Masimo Sues Apple for Stealing Trade Secrets for Health Monitoring Functions in Apple Watch

[MacRumors]

Masimo, a medical technology company that designs pulse oximetry devices, has filed a lawsuit against Apple accusing the Cupertino company of stealing trade secrets and improperly using Masimo inventions related to health monitoring in the Apple Watch.

According to Bloomberg, Masimo claims that Apple stole secret information by pretending to have a working relationship with Masimo, and then hiring Masimo employees. Masimo also believes the Apple Watch is infringing on 10 Masimo patents.

Masimo, and its spinoff company Cercacor, claim that Masimo's technology for non-invasive health monitoring helped Apple overcome performance issues with the Apple Watch. Apple allegedly relied on Masimo tech when developing the light-based heart rate sensor used in the Apple Watch, among other technologies.

According to Masimo, Apple first contacted the company in 2013 and asked to meet for a potential collaboration, with Apple asking to "understand more" about Masimo's products to potentially integrate Masimo technology into future Apple devices. After what Masimo considered productive meetings, Apple began hiring away important employees.

Ahead of when the Apple Watch was released, Apple hired Michael O'Reilly, who had served as the Chief Medical Officer and EVP of Medical Affairs at Masimo. He has been working on Health Special Projects at Apple, and had a hand in the development of the Apple Watch.

O'Reilly wasn't the only hire from Masimo, as Apple also took on other former Masimo employees along with employees from other health-related companies during the time the Apple Watch was being designed. Marcelo Lamego, who served as CTO of Cercacor, for example, joined Apple not long after O'Reilly.

Masimo says Apple received confidential information from its hires, and launched a targeted effort to obtain "information and expertise."

Masimo and Cercacor are aiming to block further use of their patented inventions and are asking for unspecified damages. The two companies also want to add their engineers to four patents that were granted to Lamego after leaving the Cercacor.

Article Link: Masimo Sues Apple for Stealing Trade Secrets for Health Monitoring Functions in Apple Watch

 

[Mikey44]

Many have been in the race to achieve non-invasive glucose readings for a long time. It is the holy grail of non-invasive monitoring and will be a major breakthrough in medical technology when announced. There are some companies closer to achieving this than others and I would strongly doubt Apple would start from scratch considering non-invasive monitoring companies have already begun working towards this achievement. I may be biased because I work at Masimo Corporation, however I wouldn't put it past Apple to try and license the best monitoring technology already in the market rather than start from scratch. I for one would certainly love to see Masimo technology in a wearable Apple device...I think that would be awesome!

Well... This may have occurred, just not the way that LightSpectrum expected or wanted it to.

 

[69Mustang]

Masimo suing Apple. Sonos suing Google (and Amazon if successful against Google) for similar reasons. I guess it's just part of the risk/reward of trying to collab with behemoths. They might allegedly take your stuff and leave you high and dry.

 

[swingerofbirch]

Masimo is not at all a fly by night company. They're one of the gold standards if not the gold standard for oximetry in hospital settings, along with various other parameters.

And interestingly, their consumer product, the MightySat, had been an Apple Store exclusive for a while. It's still sold in their online store, possibly the retail stores as well. I assumed they had a good relationship with Apple due to that, also the fact that they have almost non-existent Android support for the MightySat.

 

[HiVolt]

Well at least this is different, not the typical patent troll suit.

 

[macnchiefs]

This is pretty legit. This will be two big boys going at it if it goes to trial.

 

[coolfactor]

If Apple did (a) meet with the company, and then (b) hired the employees for their knowledge and skills, then I side with Masimo on this. While I love my Apple Watch, I don't want to see them trample over smaller inventive talent in the marketplace, and especially claim that they came up with the ideas entirely in-house.

 

[Doctor Q]

In this type of situation, Apple is likely to look guilty until and unless found to be innocent. When you hire a rival's staff, and they are likely to know trade secrets, whether or not you actually used (i.e., misused) those trade secrets isn't easy to determine. It's all in the details of their work and the internal communications involved. For that reason, I can't guess about the merits of the legal case.

Will Apple deny it? Settle? Prepare a defense?

 

[jpn]

its not illegal or even unethical to hire away expertise.

but, before apple engaged in substantial knowledge sharing with Masimo, apple should have decided which strategic path it would go down.

either:
1 get a reading on if Masimo could be a "like partner" (if Masimo's negotiation ethics and goals and actual usable know-how would allow them to be a potential partner)
or
2 don't appear to go the path of cooperation and immediately start to hire away its staff

either one is acceptable to me.
i don't like that it started with the first and then proceeded to the second.
its a failure on apple's part. probably originating in apple's legal department rather than their corporate governance and compliance group.

apple failed to first analyze if Masimo was a potential real partner or not and played nice with the company at first, with (apparently) a plan in place to hire away its employees.
i don't really care if its illegal or not.
but it is unethical.

 

[mannyvel]

Well, they bring up a couple of issues, but really the only thing that's important is the patent infringement; all the rest of it is sort of BS. Non-competes are invalid in California, so the "hiring away employees" is irrelevant.

And in any case does the information in the employee's head belong to the company or the employee?

 

[Apple_Robert]

Since we don’t know crucial information, we can’t really state one way or another, whether Apple is right or wrong. On the surface, it doesn’t look good.

What kind of employee NDA are being dealt with? That is one of the crucial things we need to know.

 

[cmaier]

If Apple did (a) meet with the company, and then (b) hired the employees for their knowledge and skills, then I side with Masimo on this. While I love my Apple Watch, I don't want to see them trample over smaller inventive talent in the marketplace, and especially claim that they came up with the ideas entirely in-house.

