WiseWear Chapter 11 bankruptcy blamed on Apple's decision to deactivate Apple Watch diagno...

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in Apple Watch
WiseWear, a San Antonio wearable device startup, blames Apple for causing it to file for bankruptcy on Wednesday, claiming the decision to deactivate the Apple Watch diagnostic port caused patents it held to reduce in value, in turn causing it to fail to raise $2 million in funding.




WiseWear produced wearable devices that could track a user's activities and provide distress messaging alerts, but designed them to be more like jewelry. Items from the firm were sold by retailers including Macy's and Nordstrom, with bracelets made with premium materials including gold, rose-gold, and palladium.

The Chapter 11 bankruptcy filing was caused by the company's failure to secure $2 million in Series A financing to continue operations, reports MySanAntonio. The firm's bankruptcy lawyer, Ron Smeberg, called it "a very promising company," before asserting that the funding failure prevented it from achieving large-scale production, something Smeberg suggests could have created economies of scale and reduced the price of its products.

The reason for the funding round's failure is claimed to lie in WiseWear's acquisition of Reserve Strap Inc. last year, buying the firm's assets and liabilities in exchange for $505,000 in convertible notes. Reserve Strap had designed a "battery band" that used the diagnostic port on the Apple Watch to charge the wearable device, a design the firm quickly patented.

In April 2016, the watchOS 2.0.1 update included a change to the Apple External Accessory Protocol that disabled the Reserve Strap's functionality to pass charge through the port. At the time, Mashable reported Reserve Strap suspended orders for the $250 band, which had already missed its original shipping date for the accessory by six months.

WiseWear claims that "Apple turned off the port through an operating system change" once it was proven the band was a viable product, effectively making the product "unusable for its designed purpose."

"This Reserve Strap product couldn't be brought to market because of the fact that Apple changed" watchOS to turn off the port, Smeberg insists. By turning it off, Smeberg believes the patent lost its value, making it harder to secure funding "because there's questions about the viability of your products, at a couple of main ones."

According to Smeberg in the bankruptcy court filing, Apple's action amounts to "an illegal restraint of trade." The firm believes it can also raise "patent infringement actions against Apple related to the Apple Watch and distress messaging function."

Despite the accusations in the court filing, it is unknown if legal action will be attempted against Apple by the firm's representatives. Considering the purchase of Reserve Strap's assets would have taken place after the cancelation of orders, and that the patent would in theory have devalued before the acquisition as well, it seems unlikely an effort to sue Apple over the matter will be that profitable, if successful.
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Comments

  • Reply 1 of 29
    Rayz2016Rayz2016 Posts: 4,160member
    So let me see if I have this right. 

    They went bankrupt due to the fact that they couldn’t get investor money because they were dumb enough to buy a company mainly for its patents based around a technology that didn’t belong to them and was basically a diagnostic port that the owning company didn’t even acknowledge as existing, let alone promising would be around forever. 

    And they reckon this was Apple’s fault. 

    Dream on. 




