Masimo CEO on Looming Apple Watch Ban: 'These Guys Have Been Caught With Their Hands in the Cookie Jar'

Masimo CEO Joe Kiani does not believe that Apple will be able to solve its patent infringement issues with software, reports Bloomberg. In an interview with Bloomberg TV, Kiani said that a software solution won't work because Masimo patents cover hardware, not software. "I don't think that could work -- it shouldn't -- because our patents are not about the software," said Kiani.

apple watch ultra 1 image
Apple is reportedly working to change the algorithms used for the blood oxygen sensor in the Apple Watch to skirt Masimo patents, with engineers aiming to adjust how oxygen saturation is determined and how the data is provided to customers. An Apple spokesperson said yesterday that Apple is planning to submit a workaround to the US Customs agency to determine whether a software change is enough to avoid an import ban.

Masimo would be open to settling its dispute with Apple to prevent the Apple Watch import ban that Apple is facing, but Apple so far has not expressed interest. "They haven't called," Kiani told Bloomberg. "It takes two to tango." Kiani did not mention the amount of money that Masimo would accept to settle, but he said the company would be willing to "work with them to improve their product."

According to Kiani, he has not spoken with Apple since 2013, which is when Apple considered purchasing Masimo or getting Masimo's help to develop the blood oxygen sensors in the Apple Watch. Masimo has accused Apple of employee poaching and patent infringement, and the U.S. International Trade Commission in October agreed that Apple has violated Masimo patents with the Apple Watch.

As a result, Apple is facing an import ban on the Apple Watch Series 9 and Apple Watch Ultra 2, with sales set to stop starting on December 21. "These guys have been caught with their hands in the cookie jar," Kiani said. Masimo wants an apology and an "honest dialogue" as part of any settlement discussion.

Apple's announcement that Apple Watch sales will stop in the U.S. on Christmas Eve is a "stunt" that is meant to pressure the Biden administration, according to Kiani. Apple did not have control over the timing of the import ban.

Apple for its part said yesterday that it "strongly disagrees" with the ITC's order and import ban decision, and that it is "pursuing a range of legal and technical options" to keep the Apple Watch available to customers.

It is possible that Apple will avoid an import ban and a pause in sales if the Biden administration vetoes the ban by December 25. It is not clear if the White House will step in, as presidential vetoes of ITC bans are rare.

While Apple will not be able to continue selling the Apple Watch in the U.S. without a veto, third-party retailers like Best Buy and Target can continue to offer it as long as supplies are available. The import ban will prevent Apple from importing components and assembled devices from countries like China.

The ITC's decision will not impact sales of the Apple Watch outside of the United States.

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Top Rated Comments

thealkimist Avatar
8 months ago
No patent trolling here at all. Pay up Apple.
Score: 54 Votes (Like | Disagree)
timborama Avatar
8 months ago

“Bad artists copy. Good artists steal.”
If you’re going to throw out colloquialisms get them right…

https://www.bbc.com/culture/article/20141112-great-artists-steal
Score: 29 Votes (Like | Disagree)
erikkfi Avatar
8 months ago
The way this has been described -- Apple pays Masimo a visit, talks about a partnership, then suddenly several key Masimo employees are working at Apple reinventing Masimo's wheel -- feels absolutely like something our Apple would do. Apple is so addicted to high margins that it's practically allergic to paying up for things it wants. Remember how they pay ARM thirty cents per chip ('https://forums.macrumors.com/threads/report-apple-pays-less-than-30-cents-in-royalties-to-arm-per-chip.2412363/')?
Score: 23 Votes (Like | Disagree)
poseidondev Avatar
8 months ago

he said the company would be willing to "work with them to improve their product."
He keeps saying this, with emphasis on "improving their product." What he means is that Masimo doesn't license patents outright. They always require you to also enter into purchasing agreements for their chips.

Kiani is being coy here; he won't grant a license unless Apple accepts his "help" with "improving the product" (i.e., buys Masimo's chips and uses them in every watch). Apple isn't interested in this because they do not need Masimo's chips; their hardware is better because it's explicitly designed for the Apple Watch and its small form factor.

Kiani acts like a patent troll who smells money and is duplicitous and disingenuous.

why can't they just pay them a royalty per hardware device and move forward?
See above; Kiani is being coy. He's not interested in selling a license; he's interested in forcing a supply agreement of some hardware collecting dust as a requirement for the license sale.

They aren't a patent troll. They have producing products covered by said patents for years, and in a lot higher quantity than Apple does with their watches.
Suppose you throw a bunch of patents against the wall to see what sticks; a judge dismisses half of your claims offhand because they're so ridiculous. Simultaneously, the Patent Trial and Appeal Board invalidates 15 of your patents because they are bogus. In that case, you are a patent troll in my book.

But we're not reading the same book.

The ITC ruling stands with imports unless the president intervenes, which he doesn't seem to be interested in.
I've been following your replies on others regarding what is and isn't a case and what does and doesn't constitute a trial, etc., and respectfully, I think you need clarification on what's going on here.

Three cases are at play here: one before a California court that started in 2020, Apple's lawsuit against Masimo being handled in Delaware, and the ITC case.


The California case wasn't going so well for Masimo. As I've explained above, the judge outright dismissed half of the claims, most of the patents involved in the case got invalidated, and in the end, all but one juror ruled in favor of Apple. Nevertheless, since a case needs to be decided unanimously, the judge declared a mistrial, and a new date is to be set.
This case is still ongoing, and its outcome has yet to be settled (not to mention the appeals that could follow).

Masimo didn't like how that case was going, so they went to the ITC, hoping to get a more favorable outcome. The ITC is an agency that's part of the executive branch and mainly decides within the context of imports. The ITC mostly mirrored the California judge in dismissing most of Masimo's claims except for two (nearly identical) patents.

But in this country, the courts have the final say; this ITC ruling is the first step in a more extended series of steps. The next step is for the President to overrule the ITC (he's the head of the executive branch, after all), and once that period ends, Apple can appeal it with the U.S. Court of Appeals for the Federal Circuit. But they can only do that after the Presidential Review Period has ended on December 26.
From there, it goes through the regular appeals process (i.e., Court of Appeals, Supreme Court).

Then there's the case in Delaware ('https://fingfx.thomsonreuters.com/gfx/legaldocs/movakmnjlva/IP%20APPLE%20MASIMO%20PATENTS%20complaint.pdf'). During the case in California, and two years after Masimo had gained confidential documents from Apple on the Apple Watch's design and production as part of the discovery process, Masimo launched their own watch, the W1. Apple is alleging that Masimo has used these confidential documents to rush out what they consider an Apple Watch clone, and in doing so, again, as Apple alleges, Masimo has violated several of Apple's patents.

Apple's theory of the case is that Masimo used confidential documents to make the clone and is using patent lawsuits to get the Apple Watch off the market to have a better chance at capturing the market.

The Delaware case is in full swing ('https://www.courtlistener.com/docket/65593299/apple-inc-v-masimo-corporation/'), and the outcome is still up in the air.

[HR][/HR]
All in all, Masimo is looking less and less like an innocent victim here, and this whole matter is nowhere near a done deal.
Score: 19 Votes (Like | Disagree)
zach-coleman Avatar
8 months ago

I think we are in for a long ride with this drama.
Beeper and Masimo have discovered a powerful strategy for news cycle relevance.
Score: 17 Votes (Like | Disagree)
maxoakland Avatar
8 months ago
Good to see the law applying to giant companies like Apple
Score: 17 Votes (Like | Disagree)