Innovation Magazine Exclusive: Business Lessons from the Jawbone/Fitbit Patent Wars

Topics: Business Development & Marketing Blog Posts, Government, Legal Managed Services, Litigation, Midsize Law Firms Blog Posts, Thomson Reuters

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Health-related monitoring devices have been around for decades, but the market for personal-fitness monitors designed to be worn 24 hours a day didn’t begin until 2011. That’s when Jawbone released the first version of its UP product, and Fitbit, a company that had previously made health monitors, released Ultra. Fast-forward to 2013 and the Nike+ FuelBand was also available for sale. All three products were beginning to gain traction with consumers, and it was clear that wearable personal fitness monitors were on the way to becoming a very significant business.

Meanwhile, Apple® and Samsung received jury verdicts in their patent litigation suits, and news of patent-related issues was in the headlines nearly daily. Corporate executives were getting a front-row lesson on the importance of a patent portfolio strategically aligned to the organization’s goals and structured to protect its core assets and profit centers.

In April 2013, Jawbone, which files patents under the name of AliphCom, had 80 patent applications associated with the UP product filed around the world, according to data in Thomson Innovation. After removing redundant applications, a collection of 29 unique applications was associated with this brand.

They covered methods of calculating health, sleep, activity and nutrition, as well as inventions related to coatings and power management. All of these documents were based on an initial application filed in 2010 before the product went on sale, and while there was a reasonable number of applications, Jawbone needed to be concerned about whether a relatively late filing date would allow it to protect its market share.

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The situation with Fitbit was even more dire. During the same April 2013 time period, Fitbit only had 13 unique US patent applications, despite being the market leader in the space. These didn’t cover any of the device components or technologies used to assemble it. Instead, they only covered a generic monitoring device with and without a monitor. The pending applications were associated with activity algorithms, particular stair-climbing applications, and were being challenged at the US Patent and Trademark Office.

So, at the beginning of 2013, it could be reasonably concluded that Jawbone and Fitbit, two of the early leaders in the personal fitness-monitoring market, were exposed in terms of their existing patent portfolios. Both companies were likely considering patent-buying programs, strategic acquisitions or partnerships with tech companies that owned valuable IP in the space to address the shortcomings and recency in their own coverage. The companies were destined for trouble if patent litigation akin to the lawsuits filed between Apple and Samsung was to break out.


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