Fitbit workers charged with trade secret posession

Six current and former employees of the Fitbit Inc. fitness tracker company are due to appear before a U.S. magistrate in San Jose on July 9 on charges of possessing trade secrets stolen from a competitor.

The present and former Fitbit workers previously worked for Jawbone, a San Francisco-based electronics and fitness tracking company run by AliphCom, and allegedly possessed the trade secrets after they took new jobs with San Francisco-based Fitbit in 2014 and 2015.

AliphCom went out of business last year and some of its employees regrouped in a new startup called Jawbone Health, focusing on medical devices.

The six defendants were indicted by a federal grand jury in San Jose on Friday. Their initial appearance before U.S. Magistrate Virginia DeMarchi on July 9 will be for a reading of the charges and identification of their defense lawyers.

They are each charged with between one and six counts of possession of stolen trade secrets. If they are convicted, each count carries a possible maximum sentence of 10 years in prison.

AliphCom previously named five of the six criminal defendants as defendants in a civil trade-secrets-theft lawsuit it filed against Fitbit in San Francisco Superior Court in 2015.

AliphCom and Fitbit also filed several federal patent infringement lawsuits and counterclaims against one another in federal court.

Both the Superior Court and federal lawsuits were settled in a confidential agreement in December 2017 and were dismissed by the judges presiding over the cases.

The criminal investigation took two years, according to U.S. Homeland Security Department Special Agent Ryan Spradlin.

The indictment charges Katherine Mogal, 52, of San Francisco, a former director of market and customer experience insights at Jawbone, with six counts of possessing stolen secrets after she began working at Fitbit. Mogal was offered and accepted a job at Fitbit on March 13, 2015, and resigned from Jawbone on March 17, the indictment said.

Ana Rosario, 33, of Pacifica, who worked at Jawbone as a design and user researcher, is charged with five counts.

Patricio Romano, 37, of Calabasas, a former product design engineer for Jawbone, faces four counts.

Patrick Narron, 41, of Boulder Creek, a senior audio engineer, and Rong “Audrey” Zhang, 45, of El Cerrito, a senior supply chain manager, are each charged with two counts. Jing Qi Weiden, 39, of San Jose, an engineer product manager, is accused of one count.

Rosario, Romano, Narron and Zhang accepted job offers from Fitbit in March and April 2015 and resigned from Jawbone a few days later. Weiden started working for Fitbit in 2014, according to the indictment.

The indictment says that all signed confidentiality agreements when they started working at Jawbone and all except Zhang signed certifications they had returned all Jawbone property when they left. Zhang refused to do so, according to the indictment.

The secrets allegedly stolen from Jawbone included a study of small-form speakers; several documents concerning the use of Heisenberg headphones; spreadsheets on product costs; a daily diary study of 18 participants who used both a Jawbone fitness tracker and a Fitbit wristband at the same time; and other studies of fitness tracker users.

A Fitbit spokesman was not immediately available for comment.