The last week has been very interesting with regards to some of my favorite case studies from the past few years. These developments started last week with court filings that a settlement had been reached in the patent litigation between Allure Energy, and Nest Labs over the concept of thermostats with embedded sensors. This was followed today by news that AliphCom who does business as Jawbone, has filed a patent litigation suit against FitBit, who is preparing for an IPO later this year.
Last September I shared the results of a case study I developed, and shared with workshop attendees in April of 2013 discussing my thoughts on the individual patent portfolios associated with AliphCom, and FitBit in the area of personal fitness bands. In 2013 I felt that both companies were exposed from a patent protection perspective, and they should be looking to start patent purchasing programs to address the shortcomings they had with depth of technological coverage, and a lack of early priority dates for the items they did cover.
At the end of April 2013 AliphCom addressed some of the issues with their patent portfolio by buying BodyMedia, apparently in order to get access to its reasonably deep patent portfolio based on significantly earlier priority filing dates. In my case study I identified BodyMedia as a good source for valuable patents, and while the timing of the purchase was coincidental with my report it was still fascinating the way this story developed.
Now the other shoe has dropped, and with AliphCom suing FitBit with three of the patents it acquired from BodyMedia it looks as if the first shots have been fired in the predicted personal fitness band patent war. I smiled when I first read the news, and wondered how much of a return on the $110 million dollars AliphCom spent for BodyMedia would be realized just in this lawsuit alone, not to mention how much more protection AliphCom would have against other entrants in this field because of the rights they acquired. I also thought back to my original assessment of FitBit’s patent portfolio, and how underwhelming it appeared at the time, especially when I read the following quote provided by the company for a Bloomberg article on the lawsuit:
“As the pioneer and leader in the connected health and fitness market, Fitbit has independently developed and delivered innovative product offerings to empower its customers to lead healthier, more active lives,” the company said in an e-mailed statement. “Since its inception, Fitbit has more than 200 issued patents and patent applications in this area.”
I thought the claim of 200 issued patents and patent applications was a little far fetched since back when I first looked at the beginning of 2013 FitBit only had 13 unique US application numbers amounting to a handful of granted patents, and pending applications. I figured the claim of more than 200 documents referred to a count of all the various filings around the world, and that when I looked at the actual number of unique application numbers I would find a reasonably small number of inventions.
Well, it turns out I was mistaken in this regard, using data from Thomson Innovation I was able to identify 189 unique application numbers divided between 15 Chinese patent applications, 77 pending, or abandoned US applications, 97 granted US patents, including 11 design patents, and a couple of WO applications. So while this might not be over 200 inventions, it is pretty darn close, and an incredible amount of progress since I first started looking at the beginning of 2013.
It also turns out that FitBit made an acquisition of their own when it came to the patent space surrounding personal fitness monitors. In October of 2013 it was reported that a small NJ startup called Switch2Health had achieved a partial exit from their business when they sold their patent portfolio to what was then an unidentified buyer from “the leading wearable device and activity tracking company”. Turns out this company was FitBit, and they have been using the 2006 priority date associated with the Switch2Health filings to continue to build up their patent portfolio with new applications with earlier priority dates than what they had with their own portfolio.
So, what was already an interesting story gets even more intriguing. If FitBit needed to rely on their own filings they might have some difficulty combatting the combined AliphCom/BodyMedia portfolio in the recently announced litigation. With the addition of the Switch2Health portfolio, and the subsequent filings FitBit has made in conjunction with those they likely stand a much better chance of negotiating a settlement, or at least firing their own infringement suit against AliphCom. Undoubtedly, a response from FitBit to these recent moves from AliphCom will be coming soon.
As the market for personal fitness bands has heated up two of the leading players have taken steps to make sure that the patent protection they have surrounding their products will be up to the task of protecting themselves, not only from one another, but against other players as the market continues to expand. Stay tuned to see if this new patent war escalates with additional suits filed amongst the two companies, or within the larger industry.
