Apple has a well-oiled scheme to steal the developments of its own partners and legally protect its clearly illegal actions. Work according to this scheme is systematic, and the legislation in the United States has a clear “bias” towards large companies. The newspaper told The Wall Street Journal (WSJ).
Image source: apple.com
Masimo was engaged in the release of devices that measure the level of oxygen in the blood – the technology turned out to be ideal for smart watches, so Apple offered the manufacturer a cooperation. Shortly thereafter, the IT giant began poaching Masimo employees, including its engineers and chief medical officer, and in 2019, Apple published patents for sensors similar to Masimo’s sensors – their author was a former employee of this company. A year later, Apple released a smartwatch that could measure blood oxygen levels.
Similar stories of “collaboration” with Apple, according to the WSJ, have already accumulated about two dozen. There is only one scheme: negotiations on a possible partnership or integration of technologies into the products of the electronic giant, then a sudden cessation of these negotiations and the release of Apple products with similar functions. Apple says the company does not steal technology and respects the intellectual property of other companies. And what’s more: Masimo and other manufacturers are copying its products, and they will have to answer in court for all such accusations.
Apple has already tried to invalidate several hundred patents owned by companies that tried to accuse it of infringing intellectual property rights. Sometimes multiple counterclaims are filed for a single patent claim and attempts are made to invalidate patents unrelated to the original dispute, lawyers and small company executives said. Among software developers, the term “Sherlock” has already become established to describe Apple’s standard strategy. About two decades ago, Apple released Sherlock, a program designed to search files on Mac computers and search for information on the Internet. Some time later, a third-party Watson program appeared, and later an updated Sherlock came out with many of the same features. The creator of Watson was later personally contacted by Steve Jobs to justify this act.
App developer Blix said Apple stole his email anonymization method when it released its “Sign in with Apple” feature, and tracker maker Tile faced a similar strategy when AirTag was introduced in 2021. Now the US Department of Justice is trying to establish whether Apple prefers its own solutions to the detriment of products like Tile. Many patent disputes are related to the technologies used in the Apple Watch smartwatch – according to the company, these claims arise due to too broad wording in patents owned by opponents.
On the other hand, it would be unfair to blame Apple for the complete absence of its own initiatives: in fiscal 2022 (ended in September), the company’s budget for research and development amounted to $ 26 billion – 20% more than a year earlier. Under the leadership of Tim Cook, the company is actively trying to increase profits and develop more components for its products in-house. It often gobbles up smaller players, avoiding licensing deals with smaller companies, although it pays license fees too—more than 25,000 patents have been licensed in the last three years alone.
Another significant incident involves AliveCor, which in 2016 announced an Apple Watch strap designed to take electrocardiograms (ECGs). Before the release of the device on the market, the developer was invited to Apple’s headquarters in Cupertino for a 45-minute meeting. In 2017, AliveCor became the first Apple Watch accessory to receive FDA approval. In 2018, the Apple Watch Series 4 came out with support for ECG recording without an AliveCor strap – around the same time, Apple updated the watch software platform, as a result of which a third-party accessory lost the ability to work with them. An Apple spokesperson said that the company has been developing an ECG system since 2012, that is, three years before the release of the watch itself.
In 2021, AliveCor filed a complaint with the International Trade Commission (ITC), an agency dealing with unfair trade practices, alleging that Apple had infringed on three of its patents. In December, the panel ruled in favor of AliveCor, but Apple referred the dispute to the Patent Trial and Appeal Board, a bureau set up to protect companies from patent trolls. This authority invalidated AliveCor’s patents. According to the applicant, Apple also tried to cancel seven of his other patents – she replied that they were all related to the original dispute. AliveCor chairman and investor Vinod Khosla says he is now holding back companies he has invested in from any talks with Apple.
Since 2012, Apple has attempted to void more patent applications than any other applicant, according to research firm Patexia. It can cost about $500,000 to defend a patent against such a complaint, which is too expensive for a small technology company. Andrei Iancu, former head of the US Patent and Trademark Office (USPTO), believes that the US patent system has a “bias” towards large firms. And this, according to him, is not an accident, but the result of decades of policy aimed at complicating the enforcement of patents.
According to the “standard” scheme, the situation of “partnership” between Apple and Valencell developed the technology for monitoring heart rate during the user’s physical activity. In 2013, an Apple representative contacted Valencell about a possible partnership. In subsequent discussions of the technology, the company repeatedly asked the developer for information about the technology and the possibility of licensing it – negotiations ceased in 2015, shortly before the release of the Apple Watch with this feature. This was followed by an attempt to sue for infringement of four Valencell patents – Apple responded by filing complaints with a request to cancel them and seven more patents of the plaintiff, not related to the original case. In 2019, tired of litigation, Valencell agreed to settle the conflict and did not disclose the terms of the settlement agreement.
The scenario that developed Apple’s relationship with Masimo, which back in 2013 announced at the exhibition a pulse oximeter designed to work as an accessory with Apple devices, was not original either. Apple has contacted the developer, saying it wants to “detail” his solution and discuss further collaboration. A few months later, the chief physician of the company moved to Apple from Masimo – he doubled his salary and agreed to transfer several million shares of the electronic giant. Apple urged the head of Masimo not to attach importance to this incident, and the discussion of plans for further work continued. In total, the company poached 30 employees from a small player. In 2014, Marcelo Lamego, CTO of Masimo Cercacor Laboratories, a subsidiary of Masimo’s intellectual property, moved to Apple. In 2020, Masimo filed a lawsuit against Apple, in 2021 a complaint to ITC.
According to the plaintiff, Apple is still making attempts to poach Masimo employees. To date, the lawsuit with electronic giants has cost Masimo $55 million – according to the company, by the end of the conflict, the amount will increase to $100 million.
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