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SAN JOSE – 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.
The indictment charges the six people — Katherine Mogal, 52, of San Francisco; Rong Zhang, 45, of El Cerrito; Jing Qi Weiden, 39, of San Jose; Ana Rosario, 33, of Pacifica; Patrick Narron, 41, of Boulder Creek; and Patricio Romano, 37, of Calabasas — with violating confidentiality agreements they had signed as former employees of Jawbone after they accepted employment with Fitbit, according to an announcement from Acting U.S. Attorney Alex G. Tse and Homeland Security Investigations Special Agent in Charge Ryan L. Spradlin.
San Francisco-based companies Fitbit and Jawbone were competitors in making wearable fitness trackers until Jawbone went out of business in 2017.
Each of the defendants worked for Jawbone for at least one year between May 2011 and April 2015, and had signed a confidentiality agreement with the company, according to the Department of Justice.
Some of the defendants received offers of employment from Fitbit while they still worked at Jawbone and quickly left Jawbone to work there, while one of them accepted employment from Fitbit months after resigning from Jawbone.
“We believe the Justice Department’s indictment today of six current and former Fitbit Inc. employees for stealing trade secrets from their former employer, Jawbone, validates the claims we made in our lawsuit against Fitbit,” said Hosain Rahman, CEO of Jawbone Health, a spinoff of the former Jawbone company, in a statement emailed to this news organization from a spokesperson. “On behalf of former employees, investors, suppliers and others associated with Jawbone, we look forward to seeing justice take its course in this case.’’
Jawbone filed a lawsuit against Fitbit and the group of employees who quit Jawbone to work for Fitbit in 2015, alleging that the employees stole trade secrets, business plans, market research, and other information. A spokesperson from Jawbone Health said Blackrock, which invested in Jawbone, settled the lawsuit with Fitbit late last year.
“In a trade secret misappropriation case brought by Jawbone in the International Trade Commission in 2016 that involved these same individuals, a federal administrative law judge during a nine-day trial on the merits found that no Jawbone trade secrets were misappropriated or used in any Fitbit product, feature or technology,” a spokesman for Fitbit said in an emailed statement.
“Intellectual property is the heart of innovation and economic development in Silicon Valley,” Tse said in the news release. “The theft of trade secrets violates federal law, stifles innovation, and injures the rightful owners of that intellectual property.”
If convicted, the defendants face a maximum sentence of up to 10 years imprisonment and $250,000 fine per count, followed by a maximum three years supervised release, according to the news release.
“While we live in a free market economy, HSI is committed to ensuring employees are playing fair and within the limits of the law,” said Spradlin, who is the Special Agent in Charge for northern California and northern Nevada. “HSI has devoted more than two years to investigating these allegations of the theft of trade secrets. HSI considers these types of charges extremely serious, and is dedicated to safeguarding against any illegal corporate practices adversely impacting other businesses.”
