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Chronicles

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Six current and former Fitbit employees have been charged in a federal indictment for possession of stolen trade secrets from now bankrupt rival Jawbone

The Fitbit and Jawbone trade secrets mess has been revived  —  US federal prosecutors charged six former and current Fitbit employees …

The Verge Shannon Liao

Context & Ripple Effects

This indictment is the criminal turn in a three-year legal war. Jawbone opened with a 2015 suit accusing Fitbit of systematically plundering confidential information by poaching employees who downloaded materials before leaving, then escalated with an ITC complaint seeking to block Fitbit tracker imports plus dueling patent suits and countersuits.

Fitbit appeared to have weathered the campaign when an ITC trade judge cleared it of stealing Jawbone's trade secrets in 2016 — but Jawbone has since gone bankrupt, and federal prosecutors have now revived the core allegation as a criminal matter against six individuals rather than a civil dispute between companies.

First-order effects

  • Six current and former Fitbit employees now face federal charges for possession of stolen trade secrets, shifting personal legal risk onto individuals the earlier civil cases never touched.
  • Fitbit, previously cleared at the ITC, is back in the defendant's seat by association — its hires from rivals become evidence in an active criminal case.

Second-order effects

  • Hardware companies competing for the same engineering talent face pressure to harden offboarding and onboarding IP checks, since the Jawbone playbook shows departed employees' downloads can surface years later as criminal charges.
  • Jawbone's bankruptcy estate gains fresh leverage: a criminal indictment validates claims that civil courts had stalled, strengthening any residual trade-secret positions the defunct company's assets carry.

Third-order effects

  • If prosecutors treat employee-carried files as a criminal matter rather than a private commercial dispute, talent-to-IP litigation becomes a standard escalation path in consumer hardware — raising the cost of acqui-hiring from direct competitors.
  • The case also shows trade-secret claims outliving the injured company itself, meaning bankruptcy no longer ends competitive legal exposure for the acquirer or the hired-away staff.

The trend: Wearable-industry talent wars are escalating from civil suits and import complaints into criminal prosecutions, with trade-secret liability surviving even the collapse of the company that owned the secrets.