Hiring someone for their knowledge and skills is the main reason you hire someone.
Hiring someone without knowledge and skills is dumb.

 

[DeepIn2U]

Masimo is not at all a fly by night company. They're one of the gold standards if not the gold standard for oximetry in hospital settings, along with various other parameters.

And interestingly, their consumer product, the MightySat, had been an Apple Store exclusive for a while. It's still sold in their online store, possibly the retail stores as well. I assumed they had a good relationship with Apple due to that, also the fact that they have almost non-existent Android support for the MightySat.

Considering the historical macrumors article of the hiring ... this actually can show us track record for a probable cause to a legitimate civil case here.

And there goes Jeff's credibility about being a great for Apple. Curious how much this case will cost apple here.

 

[69Mustang]

Hiring someone for their knowledge and skills is the main reason you hire someone.
Hiring someone without knowledge and skills is dumb.

Just a guess, but I don't think @coolfactor is being as literal as you're interpreting it. Based on the context of his quote, pretty sure his objection is the hiring of an employee specifically to gain their knowledge of their company's IP, instead of negotiating a license for the IP.

Not saying that's what Apple did. That will probably never be acknowledged in the settlement. Just saying that's probably what he meant.

 

[Lalatoon]

Did Apple claim that this tech is their innovation? If they did then with this development it feels awkward

 

[BC2009]

Masimo is not at all a fly by night company. They're one of the gold standards if not the gold standard for oximetry in hospital settings, along with various other parameters.

And interestingly, their consumer product, the MightySat, had been an Apple Store exclusive for a while. It's still sold in their online store, possibly the retail stores as well. I assumed they had a good relationship with Apple due to that, also the fact that they have almost non-existent Android support for the MightySat.

Spot on -- in fact I have been wondering for a while if Apple would acquire Masimo considering there relatively small market cap of about $9B and their huge treasure trove of intellectual property (i.e.: patents) that have successfully held up in court against much larger companies who tried to steal their technology without paying for it. Masimo is no patent troll -- they leverage their patents in top-shelf pulse-oximetry sensors that they sell to hospitals and doctors offices worldwide. I was wondering if Apple would buy them and then put an O2 sat sensor into Apple Watch. Apple could also use Masimo's sales channels to start selling more tech to hospitals that integrates with other Apple products like iPhones and iPads -- Masimo already has those relationships in the healthcare industry.

 

[cmaier]

Did Apple claim that this tech is their innovation? If they did then with this development it feels awkward

Why does everyone read a news article citing the PR department at a company which is suing Apple and assume that everything that is said is true?

 

[Lalatoon]

Why does everyone read a news article citing the PR department at a company which is suing Apple and assume that everything that is said is true?

?? Why so defensive.. i am just asking a question

Even though it is common here but it still amazes me.

 

[code-m]

I suspect Apple will come to an out of court agreement and the relationship will become ever closer. We have all seen these types of lawsuits before and the conclusion is predictable, people are just getting excited and hype it up and after weeks if not months and in some cases years (Samsung) there is alway some mutual and financial agreement that is reached. People on MR really get way too excited over these cases and claims.

 

[tgwaste]

Apple is a trojan horse. You never ever let them in. You say "Buy it, or go away". Apple has so much money that lawsuits have become irrelevant. They can steal anything they want without any real consequence.

 

[cmaier]

?? Why so defensive.. i am just asking a question

Even though it is common here but it still amazes me.

Not defensive.

I’m pointing out that so many of the posts just assume it’s all true, and go on to comment from there.

When Apple files the Answer to the complaint, and macrumors reports on it, the same thing will happen.

Just a general lack of critical thinking and skepticism around here.

 

[FightTheFuture]

I suspect Apple will come to an out of court agreement and the relationship will become ever closer. We have all seen these types of lawsuits before and the conclusion is predictable, people are just getting excited and hype it up and after weeks if not months and in some cases years (Samsung) there is alway some mutual and financial agreement that is reached. People on MR really get way too excited over these cases and claims.

Qualcomm is a very good example of this. Instead of lengthy court battles, just come to agreement, move on and make even more money. These are cut-throat business tactics.

Your also right that these comments get too heated over ethics and picking sides. In the end businesses have one principle, to make money. And these giants dance around that grey line.

 

[jazstudio]

If Apple did (a) meet with the company, and then (b) hired the employees for their knowledge and skills, then I side with Masimo on this. While I love my Apple Watch, I don't want to see them trample over smaller inventive talent in the marketplace, and especially claim that they came up with the ideas entirely in-house.

Neither one of those things seem illegal to me. I remember that suit against Apple and Google when they had an agreement not to hire away each others employees. They lost that suit as I recall and had to get rid of that unspoken policy. I also highly doubt that their execs would give away their trade secrets in meetings with Apple. I think the only thing they could have a chance with are the patents.

 

[MrTemple]

Patents are protection for innovation, not non-compete clauses (which are unethical and in some places illegal).

 

[Lalatoon]

Not defensive.

I’m pointing out that so many of the posts just assume it’s all true, and go on to comment from there.

When Apple files the Answer to the complaint, and macrumors reports on it, the same thing will happen.

Just a general lack of critical thinking and skepticism around here.

I still see it being defensive because you commented to my question which was just a simple question and non-bias at all.

Maybe if you reacted to some of those bias comments regarding this issue then as Trump said - All is well.

I would subjectively guess that if this is about Google/Android/Microsoft/Facebook and others you will not be lecturing us about lack of critical thinking and skepticism