    longpathSoundJudgmentStrangeDaysanton zuykovanomezroger73magman1979radarthekatonehunglowracerhomie3
  • Reply 2 of 29
    GG1GG1 Posts: 201member
    An undocumented port had an undocumented change in functionality. What could go wrong?
    longpathSoundJudgmentanton zuykovdws-2anomezroger73magman1979radarthekatchialarryjw
  • Reply 3 of 29
    caskeycaskey Posts: 4member
    What a pathetic attempt to get press coverage by blaming Apple. Apple stated from the beginning that the port was not to be used for anything but their own diagnostics. You can't use it in a way that is not only not supported, but publicly stated that it's not to be used and then blame them for your company sucking.
    longpathSoundJudgmentanton zuykovzroger73magman1979radarthekatLukeCagechiawatto_cobrajbdragon
  • Reply 4 of 29
    DAalsethDAalseth Posts: 267member
    Despite the accusations in the court filing, it is unknown if legal action will be attempted against Apple by the firm's representatives. 
    Oh there will be. But I doubt it will get very far.
    anton zuykovmagman1979chiawatto_cobra
  • Reply 5 of 29
    YvLyYvLy Posts: 65member
    oh ... I always love a good joke ....
    anton zuykovchiawatto_cobrabshank
  • Reply 6 of 29
    Oh, that's a bad Apple!  It only goes to show how some gambles don't pay off for companies hoping to ride on Apple's coattails.
    watto_cobrabshank
  • Reply 7 of 29
    fallenjtfallenjt Posts: 3,902member
    The death has come for the parasite, lol. You patent on unofficial feature of Apple product just like you buy lottery ticket. Too bad. Don't blame. You gambled and lost.
    StrangeDaysanton zuykovmagman1979chiawatto_cobrabshank
  • Reply 8 of 29
    Sour grapes from a parasite.

    Apple can design its products however it wants.

    It should even remove the port since that can get corroded or short the phone.

    It is better to magnetically charge the phone and keep all of the electronics sealed.
    watto_cobrabshank
  • Reply 9 of 29
    MplsPMplsP Posts: 610member
    Can’t really call them a parasite, but unless there’s a specific contract,  Apple can change its products however it sees fit. It’s not unlike a company that designed products for the 30 pin connector only to have Apple change to the lighting port. 
    watto_cobrajbdragonasdasd
  • Reply 10 of 29
    sflocalsflocal Posts: 4,239member
    This kind of whining reminds me of the time that Palm was trying to bypass Apple's control if iTunes by hijacking the USB-id and fooling OSX into thinking it was an bonafide Apple product.

    I can't believe that the founder of this company honestly didn't stop for a moment before investing all this time and money into creating an add-on to a product that belongs to another company, using a port that wasn't even approved by Apple for use in 3rd-party products!  Did he honestly think that Apple would have no problem with it?  Look how hard it is to develop products using the lightning-port!  You don't see many of those things for a reason.

    Moron.
    anomemagman1979SpamSandwichwatto_cobraravnorodom
  • Reply 11 of 29
    anomeanome Posts: 1,113member
    I remember at the time the diagnostic port was discovered, people were coming up with all sorts of great ideas as to what it could be used for. People seemed to take a great deal of offence at suggestions that Apple didn’t support it, and thus might get rid of it without warning. So, guess what?

    Not that I’m one to gloat, that would be unbecoming.
  • Reply 12 of 29
    stanhopestanhope Posts: 128member
    Even Miss Cleo, RIP, could have told them this was a stupid, Vegas odds risk.  As for suing Apple..bye Felicia LOL
    magman1979
  • Reply 13 of 29
    hexclockhexclock Posts: 416member
    MplsP said:
    Can’t really call them a parasite, but unless there’s a specific contract,  Apple can change its products however it sees fit. It’s not unlike a company that designed products for the 30 pin connector only to have Apple change to the lighting port. 
    It IS unlike the lightning port situation. The watch diagnostic port was never intended to be used for third party accessories, and was, as another poster pointed out, never acknowledged by Apple as a viable I/O port in the first place. 
    Solichiajbdragon
  • Reply 14 of 29
    SoliSoli Posts: 8,283member
    hexclock said:
    MplsP said:
    Can’t really call them a parasite, but unless there’s a specific contract,  Apple can change its products however it sees fit. It’s not unlike a company that designed products for the 30 pin connector only to have Apple change to the lighting port. 
    It IS unlike the lightning port situation. The watch diagnostic port was never intended to be used for third party accessories, and was, as another poster pointed out, never acknowledged by Apple as a viable I/O port in the first place. 
    It's a crazy analogy. It would only be viable if the pins had documentation from Apple and a program set up for 3rd-parties to use and then they changed the pins in some way with the Series 3 Watch which would cost 3rd-parties money to update their accessories, but Apple still had a program and documentation detailing how to utilize the pins.
  • Reply 15 of 29
    How do you get a patent for charging a rechargeable device via a connection that supported the operation (albeit undocumented). USPTO fail!
    randominternetperson
  • Reply 16 of 29
    GeorgeBMacGeorgeBMac Posts: 2,859member
    For me, this raises a bigger question: 
    Why is this port there and what is it used for (or, will it be used for)?

