Six current and former employees of Fitbit Inc. FIT, +0.15% were indicted by federal prosecutors Thursday for allegedly possessing trade secrets of now-defunct fitness-tracker rival Jawbone. The six, who all moved to Fitbit after working at Jawbone, are accused of violating confidentiality agreements and knowingly possessing trade secrets; they could face sentences of up to 10 years in prison. "Intellectual property is the heart of innovation and economic development in Silicon Valley," Acting U.S. Attorney Alex G. Tse said in a statement. "The theft of trade secrets violates federal law, stifles innovation, and injures the rightful owners of that intellectual property." The two San Francisco-based companies had been involved in litigation, which was settled last year, in which Jawbone accused Fitbit of stealing its employees and trade secrets. In an email, a Fitbit spokesperson said a federal administrative law judge ruled in 2016 in a case involving the same people that "no Jawbone trade secrets were misappropriated or used in any Fitbit product, feature or technology." Jawbone, which was valued at more than $3 billion in 2014, was liquidated last year. Fitbit shares are up about 30% this year.