
Fitbit employees charged with stealing trade secrets from competitor Jawbone - burkhardtferep
https://www.mercurynews.com/2018/06/14/6-fitbit-employees-charged-with-stealing-trade-secrets-from-competitor-jawbone/
======
koolba
> Six current and former Fitbit employees were charged in a federal indictment
> Thursday filed in San Jose for allegedly being in possession of trade
> secrets stolen from competitor Jawbone, according to information from the
> Department of Justice.

Wht makes this a criminal matter as opposed to a civil one?

~~~
williamscales
Theft of trade secrets is a specific criminal offense: 18 U.S. Code § 1832 -
Theft of trade secrets
([https://www.law.cornell.edu/uscode/text/18/1832](https://www.law.cornell.edu/uscode/text/18/1832))

~~~
crispyambulance
It is a stretch. We're talking about a bunch of people in a failing company
going to work for a competitor so they can continue their careers. Happens all
the time and there's nothing wrong with it. Unfortunately, some aggressive
entity in Jawbone has gotten busy filing lawsuits, there was one in 2016
against the same people that failed.

I don't see what good it does NOW to go after these individuals criminally,
nor is there mention on who has been pushing this. Jawbone was liquidated in
2017. Who, actually, cares at this point? What do they stand to gain with
these charges?

~~~
pc86
> _What do they stand to gain with these charges?_

A federal prosecutor gets to beef up their numbers by getting some well paid
tech workers to settle out of court for a few years salary spread over a few
decades of payments.

------
russellbeattie
This is a BS attempt by Jawbone's management to screw over a former competitor
by going after their employees. As if any of these "trade secrets" are the
reason Jawbone is in liquidation. A federal indictment?? Are you kidding me?

I would bet the reason Jawbone went this route is because their lawyers
properly informed them that California's right to work laws would have a civil
case thrown out in no time. So now we have a bunch of feds involved who need
to reach their quarterly quota of prosecutions and these poor employees are
going to go broke defending themselves in court.

Everyone at Jawbone can seriously go to hell.

~~~
i_am_nomad
Not arguing with you, just sincerely asking: how can Jawbone control what the
DoJ does? They can claim a crime has been a committed, but that’s a long way
off from actual indictments getting handed down.

~~~
JumpCrisscross
> _how can Jawbone control what the DoJ does?_

This likely started with Jawbone complaining to the authorities and then co-
operating with the investigation. OP’s characterisation of these indictments
as “a BS attempt by Jawbone's management to screw over a former competitor”
would appear inchoate given the text of the indictments hasn’t yet been
released.

------
coldcode
If you steal materials (source code, diagrams, pictures, documents) it's theft
especially if you can prove it was removed. If you just go work for a
competitor and you know stuff (i.e. in your brain) how do you prove its theft?
As far as I know many employers employment agreements are hard to defend
especially in certain states. I once had an employer require me to sign a
contract stating I could not buy anything from any vendor they used. When I
pointed out they purchased things from Walmart did they mean I couldn't go to
Walmart any more? I signed it with this clause removed.

~~~
0xcafecafe
on a side note, relevant xkcd: [https://xkcd.com/294/](https://xkcd.com/294/)

------
passive
This is bizarre to me.

Xiaomi has been making fitness trackers that are dramatically better than
Fitbit's low-end for years:

    
    
      - 1/4-1/3 the price
      - 4x+ battery life
      - waterproof
      - more reliable, at least for me (my Flex required 2 replacements in 6 months)
    

I've been amazed that Fitbit has been able to succeed despite this. I assume
people really like the social aspects of the software, which Xiaomi doesn't
really do.

If Fitbit had to steal secrets to produce such an inferior product, how the
heck did Xiaomi do this? Did they kidnap people from Jawbone (or someone else)
and enslave them?

~~~
baybal2
>I've been amazed that Fitbit has been able to succeed despite this. I assume
people really like the social aspects of the software, which Xiaomi doesn't
really do.

Because it is a Chinese company, and thus, it is "uncool"

I think this is another exemplary case of Chinese company with a superior
product being greatly weighted down by its "Chineseness" in Western markets.

~~~
reaperducer
_> Because it is a Chinese company, and thus, it is "uncool"_

More like Xiaomi is a weird word to Western ears and eyes, while FitBit is
intuitive to pronounce and its rhyming is pleasant to the ears.

Marketing 101: Pick a name for your product that's easy for your customers.

~~~
baybal2
I think there is no shortage of Chinese brand dishing out sums in millions of
USDs to all kinds of top tier marketing consultancies just to discover that
"uncoolness" stigma keeps chasing them through rebrandings, regardless of how
much star CMOs they hire.

As for Xiaomi, they are quite frequent on pages of trendy journals there and
there with sponsored articles, yet if you ask an average reader if they even
noticed it, most will say no.

