The Masimo Corporation, who acquired Sound United last year, have to date spent $88M fighting serial patent thieves Apple.
This week a jury heard that Masimo is claiming $4.4 billion in a US case that is revealing the inner secrets of the way Apple operates and the health problems the Apple watch faced prior to cutting a deal with former Masimo employees, who have been accused of stealing Masimo patented technology.
In the U.S. District Court, Central District of California, Apple and Masimo are going head to head in a drama that unfolded after Joe Kiani, the founder of Masimo that manufactures blood-oxygen measurement devices, met with Apple.
Soon after the meeting,Kiani discovered that Apple had moved to hire senior R&D employees from his company.
Apple offered to double their salaries, Mr. Kiani said in evidence this week.
Shortly afterwards, Apple launched a new Apple Watch that could measure blood oxygen levels in the same way that the Masimo watch could.
Mr Kiani is one of more than two dozen executives, inventors, investors and lawyers who described similar encounters with Apple.
First, they said, came discussions about potential partnerships or integration of their technology into Apple products. Then, they said, talks stopped and Apple launched its own similar features.
The Wall Street Journal claims that When Apple Comes Calling, ‘It’s the Kiss of Death’ for some Companies.
Shortly after the former Masimo engineers were hired in 2019, Apple published patents under the name of a former Masimo engineer for sensors similar to Masimo’s, documents show.
The following year, Apple launched a watch that could measure blood oxygen levels.
During discovery, Masimo was able to obtain Apple emails where executive expressed exasperation with the sensor that Apple engineering had developed on its own.
It was seen as rubbish and unworkable.
Apple executive Bob Mansfield wrote in one email, “On current path, the sensor will fail.”
According to evidence, these were tense times, resulting in Apple turning to Masimo in a desperate effort to fix their problems.
Masimo lawyers argued that a narrative was evolving at the Tech giant.
It only took one meeting with Masimo to convince Apple’s struggling team that here was the answer to their problems.
After the first meeting with CEO Kiani and Masimo, some of the Apple executives mused in internal emails that Apple should just acquire Masimo.
However, upper Apple executives shot that down, including Tim Cook who is expected to give evidence in the case.
Masimo is a company designed to create products for the medical industry (such as hospitals), and Apple is a consumer products company…such a company would not be a good fit, claimed Apple executives.
At the start of the trial, Honorable Judge James V. Selna sealed the trial so that trade secrets can be discussed behind closed doors. This has led to only snippets of information being available for publication.
The drama unfolded as Apple was developing its Watch model. They knew it had to feature health and wellness capabilities and that this technology would be crucial to the success of the product.
The problem was that Apple knew nothing about medical technology, according to testimony from Joe Kiani, CEO of Masimo.
Within six months of each other two senior Masimo employees joined Apple, and within just a few months, Apple had its working sensor.
The court has also heard that within the first two weeks of joining Apple, Marcelo Lemago, one of those two former Masimo executives, filed twelve patent applications.
Joe Kiani, Masimo Founder
This is seen in the industry as being an unbelievably quick innovative outburst for just two weeks of work. Masimo claims it was based on stolen patent information.
Apple executives have denied that they hired these two crucial Masimo employees – Cercacor (a Masimo-related company) Chief Technical Officer Marcelo Lemago and Masimo Chief Medical Officer Michael O’Reilly – to steal the company’s sensor technology.
Apple’s lawyers claim that this case is just a simple matter of a company hiring two qualified candidates with the right skill set for the watch project.
“Nothing more nothing less”.
They claimed these candidates “adhered to strict policies regarding intellectual property rights.”
Masimo’s lawyers disagree, claiming a very different narrative to Apple’s claims.
They hope to convince the jury that Apple literally hired these two key employees strictly for the purpose of obtaining Masimo’s superior pulse oximetry sensor technology.
Both Lamego and O’Reilly took the stand and testified that they did not use Masimo’s intellectual property in their work for Apple.
This is despite a U.S. District Court finding back in November 2022 that Marcelo Lamego had in fact “misappropriated”, Masio claim stolen Masimo technologies and used them in products under the True Wearables brand after he left the company.
Ironically this is the same U.S. District Court and the same judge, the Honorable James V. Selna, that ruled in Masimo’s favour in the first court case between Masimo and Apple.
Apple has already lost and won several patent court cases.
In 2021, AliveCor filed a patent-infringement complaint before the International Trade Commission, a federal agency that investigates unfair trade practices, alleging Apple violated three of its patents. In December, the commission ruled in favor of AliveCor, barring imports into the US of all Apple Watches with the heart-sensing capabilities.
Separately, Apple took the dispute to the Patent Trial and Appeal Board system, which was set up to invalidate bad patents and help companies defend themselves against so-called patent trolls, litigants who file broad patents on numerous technologies without producing any real products. That board invalidated the AliveCor patents under dispute, thereby nullifying the import ban. AliveCor has appealed that ruling.
Apple also has sought to invalidate seven other AliveCor patents, AliveCor said.
App developer Blix is currently claiming Apple stole its technique for anonymizing email addresses during online service sign-ups when the company launched its “Sign in with Apple” feature in 2019.
Tile Inc., the maker of object-tracking devices that once integrated seamlessly with the iPhone, has faced off against Apple after the company launched a similar product called the AirTag in 2021.
Currently, the Justice Department is investigating whether Apple favors its own products over those of third-party developers such as Tile, according to people familiar with the matter.
