A part of the legal battle between fitness tracker makers Fitbit and Jawbone has been resolved, with the latter revealing that Fitbit has dropped the patent case that seeks to block the entry of Jawbone products into the United States.
The news comes just before Christmas, and some might think that Fitbit is giving a gift to Jawbone with the move. However, the dropped complaint is not as jovial as it looks.
Fitbit And Jawbone Legal Battle
Fitbit has withdrawn its year-old patent complaint that was filed with the U.S. International Trade Commission, a government organization that has the authority to block products from being imported into the country.
In May 2015, Jawbone filed charges against Fitbit that accused its rival fitness tracker maker of systematically plundering trade secrets by poaching employees. The former Jawbone workers were said to have downloaded confidential information from Jawbone's systems before they left the company to transfer to Fitbit.
In August, a judge for the USITC ruled that Fitbit did not steal trade secrets from Jawbone, a decision that was welcomed by Fitbit CEO James Park. Park added that the claims made by Jawbone were nothing more than an attempt to throw off Fitbit's momentum.
Jawbone, however, said that it will be looking to have the ruling reviewed.
Why Did Fitbit Withdraw Its Complaint Against Jawbone?
If Fitbit were to be victorious in its counterclaim against Jawbone, Jawbone would have ended all sales of its wearable devices. With Fitbit withdrawing its complaint, Jawbone would be safe from such an outcome.
However, the reason behind Fitbit's decision to drop its legal challenge against Jawbone is the fact that its rival is currently in a heavy financial struggle. In fact, because of massive money problems, Jawbone has already stopped selling its fitness trackers through its website.
"SEC filings of one of its biggest investors now value Jawbone shares as worth nothing, as well as indicate that Jawbone has filed for bankruptcy or is in default," Fitbit noted.
Jawbone has not dismissed the case, nor is Fitbit giving its rival a Christmas gift. With Jawbone effectively on its way out of the industry, Fitbit apparently decided that it was no longer worth it to pursue legal action against its rival. Fitbit is currently busy with its acquisition of another rival, as the company recently purchased Pebble for up to $40 million.
Jawbone, however, will still pursue the trade secret case that it filed last year against Fitbit, the final outcome of which still remains largely unknown.