~~~
reaperducer
They just have to come up with a better brand. Outside of China, "Xiaomi" is
not an easy word.

There are innumerable examples of Japanese companies that changed their names
to make them easier to market. Panasonic, for example.

More recently out of Korea, look at the rebranding of Lucky Goldstar as simply
"LG." Worked wonders.

There are plenty of Chinese brands that are successful in the West. But they
are always brands that are appealing to the Western ear. Vizio. Element. TCL.
All better names than "Xiaomi."

------
mosselman
> The theft of trade secrets ... stifles innovation

If only there were an example of an industry where innovation thrives as a
result of sharing knowledge instead of keeping it secret.

~~~
tdb7893
Knowledge sharing is often good but stealing trade secrets isn't really the
same thing (just imagine a large corp stealing trade secrets from a startup
and you'll see how it could stifle innovation)

~~~
mosselman
My point was that if you look at the world of IT, you see that a lot of
knowledge is shared and open sources. Looking at classical businesses you’d
think that sharing is a bad idea though. What I find stifles innovation is
keeping all sorts of knowledge locked up in big companies, how does that help
mankind?

~~~
tdb7893
Keeping all knowledge locked up would stifle innovation but not having trade
secrects at all would also stifle innovation. Even IT orgs need some of their
stuff to be proprietary sometimes

------
methodover
Do we know any details about what specific trade secrets were “stolen”?

This is legitimately scary to me. If I change jobs how do I know what the line
is between applying past experience and copying trade secrets?

~~~
bwilliams18
Did you copy files and take them with you? Or do you just remember things that
you then apply? If it's the latter you're __probably __safe.

~~~
mattnewton
Probably safe from a maximum of 10 years jail and 250k in fines is still scary
to me.

------
randyrand
The fact that this is a federal crime disappoints me. This really should be
civil.

------
projectramo
I cannot comment on this case (and yet, here I am typing) but I will say this:

I put up with the unreliable, fragile, jawbone up for years. I think I went
through about 5 or 6 models personally and got several for my family members.

Why?

Because it had, by far, the best sleep tracker of anyone on the market. I
could finally see how much sleep I got and it had a huge impact on me.

Fitbit has finally caught up about a year or so ago. (I was only tracking this
as a consumer so not sure exactly).

I would be very interested to know if the alleged theft was related to sleep
tracking. Specifically, if it was around figuring out when the user is in REM
sleep, deep sleep, light sleep or awake.

Everyone else could not break out REM sleep and deep sleep.

~~~
com2kid
> Everyone else could not break out REM sleep and deep sleep.

As someone who has worked with the engineers who implemented this on another
product, anything except for the most broadly defined categories is
exaggerating.

We worked with multiple sleep labs to do controlled sleep studies on people.
The way one of those sleep studies worked was a bunch of doctors looked over
all the charts of data that had been gathered, and then _voted_ on what type
of sleep the subject was getting at different points in time!

Give the same data set to a different set of doctors and you'll get a similar,
but somewhat different, result from their analysis.

With that in mind, it is not possible for a consumer grade wrist worn device
to give absolute results.

With just an accelerometer, you can get very broad categories, that are easily
confused with someone sitting very still while watching the entire LOTR
trilogy.

Add in a HR sensor and you can get some slightly better data.

Now not to say these results aren't good enough to be actionable. You'll
notice differences in the graphs for making healthy lifestyle changes, heck I
was able to see a before/after change on my data by skipping the after dinner
gin and tonic, so existing consumer sensors can detect stuff. But anyone
claiming whole lot of granularity is over stating their results.

(Unless the state of the art has vastly moved forward in... oh 2 years or so,
but given how messy all the sleep studies I saw were, I doubt it!)

~~~
projectramo
Very interesting.

I have noticed that my baseline REM (or should I call it “REM”) was different
for the two (Fitbit and Jawbone) but if it’s lower than baseline on either
device I feel dramatically worse than usual and if I get higher than usual REM
I feel better.

As you say, it’s detecting “stuff”

------
leongrado
I think the story probably went something like this:

1\. Fitbit steal hires Jawbone employees. 2\. Jawbone retaliates by charging
everyone who left Jawbone to join Fitbit for stealing trade secrets.

------
maym86
Never seen these NDAs actually be successfully prosecuted. There must have
been some emails or something where they were clearly sharing IP and leaving a
papertrail.

------
foobaw
I wonder what was actually stolen.

I hope this is not the reason why Jawbone is undergoing liquidation and Fitbit
IPOed.(I'm sure there are many more reasons, but it'd be shocking these stolen
trade secrets were contributing factors).