    It's called a diagnostic port, but as this this example shows, it can be used for more than just diagnostics.   And, its questionable that it is even being used for diagnostics since Apple Stores cannot access it.  (Repair centers might be able to -- I don't know that).

    But, in any case, an i/o port can enable not just an external battery but external sensors to be added to the watch.   That could add an enormous amount of functionality to the watch.  But, even just an external battery could be a great enhancement to the watch because, one of the major complaints is that marathoners can't use it because the battery can't last through a marathon.

    So why is Apple being so secretive about this port (even giving the port a misleading name) and not exploiting this feature (or allowing others to exploit it)?  I suspect that we will find out during some September keynote when Apple uses it to add some wonderful new functions to the watch.
  • Reply 17 of 29
    larryjwlarryjw Posts: 252member
    Unfortunate business decision. It’s called risk, and they didn’t evaluate the risk accurately. 

    No pejorative comments are appropriate about this company or Apple. Wisewear made a bet, too large a bet, and lost. 

    Apple undoubtedly had something in mind when these ports were developed. It remains to be seen what they have in mind and even whether the ports will continue to exist. 

    Smart money is waiting for Apple to issue documents detailing support for the hardware, then designing the hell out of it. 
    GeorgeBMac
  • Reply 18 of 29
    hexclockhexclock Posts: 416member
    Soli said:
    hexclock said:
    MplsP said:
    Can’t really call them a parasite, but unless there’s a specific contract,  Apple can change its products however it sees fit. It’s not unlike a company that designed products for the 30 pin connector only to have Apple change to the lighting port. 
    It IS unlike the lightning port situation. The watch diagnostic port was never intended to be used for third party accessories, and was, as another poster pointed out, never acknowledged by Apple as a viable I/O port in the first place. 
    It's a crazy analogy. It would only be viable if the pins had documentation from Apple and a program set up for 3rd-parties to use and then they changed the pins in some way with the Series 3 Watch which would cost 3rd-parties money to update their accessories, but Apple still had a program and documentation detailing how to utilize the pins.
    Thank you for shedding some light on that. 
    I found an article on ZNET from 2015 discussing the Reserve Band, and warning of the potential consequences of developing products utilizing the port. 

    http://www.zdnet.com/article/apple-watch-leave-that-diagnostic-port-alone/
    Soli
  • Reply 19 of 29
    mac_128mac_128 Posts: 3,171member
    MplsP said:
    Can’t really call them a parasite, but unless there’s a specific contract,  Apple can change its products however it sees fit. It’s not unlike a company that designed products for the 30 pin connector only to have Apple change to the lighting port. 
    Yes, Apple can remove a port from a future product or change it. The distinction here, is they changed the product after the customer bought it. Imagine the outcry if Apple turned off the headphone jack on all existing Lightning-equipped phones after they removed the headphone jack from the iPhone 7? Granted the headphone jack was an advertised feature, and the "diagnostic port" wasn't. Nevertheless, the idea is the same -- Apple changed the hardware after you bought it, advertised or not.

    That to me is the important part of this story. I couldn't care less if a startup business model was trashed after Apple removed a port on a future product; but altering a product after the customer owns it, really redefines "ownership" for modern times, and speaks more to customers rights than Apple's here.
    muthuk_vanalingam
  • Reply 20 of 29
    lkrupplkrupp Posts: 6,381member
    And I read they are planning on suing Apple claiming restraint of trade. Shades of Psystar and their Mac monopoly claim. 
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