Transaction Secure LLC accuses wearable fitness device company Fitbit Inc. of infringing its patent for a system and method of protecting sensitive information, in a new lawsuit filed July 16.

Transaction Secure holds a patent for a “System and Method for Authenticating a Person’s Identity Using a Trusted Entity.” This represents an advancement over two-factor authentication, the predominant form of digital authentication of sensitive information today, according to the complaint.

The patented system provides “flexibility and a higher degree of certainty as to authenticating that a person is who he/she claims to be” and helps protect against identity theft,...