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6 Fitbit Employees Charged With Stealing Trade Secrets From Jawbone (mercurynews.com) 80

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. From a report: 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, once valued at $3.2B, 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.
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6 Fitbit Employees Charged With Stealing Trade Secrets From Jawbone

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  • by rsilvergun ( 571051 ) on Friday June 15, 2018 @11:21AM (#56789770)
    it seems like it should be a contract dispute, not a federal crime. Then again it does hurt rich people...
    • Not sure why this is illegal. it seems like it should be a contract dispute, not a federal crime.

      I would expect it is because trade secrets are a form of federally recognized and protected intellectual property, as are copyrights and patents.

      • I would expect it is because trade secrets are a form of federally recognized and protected intellectual property, as are copyrights and patents.

        The Justice Dept does not enforce copyrights or patents. If someone violates your patent, that is your problem, not the government's. You can sue, but you can't go to the police.

        • The Justice Dept does not enforce copyrights or patents. If someone violates your patent, that is your problem, not the government's. You can sue, but you can't go to the police.

          True, but the legal issues are still beyond a mere contract dispute due to the federal statutes regarding IP. The original question was about a "federal crime vs contract dispute".

        • The Justice Dept does not enforce copyrights or patents. If someone violates your patent, that is your problem, not the government's. You can sue, but you can't go to the police.

          Wild a**ed speculation: Jawbone is bankrupt, DOJ involvement is somehow due to government management of the corporation's former assets. Potential damages from this suit being a financial "asset".

        • Have you never seen the FBI Warning at the beginning of every DVD or VHS? The FBI is part of DOJ.

          There are both civil and criminal copyright statues, very much like you can sue someone for taking your money in order to try to get some of it back, and the government can prosecute theft criminally. Just this week in the news a major star was suing their manager for allegedly stealing the celebrity's money. That civil suit, to recover the money, doesn't bar criminal prosecution if in fact a crime was c

      • by Smerta ( 1855348 )

        It's a little bit tricky... copyright and patents are awarded by the federal government (talking U.S. here, obviously), but no such analogue applies for trade secrets. For example, secrets deemed “business information” are only protected under state law, if at all for that matter. One of the obvious differences between trade secrets and copyright & patents is filing/disclosure with the federal government. The whole idea of a trade secret is that you... wait for it... keep it secret. Not

        • I'm wondering if the feds are involved due to bankruptcy, ie they are now managing the company's assets, the potential lawsuit award being an "asset"?
    • If this case succeeds, it will cause serious problems, because people quit and go work for competitors all the time And when they do, they know things like business plans, financials, etc. So this will essentially mean it's impossible to go work for a competitor. Not good.
      • by raymorris ( 2726007 ) on Friday June 15, 2018 @12:10PM (#56790104) Journal

        Employees can do a couple of things to avoid a criminal (and unethical) act when they go to work for a competitor:

        Before leaving, don't artificially access or store secrets that you don't already know. Especially, don't FRAUDULENTLY gain access to secrets that aren't part of your job requirements.

        Don't tell your new company secrets from your old company. What is a secret? Basically, it's anything the old company makes an effort to keep confidential.

        If you do reveal secrets, some people at the new company might like that, and some more insightful people may recognize that means you'll still THEIR secrets to the next company, so you can't be trusted. Sometimes it might make sense to say something like "I take my job here seriously and would never reveal our secrets to a competitor. It wouldn't be right for me to break confidentiality of my former employer, just like I'd never violate your trust."

        For myself, I like to learn new things, expanding my knowledge and experience with each job. For that reason, I'm unlikely to ever go work for a direct competitor. Instead, I'll move from working on the security of Rackspace's network to a new job working on making sure the F-35 doesn't get hacked. I'll expand my knowledge, and since it's not a direct competitor, trade secrets from my old job won't be much of an issue.

        • Comment removed based on user account deletion
      • If this case succeeds, it will cause serious problems, because people quit and go work for competitors all the time And when they do, they know things like business plans, financials, etc. So this will essentially mean it's impossible to go work for a competitor. Not good.

        Working for a competitor is not a problem, you still have an advantage. General public knowledge, improved general skills, etc will still make you a better job candidate. There is no cause for hysteria, this has been worked out in the legal system for decades now. Just do not mention information that the company hides from public view. Anything learned from public sources is OK to use, but cite those public sources to cover your ass. You being a better programmer for a lower power embedded environment is fi

      • by bdh ( 96224 )
        If you look at the indictment, the accused supposedly took physical materials from Jawbone to Fitbit, including copies of market studies, supplier and pricing lists, design specifications for new products, and internal financial presentations. If I go to my employer's direct competitor, the development skills that I learned under my employer are portable, and he/she has no claim on them. Taking design specifications of a product under development out of the building, however, is not a skill transfer. It's
    • It's an end-run around the fact that non-compete agreements are basically illegal in California. The employers can't win in a lawsuit, but (apparently) they can use Federal thugs to threaten ex-employees with prison time. This country is truly becoming a fucked up place...
    • by raymorris ( 2726007 ) on Friday June 15, 2018 @11:57AM (#56790022) Journal

      This is the relevant criminal law, on the federal side:
      https://www.law.cornell.edu/us... [cornell.edu]

      The definition of Trade Secret is:

      https://www.law.cornell.edu/de... [cornell.edu]

      • Hint: 'Accidently' posting any 'trade secrets' to the net before quitting renders them 'not secret', but watch the audit trails. Do it from the PHBs desk.

