Having to freeze sales of the Apple Watch Ultra 2 and Apple Watch Series 9 In the middle of the Christmas campaign, this must have been a huge economic setback for Apple. In addition, he had Joe Biden, former President of the United States, against him. But why did this happen, what led to Apple being forced to stop production and being accused of patent theft by a company called Masimo? Let's try to summarize it, because it's enough for a book.
And let's start with a key fact and a date. In the summer of 2013, Apple made a curious decision: it hired Michael O'Reilly, chief medical officer of the Masimo company. The signing was revealed in 2014. What was a “doctor” specializing in medical technology doing when he moved to Cupertino? Apple was preparing to build its new device, the first Apple Watch. After several delays, the first Apple Watch would arrive in spring 2015.
This signing, as expected, was just one of many. But not just anyone. Nancy Dougherty, expert in medical sensors, and Ravi Narasimhan, researcher behind Vital Connect, They had just joined Apple's secret project. In the meantime, they acquired patents and partnered with companies like Sano Intelligence, which specialize in biometric sensors that can read chemical data from blood. This was, according to Masimo, the beginning of the end.
Who is Masimo, the company that kept Apple under control
Masimo Corporation is one of the heavyweights in non-invasive monitoring. The Masimo SET monitors “approximately 200 million patients in healthcare settings worldwide and is the primary pulse oximetry technology in 17 of the top 20 hospitals on America's Best Hospitals Honor Roll.” An institution in his country, without a doubt.
Masimo is publicly traded and employs approximately 6,000 people worldwide. A giant valued at $3 billion. In short, they have been commercializing medical technology for decades and are not afraid to take on a tech company like Apple, whom they view as mere invaders.
Furthermore, behind this company there is a story, that of its founder, the businessman of Iranian origin. Joe Kiani, who experienced the consequences of live monitoring due to health issues himself. Kiani arrived in the United States without knowing how to speak English and by the age of 22, he had already earned his bachelor's (BSEE) and master's (MSEE) degrees in electrical engineering from San Diego State University. It was there that he met Masimo's second founder, Mohammed Diab.
Masimo and Apple, a story of conflicting interests
The first time Masimo and Apple met in 2013. Apple was just one of 28 companies planning to include health sensors in their devices, the upcoming “iWatch.” But since then, something has happened that Masimo describes as poaching, the theft of trade secrets. Indeed, even if the May 2023 trial ended in a nullity, In October 2024, they will meet in California for these alleged thefts. The signing of Michael O'Reilly, as we said at the beginning, was always considered a starting move.
Apple has repeatedly denied these allegations. They have been negotiating with Masimo for a decade, trying to keep the matter out of court and be able to share the patents. But once the North American International Trade Commission came into play, Apple had little to do other than indicate that it would appeal the “unfair” decision. The reality is that, as soon as the news was announced, Apple's stock fell 1% and Masimo's stock rose 3.2%.
Masimo, on the other hand, also works in the consumer technology market. That is to say, making their own watches capable of measuring oxygen and blood saturation. A curious turning point, because to this day Masimo was limited to selling this technology to large health systems. But its stock market growth leaves no doubt. And the situation became extremely tense: Masimo responded several times and insisted that it was for the good of the market, calling those in Cupertino monopolists.
Masimo SET pulse oximetry and Project Everest
We removed an acronym, SET. Behind them is the technology of Masimo Signal Extraction (Masimo SET). This is what Masimo claims is his from Apple. There are many pulse oximeters available, but few provide measurements as precise as those of an Apple Watch, capable of measuring with medical precision the blood oxygen saturation and heart rate of any user, while running .
Masimo continued to work on this technology through CO-pulse oximetry, a technical advancement that uses certain wavelengths of light. to non-invasively measure hemoglobin levelscarboxyhemoglobin and methemoglobin, in addition to marketing EEG, respiratory rate and various Doppler monitors and anesthesia monitors.
But Apple had a plan B called Project Everest. As Mark Gurman documented for Bloomberg some time ago, the event that broke the rope was the knowledge of this project, which could be summed up as the use of this technology without paying for the use of patents . Recruit 20 Masimo team members, including the CTO, increase their salaries and bonuses even if, on the other hand, he files 12 patents, it doesn't look very good on paper. Therefore, although Masimo has spent more than $60 million on lawsuits, she understands that this is a long-distance race with many options to win.
A war where anything goes. Joe Kiani began with an impassioned statement emphasizing that “I really love our president” and that Apple is already preparing for the inevitable change. A change that, in reality, we are unaware of. Although there was talk of a possible software update, this one This would be a partial solution. This was the response from Apple's legal team to the need to remove infringing features from its watches: “it is impossible to say with certainty what steps Apple would take regarding a redesign.” In short: there is still a lot of fabric to cut.
A year ago, The Verge confirmed that the ITC had denied Apple's request to suspend the ban. The sale would remain blocked for another month and, As of December 26, neither the Apple Watch Series 9 nor the Apple Watch Ultra 2 could be imported in the United States. The decision is clear: they remain “pending appeal and/or in light of a possible government shutdown.”
Masimo wins but loses. And its CEO resigns
But suddenly, everything changes: September 2024 arrives and Apple continues its strategy and its official release rhythm. Well, it delays the launch of the Apple Watch Ultra 3 but launches the Apple Watch Series 10 with changes in the interior design, but without the slightest “trace of Masimo” inside. Mark Gurman, for his part, confirms that the technology to measure blood sugar is already in motion.
And at Masimo, the pieces are starting to fall: Michelle Brennan is named interim CEO following Joe Kiani's decision to resign. Because? Due to internal tensions, Brennan, a former Johnson & Johnson executive brought to the table by Politan Capital Management, decides so. This is, for all intents and purposes, a dismissal. And why? For squandering a total of more than $100 million from the company's coffers in a legal battle that ended in the worst possible way. American justice ended up ruling in favor of Apple. AND The compensation Masimo must pay to Apple amounts to $250. How much does an Apple Watch SE cost.
In the event of an unfavorable decision, the patent war changes sides. And while there is still a long counter-suit race ahead, which will involve the Supreme Court itself and several government organizations, the reality is that Apple is in an advantageous position. Yeah, Apple still faces ban on blood oxygen app on the Apple Watch Series 10 and Ultra 2 in the United States, but the precedent is solid.
In Applesfera | Apple Watch Series 10, analysis: refined technology, with touches of déjà vu
In Applesfera | Apple Watch Ultra 2, analysis: a small step for the Ultra, a temptation for the rest
Table of Contents
