging to Jawbone, including know-how and trade secrets. It has alleged that Fitbit targeted a number of Jawbone’s employees, ultimately hiring five and inducing them to bring thousands of Jawbone’s confidential digital files to Fitbit.

Trade secrets are a valuable form of intellectual property, but are often overlooked as a result of their intangible nature. However, trade secret law exists to protect confidential information from which its owner derives value as a result of keeping it secret: the recipes for Coca-Cola and Kentucky Fried Chicken are often cited examples.

To maintain the desired secrecy, employees generally have to sign extensive confidentiality agreements or employment agreements that contain such clauses. However, once these agreements have been signed, there is the question of enforcement: pursing claims of trade secret theft is notoriously costly and challenging to prove. High-profile disputes in this area include the famously messy battle between doll manufacturers Barbie and Bratz.

For more information on capturing and protecting trade secrets, contact our team.