      • I just don't understand why we protect them with criminal liability. I guess the argument could be made they're property and it's theft. But you're not depriving someone of something physical. We do prosecute copyright though, but just because we do doesn't mean we should. Any more than we should prosecute smoking Pot.
        • > We do prosecute copyright though, but just because we do doesn't mean we should.

          I find it interesting you said "prosecute", rather than saying it shouldn't be a crime. I would say that we should prosecute large-scale criminal activity, especially criminal enterprises - crime for money. If you think it should be perfectly illegal to run a company ripping off other people's work, say that. It doesn't make sense to say "it's a crime, well not really, it's never prosecuted".

          > Any more than we should pr

    • by Anonymous Coward

      Its illegal because the right person knows the right person or paid off the right person to get this case made. If the same thing happened to someone who wasn't friends with the right person, they'd be laughed out of the office.

      • Duh, the only thing cops do for most people is fill out a form so you can make a claim with your insurance. They are USELESS.

    • Comment removed based on user account deletion
  • "Stealing"? (Score:5, Funny)

    by mi ( 197448 ) <slashdot-2017q4@virtual-estates.net> on Friday June 15, 2018 @11:30AM (#56789844) Homepage Journal

    If I could have a dollar for every time an "insightful" post on Slashdot — since the times of Napster [slashdot.org] — lectured the audience, that it is not theft, if the victim still has his copy of whatever is allegedly "stolen"...

    • by dcw3 ( 649211 )

      And, they'd still all be legally wrong in the US
      https://www.upcounsel.com/inte... [upcounsel.com]
      https://www.legalmatch.com/law... [legalmatch.com]
      from wikipedia: the Economic Espionage Act of 1996 (18 U.S.C. 1831–1839), which makes the theft or misappropriation of a trade secret a federal crime.

    • If I could have a dollar for every time an "insightful" post on Slashdot — since the times of Napster — lectured the audience, that it is not theft, if the victim still has his copy of whatever is allegedly "stolen"...

      This happens to be roughly the same distinction as the one between murder and attempted murder.

      An industrious 12-year-old with a nickel-a-week allowance can easily "steal" $500,000 in a year, as the aggrieved prefer to frame it. And then they try to collect on the counterfactual $

      • by epine ( 68316 )

        s/degenerates to/degenerates into/

        Also, by counterfactual in nature, I mean that estimating out-of-pocket damages requires manufacturing a hypothesis about how someone might have behaved differently, leading to a different remunerative outcome, had the "theft" not occurred.

        s/someone/world and dog/ if you've got Hollywood balls (and then collect a government tariff attached to blank media just in case).

  • by Anonymous Coward

    If Jawbone went out of business, doesn't that make all their confidentiality agreements null and void? If the agreement was with a company that no longer exists, how can anyone sue them for violating it?

    • by raymorris ( 2726007 ) on Friday June 15, 2018 @11:54AM (#56790008) Journal

      The acts in the indictment occurred in 2015.

      Can one be charged with a crime after the victim is gone?
      Every murder case ever says yes.

    • If the agreement was with a company that no longer exists, how can anyone sue them for violating it?

      This is not about "suing". This is about people being charged with CRIMES. If I murder someone, should I be able to say "It doesn't matter because, hey, they are dead"?

      Criminalizing IP disputes may be stupid, but that is what is happening here.

    • If Jawbone went out of business, doesn't that make all their confidentiality agreements null and void? If the agreement was with a company that no longer exists, how can anyone sue them for violating it?

      Somebody is most likely still trying to get some money from the IP owned by Jawbone to help pay back creditors and stock holders.

  • for fitbit? (Score:5, Funny)

    by Anonymous Coward on Friday June 15, 2018 @12:13PM (#56790126)

    imagine having to steal another company's secrets and commit crimes just to make THAT

  • Why is this even an issue much less a civil or criminal one? Neither device successfully does what it claims to, so what actual damages are being done?

  • Jawbone is out of business and amazon is still selling the jawbone units. Jawbone.com site is no longer online.

    Sad really. The jawbone app & interface was way better than fitbit's.

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