~~~
sulam
Jawbone has already sued Fitbit over this case I believe. That case was
settled:

[https://www.wareable.com/fitbit/jawbone-fitbit-legal-
dispute...](https://www.wareable.com/fitbit/jawbone-fitbit-legal-dispute-over-
settlement-4494)

~~~
brlewis
The settlement was regarding patents. From your link:

 _Last year a judge ruled in Fitbit 's favor, stating that "no party has been
shown to have misappropriated any trade secret." The fight rumbled on over
some patents, but now it's all over, as Fitbit announced in a statement._

~~~
sulam
It started as a trade secrets case that was dismissed and Jawbone tacked on
patents and that was settled. Full disclosure, I work at Fitbit. Since we are
not a party to this new case I can at least talk about the public info with
the old one!

------
iamleppert
Jawbone is going out of business because their really only mass-market success
story, Jambox, had its run and now the bluetooth speaker market is dominated
by better competitors.

Who would take anything from that company? Their software was basically
limited to utility apps and companion apps to the hardware. What did these
employee's take? The precious InstallShield firmware updater code? I hear they
finally fixed the issue with bricking their devices after a few years so that
code has to be super valuable..

------
Jerry2
Does anyone have a copy of the indictment by any chance? I can't find it
anywhere...

------
monocasa
What's the chance that we'll find out, even vaguely, what was allegedly
stolen?

------
sjg007
Is this an end run around the California law that non competes are
unenforceable?

------
RickJWagner
Wow, 10 years in jail!

Be careful, friends.

------
stealthmodeclan
This is probably the reason why most valuable employees are transferred to
Switzerland or United States or why big companies choose to develop IP in the
US.

Stealing your employer's trade secret can trigger federal investigation.

It's shocking how few employees know this.

Once I met employees who would copy over the propriety packages from their old
employers to their new employers just to save some time.

The other time i met employees who would develop a system the exact same way
as they had done at the previous employer.

This is probably the biggest risk which specialized employees do not recognize
while job hopping.

~~~
frant-hartm
> The other time i met employees who would develop a system the exact same way
> as they had done at the previous employer.

Ugh.. this is called experience, and it is why companies hire senior
developers

(Copying code is not acceptable, that I agree with..)

~~~
dm3
One would hope the new system would be improved over what was developed
previously, not copied from memory verbatim.

Snark aside, that's what non-compete agreements are for. I don't believe we've
reached the stage where employer can lay claim on your experience. If anyone
knows any good Sci-Fi exploring this theme, would be thankful for a pointer!

~~~
mdpopescu
Paycheck - I haven't read the book but, in the movie [1], the main character
has his memory wiped back to the initial state after working on trade secrets.

[1]
[https://en.wikipedia.org/wiki/Paycheck_(film)](https://en.wikipedia.org/wiki/Paycheck_\(film\))

------
jdright
What is the actual crime??? Changing jobs?

~~~
function_seven
No, possession of trade secrets. Article claims the investigation took two
years, so there's more to it than just changing jobs.

------
maym86
Curious why Google hasn't persued a criminal case against Levandowski for the
Otto/Uber IP theft?

~~~
solomatov
Google can't do that. It's a decision made by a federal prosecutor.

P.S. IANAL.

~~~
maym86
Interesting. How would the federal prosecutor have found out about these
people? Jawbone must have initiated in some way.

~~~
trhway
looks to be very similar story to Google/Lewandowski:

[http://fortune.com/2017/02/07/jawbone-says-criminal-grand-
ju...](http://fortune.com/2017/02/07/jawbone-says-criminal-grand-jury-
investigating-rival-fitbit/)

"In the California lawsuit, Jawbone has accused Fitbit of hiring away at least
five of its former employees, who it says brought with them hundreds of
thousands of confidential files when they joined in 2015."

Looks like it was a smart move for Lewandowski when he took the 5th. These
Jawbone/Fitbit employees seem to have chosen the other way:

[https://www.fool.com/investing/2016/07/15/jawbone-and-
fitbit...](https://www.fool.com/investing/2016/07/15/jawbone-and-fitbits-
lawsuit-everything-you-need-to.aspx)

"Fitbit says it never accessed any of the files in dispute, or used them for
any of its products. The Fitbit employees in question did turn over 18,000
files to the California Superior Court that belonged to Jawbone."

------
jjoonathan
Could they please steal some trade secrets to make their batteries last longer
than six months? Ugh.

------
tomglynch
According to this data from Statistica,
[https://i.imgur.com/Sbp9oCX.png](https://i.imgur.com/Sbp9oCX.png) (I do not
have a paid account so I cannot view the source), Fitbit's market share is
ridiculously large compared to jawbone, who have decreased from 19% to next to
nothing. This is both due to new players and an increasing number of fitness
trackers sold.

~~~
whoisjuan
Jawbone doesn't even exist anymore (at least not as the original hardware
company), so I don't understand what point are you trying to make.

